{"id":55425,"date":"2026-09-22T10:16:39","date_gmt":"2026-09-22T17:16:39","guid":{"rendered":"https:\/\/www.movoto.com\/blog\/?p=55425"},"modified":"2026-09-22T10:16:39","modified_gmt":"2026-09-22T17:16:39","slug":"real-estate-agent-commission","status":"publish","type":"post","link":"https:\/\/www.movoto.com\/blog\/real-estate-agent-commission\/","title":{"rendered":"Real Estate Agent Commission: Who Pays and How Much"},"content":{"rendered":"<p>Real estate agents and brokers are typically paid when a home sale closes, but there is no standard commission rate that buyers or sellers are required to pay.<\/p>\n<p>Compensation is negotiable. Depending on the transaction, a seller may pay their listing broker, a buyer may be responsible for their own agent&#8217;s compensation, or the seller or listing broker may agree to cover some or all of the buyer-agent compensation.<\/p>\n<p>Those arrangements became more visible after major real estate practice changes took effect in 2024. Offers of buyer-agent compensation can no longer be communicated through participating multiple listing services, or MLSs, and many buyers now sign written agreements spelling out their agent&#8217;s services and compensation before touring homes.<\/p>\n<h2 class=\"h\">Key Takeaways<\/h2>\n<ol>\n<li>Real estate agent commissions are negotiable and are not set by law.<\/li>\n<li>Sellers typically negotiate compensation with their listing brokerage, while buyers may separately negotiate compensation with their own agent.<\/li>\n<li>A seller or listing broker can still agree to compensate a buyer&#8217;s agent, but offers of compensation are no longer displayed in participating MLSs.<\/li>\n<li>Many buyers now sign a written buyer agreement before touring homes that specifies how their agent will be compensated.<\/li>\n<li>Who ultimately pays a buyer-agent fee can be part of the purchase negotiation and may also interact with mortgage financing rules.<\/li>\n<\/ol>\n<h2>What Is a Real Estate Agent Commission?<\/h2>\n<p>A real estate agent commission is compensation paid to a real estate brokerage for services provided during a purchase or sale.<\/p>\n<p>The individual agent generally works through a licensed brokerage, so the legal agreement and payment are typically between the consumer and the brokerage rather than simply a direct payment to the individual salesperson.<\/p>\n<p>Compensation can be structured as:<\/p>\n<ul>\n<li>A percentage of the home&#8217;s sale price<\/li>\n<li>A flat fee<\/li>\n<li>An hourly amount<\/li>\n<li>Another clearly defined compensation arrangement permitted under applicable law<\/li>\n<\/ul>\n<p>There is no government-set or industry-mandated percentage that every seller or buyer must pay.<\/p>\n<p>The National Association of REALTORS\u00ae states that broker compensation is not set by law and is fully negotiable. Its current <a href=\"https:\/\/www.nar.realtor\/about-nar\/governing-documents\/code-of-ethics\/2026-code-of-ethics-standards-of-practice\">2026 Code of Ethics<\/a> also requires REALTORS\u00ae entering listing and buyer agreements to advise clients that compensation is negotiable.<\/p>\n<h2>How Much Is Real Estate Agent Commission?<\/h2>\n<p>There is no single answer.<\/p>\n<p>You may hear percentages quoted as though there is a standard real estate commission, but sellers and buyers should not assume they are required to agree to a particular rate.<\/p>\n<p>The amount can depend on factors such as:<\/p>\n<ul>\n<li>Services provided<\/li>\n<li>Local market practices<\/li>\n<li>Home price<\/li>\n<li>Property type<\/li>\n<li>Brokerage business model<\/li>\n<li>Whether compensation is percentage-based or a flat fee<\/li>\n<li>Negotiations between the consumer and brokerage<\/li>\n<\/ul>\n<p>For example, a seller could negotiate one fee with the listing brokerage for marketing and selling the property. A buyer can separately negotiate the compensation owed to the brokerage representing them.<\/p>\n<p>Those are distinct agreements, even when money from the seller or listing brokerage ultimately helps pay the buyer&#8217;s representative.<\/p>\n<h2>Who Pays the Real Estate Agent Commission?<\/h2>\n<p>It depends on the agreements involved in the transaction.<\/p>\n<p>There are generally two sides to consider:<\/p>\n<ul>\n<li>The listing broker representing the seller<\/li>\n<li>The buyer broker representing the buyer<\/li>\n<\/ul>\n<h3>How the Listing Agent Gets Paid<\/h3>\n<p>A seller who hires an agent generally signs a listing agreement specifying the brokerage&#8217;s compensation.<\/p>\n<p>If the compensation is based on the sales price, it is usually paid from the seller&#8217;s proceeds when the transaction closes.<\/p>\n<p>For example, if a seller agrees to a percentage-based listing fee, the final dollar amount will generally depend on the home&#8217;s closing price.<\/p>\n<p>The seller should understand exactly which services are included and whether the listing agreement authorizes any separate compensation arrangement involving a buyer&#8217;s representative.<\/p>\n<h3>How the Buyer&#8217;s Agent Gets Paid<\/h3>\n<p>Buyer-agent compensation is now more explicitly addressed between buyers and the real estate professionals representing them.<\/p>\n<p>Under National Association of REALTORS\u00ae practice changes that took effect Aug. 17, 2024, MLS participants working with buyers must generally have a written agreement with the buyer before touring a home, including an in-person or live virtual tour.<\/p>\n<p>The agreement must clearly establish the agent&#8217;s compensation rather than leaving it open-ended.<\/p>\n<p>According to NAR&#8217;s <a href=\"https:\/\/www.nar.realtor\/the-facts\/consumer-guide-to-written-buyer-agreements\">consumer guidance on written buyer agreements<\/a>, compensation can be expressed as a specific percentage, flat fee, hourly amount or other objectively ascertainable amount and remains negotiable between the consumer and real estate professional.<\/p>\n<h2>Does the Buyer Always Pay Their Agent Out of Pocket?<\/h2>\n<p>No.<\/p>\n<p>A written buyer agreement can establish what the buyer&#8217;s brokerage is entitled to receive, but that does not necessarily mean the buyer personally writes a check for the entire amount at closing.<\/p>\n<p>Depending on the transaction, buyer-agent compensation might be paid by:<\/p>\n<ul>\n<li>The buyer<\/li>\n<li>The seller<\/li>\n<li>The listing brokerage<\/li>\n<li>A combination of sources permitted by the applicable agreements and financing rules<\/li>\n<\/ul>\n<p>A buyer might also negotiate for the seller to cover an agreed amount as part of the purchase contract.<\/p>\n<p>If another party pays part or all of the amount owed under the buyer agreement, that payment can reduce what the buyer personally owes, subject to the terms of the agreement.<\/p>\n<h2>What Changed With Real Estate Commissions in 2024?<\/h2>\n<p>Several real estate practice changes took effect Aug. 17, 2024 following the National Association of REALTORS\u00ae settlement.<\/p>\n<p>The changes did not establish new commission rates or require buyers to pay their agents entirely out of pocket.<\/p>\n<p>Instead, two changes are especially relevant to consumers.<\/p>\n<h3>Buyer-Agent Compensation Is No Longer Offered Through the MLS<\/h3>\n<p>Participating MLSs can no longer contain fields where listing brokers or sellers communicate an offer of compensation to buyer brokers.<\/p>\n<p>That does not prohibit seller-paid or listing-broker-paid buyer-agent compensation.<\/p>\n<p>NAR&#8217;s <a href=\"https:\/\/www.nar.realtor\/about-nar\/policies\/summary-of-2024-mls-changes\">summary of the MLS changes<\/a> makes clear that offers of compensation can still be negotiated outside the MLS.<\/p>\n<p>Those arrangements can be communicated through other lawful channels and incorporated into the transaction where the parties agree.<\/p>\n<h3>Written Buyer Agreements Became More Important<\/h3>\n<p>MLS participants working with buyers must generally enter into a written buyer agreement before touring a home.<\/p>\n<p>The agreement describes the services the real estate professional will provide and how the brokerage expects to be compensated.<\/p>\n<p>That gives buyers an opportunity to discuss fees before they are deep into a home purchase rather than first encountering the compensation question at closing.<\/p>\n<h2>Can a Seller Still Pay the Buyer&#8217;s Agent?<\/h2>\n<p>Yes.<\/p>\n<p>The 2024 practice changes did not prohibit sellers from paying buyer-agent compensation.<\/p>\n<p>NAR states that sellers can still choose to offer compensation to a buyer&#8217;s representative. The primary restriction is that an offer of broker compensation cannot be communicated through a participating MLS.<\/p>\n<p>A seller might agree to buyer-agent compensation because it is part of the negotiated purchase terms or part of the seller&#8217;s broader marketing strategy.<\/p>\n<p>Whether that makes sense depends on the individual transaction.<\/p>\n<h2>Can a Seller Offer Buyer Concessions Instead?<\/h2>\n<p>Seller concessions are related but not identical to broker compensation.<\/p>\n<p>A seller concession generally means the seller agrees to pay certain buyer expenses as part of the transaction, such as eligible closing costs.<\/p>\n<p>Participating MLSs can still display information about seller concessions, subject to their rules, but the concession cannot be used as an MLS-based workaround for publishing an offer of broker compensation.<\/p>\n<p>Buyers and sellers can negotiate concessions when <a href=\"\/blog\/how-to-make-an-offer-on-a-house\/\">making an offer on a house<\/a>, just as they can negotiate price and other transaction terms.<\/p>\n<h2>Does Buyer-Agent Commission Count Toward Seller-Concession Limits?<\/h2>\n<p>Mortgage rules add another layer.<\/p>\n<p>For conventional loans sold to Fannie Mae, typical real estate agent fees paid by a seller according to local common and customary practice are not treated as interested party contributions subject to Fannie Mae&#8217;s ordinary financing-concession limits.<\/p>\n<p>Fannie Mae clarified this treatment following the 2024 commission changes. Its <a href=\"https:\/\/singlefamily.fanniemae.com\/news-events\/selling-notice-real-estate-commissions-and-interested-party-contributions\">real estate commission guidance<\/a> states that when seller-paid buyer-agent compensation remains common and customary in the local market, it does not need to be counted toward those limits.<\/p>\n<p>FHA has provided similar guidance. HUD stated that reasonable seller-paid buyer-broker commissions that are customary under state or local practice are not treated as interested party contributions under existing FHA policy when other requirements are met.<\/p>\n<p>The details can matter, particularly as local compensation practices evolve, so buyers using mortgage financing should discuss the proposed transaction structure with their lender.<\/p>\n<h2>Can Real Estate Commission Be Rolled Into a Mortgage?<\/h2>\n<p>Not in the same straightforward way that a buyer finances the purchase price of the property.<\/p>\n<p>A mortgage is based on the home&#8217;s eligible value and the loan program&#8217;s loan-to-value requirements. A buyer generally cannot simply increase the mortgage balance by the amount of an agent fee without regard to those limits.<\/p>\n<p>Instead, a buyer-agent compensation obligation might be handled through:<\/p>\n<ul>\n<li>Buyer funds<\/li>\n<li>Negotiated seller-paid compensation<\/li>\n<li>Listing-broker compensation<\/li>\n<li>Permitted seller concessions or other transaction structures<\/li>\n<\/ul>\n<p>Exactly how those options interact with the mortgage depends on the loan program and transaction.<\/p>\n<p>Buyers should include agent compensation in their broader estimate of <a href=\"https:\/\/www.lower.com\/mortgages\/calculators\/cash-to-close\">cash needed to close<\/a> if they may be responsible for paying some or all of the fee themselves.<\/p>\n<h2>How Does a Buyer Agreement Affect Commission?<\/h2>\n<p>A buyer representation agreement should tell you what services the brokerage will provide and what compensation it expects.<\/p>\n<p>Before signing, look for:<\/p>\n<ul>\n<li>The amount or method of compensation<\/li>\n<li>Length of the agreement<\/li>\n<li>Whether it is exclusive<\/li>\n<li>Geographic or property-type limitations<\/li>\n<li>Services provided<\/li>\n<li>How outside compensation affects what the buyer owes<\/li>\n<li>How the agreement can be terminated<\/li>\n<\/ul>\n<p>You can negotiate the terms before signing.<\/p>\n<p>That includes compensation.<\/p>\n<p>Do not assume that the first agreement presented is the only structure available.<\/p>\n<h2>Do You Have to Sign a Buyer Agreement to Tour a House?<\/h2>\n<p>Many buyers now will.<\/p>\n<p>Under the NAR settlement practice changes, an MLS participant working with a buyer generally must enter into a written agreement before the buyer tours a property with that professional.<\/p>\n<p>This applies to both in-person and live virtual tours.<\/p>\n<p>Open houses can be different. A consumer who independently attends an open house hosted on behalf of the seller is not necessarily establishing a buyer-representation relationship simply by walking through the property.<\/p>\n<p>State law and brokerage practices can impose additional requirements, so buyers should ask what agreement applies before scheduling private showings.<\/p>\n<h2>Is Real Estate Commission Part of Closing Costs?<\/h2>\n<p>Real estate compensation is normally accounted for as part of the financial settlement at closing, but it is useful to distinguish agent compensation from the other expenses commonly called closing costs.<\/p>\n<p>Closing costs can include items such as:<\/p>\n<ul>\n<li>Lender fees<\/li>\n<li>Title charges<\/li>\n<li>Recording fees<\/li>\n<li>Prepaid taxes and insurance<\/li>\n<li>Escrow funding<\/li>\n<li>Appraisal costs<\/li>\n<\/ul>\n<p>Broker compensation is a separate transaction expense even though it can appear on the same closing documents.<\/p>\n<p>The final Closing Disclosure or settlement documentation should show applicable amounts being paid in connection with the transaction.<\/p>\n<h2>How Is Commission Calculated?<\/h2>\n<p>If compensation is percentage-based, the calculation is straightforward:<\/p>\n<p><strong>Sale price \u00d7 agreed commission percentage = commission<\/strong><\/p>\n<p>For example, if a brokerage and client agreed to a hypothetical 2% fee on a $400,000 transaction:<\/p>\n<p><strong>$400,000 \u00d7 0.02 = $8,000<\/strong><\/p>\n<p>That example is mathematical only. It is not a recommended or standard commission rate.<\/p>\n<p>A flat-fee agreement would instead specify a dollar amount regardless of the final sale price, while other agreements can use another clearly defined compensation method.<\/p>\n<h2>Do Listing and Buyer Agents Split One Commission?<\/h2>\n<p>Not necessarily.<\/p>\n<p>The traditional shorthand of one seller-paid commission being automatically divided between the listing and buyer brokers no longer accurately describes every transaction.<\/p>\n<p>The seller and listing brokerage have their own compensation agreement.<\/p>\n<p>The buyer and buyer brokerage can have another.<\/p>\n<p>A listing brokerage or seller may agree to pay some compensation to the buyer&#8217;s brokerage, but that is negotiable rather than an automatic fixed split.<\/p>\n<p>There can also be a separate internal split between an individual agent and the brokerage they work for. That brokerage-agent arrangement generally does not change the total amount the consumer agreed to pay.<\/p>\n<h2>Can You Negotiate Real Estate Agent Commission?<\/h2>\n<p>Yes.<\/p>\n<p>Compensation is negotiable for both sellers and buyers.<\/p>\n<p>When comparing real estate professionals, consider both price and services.<\/p>\n<p>You may want to ask:<\/p>\n<ul>\n<li>How will you be compensated?<\/li>\n<li>Is the fee percentage-based, flat or structured another way?<\/li>\n<li>Which services are included?<\/li>\n<li>Are there additional brokerage or transaction fees?<\/li>\n<li>What happens if I buy or sell without completing the agreement?<\/li>\n<li>Can another party pay some or all of the compensation?<\/li>\n<li>How long does the agreement last?<\/li>\n<\/ul>\n<p>The lowest fee does not necessarily represent the best overall arrangement, just as a higher fee does not by itself establish better service.<\/p>\n<p>Compare the actual representation, marketing, availability and transaction support being offered.<\/p>\n<h2>What Does a Listing Agent Do for Their Commission?<\/h2>\n<p>Services vary by agent and brokerage, but a listing agent may help with:<\/p>\n<ul>\n<li>Pricing strategy<\/li>\n<li>Preparing the property for market<\/li>\n<li>Listing and marketing the home<\/li>\n<li>Photography and other marketing materials<\/li>\n<li>Coordinating showings<\/li>\n<li>Communicating with potential buyers and agents<\/li>\n<li>Reviewing offers<\/li>\n<li>Negotiating transaction terms<\/li>\n<li>Managing contract deadlines<\/li>\n<li>Coordinating the transaction through closing<\/li>\n<\/ul>\n<p>Our guide to <a href=\"\/blog\/what-does-a-real-estate-agent-do\/\">what a real estate agent does<\/a> provides a broader look at an agent&#8217;s role throughout a transaction.<\/p>\n<h2>What Does a Buyer&#8217;s Agent Do for Their Commission?<\/h2>\n<p>A buyer&#8217;s agent may help a client:<\/p>\n<ul>\n<li>Search for homes<\/li>\n<li>Understand market conditions<\/li>\n<li>Schedule and attend showings<\/li>\n<li>Evaluate properties<\/li>\n<li>Research comparable sales<\/li>\n<li>Prepare an offer<\/li>\n<li>Negotiate price and terms<\/li>\n<li>Manage inspections and other contract deadlines<\/li>\n<li>Coordinate with the lender, title company and other parties<\/li>\n<li>Work through the transaction toward closing<\/li>\n<\/ul>\n<p>The exact services should be discussed before entering into a representation agreement.<\/p>\n<p>If you&#8217;re interviewing agents, these <a href=\"\/blog\/5-key-questions-to-ask-a-realtor\/\">questions to ask a real estate agent<\/a> can help you compare candidates.<\/p>\n<h2>What Should Sellers Ask About Commission?<\/h2>\n<p>Before signing a listing agreement, a seller should understand:<\/p>\n<ul>\n<li>Exactly how much the listing brokerage will be paid<\/li>\n<li>How the compensation is calculated<\/li>\n<li>What services are included<\/li>\n<li>Whether additional brokerage fees apply<\/li>\n<li>Whether the seller wants to consider paying buyer-agent compensation<\/li>\n<li>How any offer of buyer-agent compensation would be communicated outside the MLS<\/li>\n<li>Whether the agreement authorizes the listing broker to compensate another brokerage<\/li>\n<\/ul>\n<p>Those questions should be resolved before the home is listed rather than assumed based on previous transactions.<\/p>\n<h2>What Should Buyers Ask About Commission?<\/h2>\n<p>Before entering into a buyer agreement, ask:<\/p>\n<ul>\n<li>What am I agreeing to pay?<\/li>\n<li>How is the amount calculated?<\/li>\n<li>Can a seller or listing broker pay some or all of it?<\/li>\n<li>What happens if outside compensation is less than the agreed amount?<\/li>\n<li>What happens if outside compensation is greater?<\/li>\n<li>How long does the agreement last?<\/li>\n<li>Can I terminate it?<\/li>\n<li>Does it apply to every property I buy or only certain homes or areas?<\/li>\n<\/ul>\n<p>You should know your potential obligation before submitting an offer.<\/p>\n<h2>Bottom Line<\/h2>\n<p>There is no standard real estate agent commission that every buyer or seller has to pay.<\/p>\n<p>Sellers negotiate compensation with listing brokerages, buyers can negotiate compensation with their representatives, and sellers or listing brokers can still agree to pay buyer-agent compensation.<\/p>\n<p>What changed in 2024 is primarily how those arrangements are disclosed and negotiated. Offers of buyer-broker compensation are no longer communicated through participating MLSs, and many buyers now sign written agreements establishing services and compensation before touring homes.<\/p>\n<p>For both buyers and sellers, the practical approach is to discuss compensation before entering into a representation agreement, understand exactly what services are included and make sure the structure works with the rest of the transaction.<\/p>\n<h2>FAQ<\/h2>\n<h3>What is the standard real estate commission?<\/h3>\n<p>There is no standard commission required by law. Real estate broker compensation is negotiable and can be structured as a percentage, flat fee or another clearly defined amount agreed to by the consumer and brokerage.<\/p>\n<h3>Who pays the real estate agent commission?<\/h3>\n<p>It depends on the transaction. Sellers commonly pay their listing brokerage. Buyers may owe compensation to their own brokerage under a buyer agreement, while a seller or listing brokerage can also agree to pay some or all of the buyer-agent compensation.<\/p>\n<h3>Does the seller still pay the buyer&#8217;s agent?<\/h3>\n<p>A seller can still agree to pay a buyer&#8217;s agent. The 2024 practice changes did not prohibit seller-paid buyer-agent compensation, although offers of broker compensation can no longer be communicated through participating MLSs.<\/p>\n<h3>Do buyers have to pay their real estate agent?<\/h3>\n<p>A buyer agreement may make the buyer responsible for an agreed amount, but another permitted source such as the seller or listing brokerage may pay some or all of that compensation. The agreement should explain how outside compensation affects what the buyer owes.<\/p>\n<h3>Can real estate commission be negotiated?<\/h3>\n<p>Yes. Real estate broker compensation is negotiable. Buyers and sellers can discuss both the fee and the services included before signing a representation agreement.<\/p>\n<h3>Do buyers have to sign an agreement before touring a home?<\/h3>\n<p>Under NAR settlement practice changes, MLS participants working with buyers generally must enter into a written buyer agreement before an in-person or live virtual tour. State law and brokerage policies can impose additional requirements.<\/p>\n<h3>Can agent commission be included in a mortgage?<\/h3>\n<p>A buyer generally cannot simply add an agent fee to a mortgage without regard to the property&#8217;s value and loan-to-value limits. Buyer-agent compensation may instead be paid through buyer funds, a negotiated seller payment, listing-broker compensation or another arrangement permitted by the applicable mortgage program.<\/p>\n<h3>Does seller-paid buyer-agent compensation count toward conventional seller-concession limits?<\/h3>\n<p>Fannie Mae says typical seller-paid real estate agent fees that are common and customary in the local market are not subject to its normal interested-party contribution limits. Transaction-specific treatment should be confirmed with the lender.<\/p>\n<h3>Does seller-paid buyer-agent commission count toward FHA concession limits?<\/h3>\n<p>HUD has stated that reasonable seller-paid buyer-broker commissions that are customary under state or local practice are not treated as interested party contributions under existing FHA policy when other program requirements are met.<\/p>\n<h3>Can sellers advertise buyer-agent compensation in the MLS?<\/h3>\n<p>Participating MLSs cannot display offers of broker compensation under the NAR settlement practice changes. Sellers can still choose to offer buyer-agent compensation and communicate that offer through lawful channels outside the MLS.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Real estate agents and brokers are typically paid when a home sale closes, but there is no standard commission rate that buyers or sellers are required to pay. Compensation is negotiable. Depending on the transaction, a seller may pay their listing broker, a buyer may be responsible for their own agent&#8217;s compensation, or the seller or listing broker may agree to cover some or all of the buyer-agent compensation. Those arrangements became more visible after major real estate practice changes took effect in 2024. Offers of buyer-agent compensation can no longer be communicated through participating multiple listing services, or MLSs, [&hellip;]<\/p>\n","protected":false},"author":31,"featured_media":55426,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[260],"tags":[95,357,372,446,505],"class_list":["post-55425","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-buyer","tag-closing-costs","tag-home-buying","tag-home-selling","tag-real-estate-agents","tag-real-estate-commission","post--single"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Real Estate Agent Commission: Who Pays and How Much<\/title>\n<meta name=\"description\" content=\"Real Estate Agent Commission: Who Pays and How Much\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, 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