Who pays the buyer’s realtor depends on what you negotiate: since August 17, 2024, every buyer signs a written contract that locks in their agent’s fee before touring any home, and that fee can be covered by the seller through a concession, paid by you directly at closing, or split between the two. The default has flipped. The commission is now your contractual obligation, and asking the seller to pick it up is a negotiation, not an assumption.
Why This Question Changed in 2024
For decades, the seller’s listing agreement bundled a total commission that got split between both agents, and buyers rarely thought about agent pay because it was baked into the seller’s side. That system ended with the National Association of Realtors antitrust settlement, which received final court approval on November 26, 2024.1National Association of REALTORS®. US District Court for the Western District of Missouri Grants Final Approval of NAR Settlement
Two rule changes reshaped how buyer-agent pay works. Offers of compensation to a buyer’s agent can no longer appear on Multiple Listing Service platforms. And buyers must sign a written agreement with their agent spelling out exactly what the agent will be paid before the agent shows them any property.2National Association of REALTORS®. What the NAR Settlement Means for Home Buyers and Sellers Sellers can still offer to pay the buyer’s agent — they just do it off the MLS, through direct communication between agents or other channels.
Your Written Buyer Agreement Puts You on the Hook
Before you tour a home with an agent, you sign a written buyer representation agreement. This has been required for all MLS participants since August 17, 2024.3National Association of REALTORS®. Consumer Guide to Written Buyer Agreements The compensation must be stated as a specific figure or rate: a flat dollar amount, a percentage of the sale price, or an hourly rate. Open-ended terms and ranges are not allowed.4National Association of REALTORS®. Written Buyer Agreements 101
The contract makes you responsible for ensuring your agent receives the agreed-upon amount. You can request that the seller cover it, and many sellers do. If the seller declines, the obligation is yours.3National Association of REALTORS®. Consumer Guide to Written Buyer Agreements Budget for the commission from day one, even if you expect the seller to pay it, because the fallback is your wallet.
The Three Ways the Fee Actually Gets Paid
At closing, the buyer’s agent commission appears as an itemized line on the Closing Disclosure, specifically under the “Other Costs” section on page two.5Consumer Financial Protection Bureau. Guide to the Loan Estimate and Closing Disclosure Forms How the money arrives there follows one of three paths.
Seller Concession
The most common approach is to include a request for a seller concession in your purchase offer. You ask the seller to credit you a specific dollar amount or percentage at closing, and that credit is applied toward your agent’s fee. The closing agent records it as a deduction from the seller’s proceeds and a credit on your side. From the seller’s view, the net effect resembles the old system; their proceeds shrink by the amount of the concession. From your view, you don’t bring extra cash to the table. Concessions are capped by loan type, which matters when the numbers get tight.
Direct Payment by the Buyer
If the seller won’t agree to a concession, or the concession doesn’t fully cover the fee, you pay the difference at closing alongside your other costs, typically by wire transfer or certified check. One hard limit: buyer-agent commissions cannot be rolled into the mortgage loan amount. That applies across conventional, FHA, and VA loans. The money comes from your own funds.
Payment Through the Listing Broker
In some transactions, the seller’s listing broker still offers to compensate the buyer’s agent directly, just not through the MLS. The listing agreement between the seller and their broker can include a provision for this. When it happens, payment flows from the listing broker to the buyer’s agent’s firm at closing, much like the old model.6National Association of REALTORS®. Consumer Guide: Listing Agreements Your agent’s total compensation from any source still cannot exceed the amount specified in your buyer agreement.4National Association of REALTORS®. Written Buyer Agreements 101
How Much the Seller Is Actually Allowed to Pay
Lenders cap how much a seller can contribute toward a buyer’s costs, including agent commissions covered through concessions. Exceed the cap, and your loan approval can collapse.
Conventional Loans
Fannie Mae ties the cap to your loan-to-value ratio:7Fannie Mae. Interested Party Contributions (IPCs)
- Down payment under 10% (LTV above 90%): concessions capped at 3% of the sale price or appraised value, whichever is lower.
- Down payment between 10% and 24.99% (LTV 75.01%–90%): cap rises to 6%.
- Down payment of 25% or more (LTV 75% or less): cap is 9%.
- Investment properties: capped at 2% regardless of down payment.
Any concession amount that exceeds your actual closing costs gets treated as a price reduction for underwriting, which can trigger an appraisal problem. The 3% cap bites first-time buyers hardest, because a 5%-down buyer is often asking the seller to cover both traditional closing costs and the agent commission inside that same 3%.
FHA Loans
FHA caps total seller concessions at 6% of the sale price. That 6% has to cover everything the seller contributes, not just the agent commission but also prepaid items, discount points, and other closing fees. The concession cannot be applied toward your down payment.
VA Loans
VA loans have their own history here. Before the NAR settlement, VA rules generally prohibited veterans from paying their buyer’s agent directly. A temporary variance issued in June 2024 changed that, allowing veterans to pay reasonable buyer-broker fees in markets where MLS-based commission offers are no longer available.8Veterans Benefits Administration. Temporary Local Variance for Certain Buyer-Broker Charges Two restrictions matter for VA borrowers: the buyer-broker charge cannot be financed into the loan, and the lender must verify you have enough liquid assets to cover it after closing. If the seller pays your agent’s fee, the VA does not count that payment against the seller’s concession limits.
Negotiating the Number
Commission rates are fully negotiable. NAR itself says compensation “is not set by law.”6National Association of REALTORS®. Consumer Guide: Listing Agreements The national average for a buyer’s agent currently runs around 2.5% to 3% of the sale price, but nothing stops you from proposing something different.
A flat fee sometimes makes more sense than a percentage, especially on higher-priced homes. Paying an agent $7,500 for a $500,000 house (1.5%) versus 3% ($15,000) is a real difference, and the agent does roughly the same work either way. If you’ve already identified the neighborhood, narrowed your search, and just need help with the offer and negotiation, a reduced fee or flat rate reflects that lighter workload.
The concession request is also a strategic lever. Asking the seller for a 1% credit toward your agent’s fee instead of 3% makes your offer more attractive against competing bids. In a multiple-offer situation, that can decide the house. You can also split the cost: ask the seller to cover part of the commission and pay the rest yourself.
Watch for administrative or transaction fees that some brokerages tack on at closing, which can run from a few hundred dollars to nearly $2,000. These are separate from the commission and are negotiable. Ask about them before you sign the buyer agreement.
If You Pay Out of Pocket, the IRS Lets You Add It to Basis
A commission you pay yourself is not deductible as a standalone expense. The IRS does let you add it to your property’s cost basis, which reduces your taxable gain when you later sell. IRS Publication 551 lists sales commissions as a settlement cost that folds into basis.9Internal Revenue Service. Basis of Assets If you buy a home for $400,000 and pay $10,000 in commission, your adjusted basis starts at $410,000. When you sell, that higher basis means $10,000 less in taxable profit.
For most primary-residence sellers, the $250,000 single / $500,000 married capital gains exclusion already wipes out any tax liability, so the basis bump is academic. For investment properties or homes that appreciate dramatically, the adjustment produces real savings. Keep your closing documents showing the commission payment.
Verify the Numbers on Your Closing Disclosure
The Closing Disclosure, which you receive at least three business days before closing, breaks down every cost in the transaction. Buyer-agent commissions appear as a line item under “Other Costs” on page two, labeled as a real estate brokerage fee.5Consumer Financial Protection Bureau. Guide to the Loan Estimate and Closing Disclosure Forms If the seller is covering the fee through a concession, you’ll see a corresponding credit. If you’re paying it yourself, it shows up in the buyer’s column. When the cost is split, the closing agent divides the amount between the buyer’s and seller’s columns.10American Land Title Association. How To Show Fees on Closing Disclosure When Buyer and Seller Split a Closing Cost
Compare the figures against your Loan Estimate from earlier in the process. A commission higher than what your buyer agreement states is a red flag, because your agent’s total compensation from all sources cannot exceed the amount in your written agreement.4National Association of REALTORS®. Written Buyer Agreements 101 If something doesn’t match, raise it with the closing agent before you sign.