Understanding Real Estate Commissions After August 2024

Understanding Real Estate Commissions After August 2024

Why Sellers Traditionally Paid 5–6%

In the past, sellers paid a total of 5–6% in commissions, usually split 3% to the listing agent and 3% to the buyer’s agent.
That covered marketing, photos, MLS listing, advertising, showings, contracts, and negotiations. The listing agent acted as the project manager, handling everything from pricing to closing to get the best results for the seller.

What’s Changed for Buyers

As of August 2024, new NAR rules require buyers to sign a written agreement with their agent before viewing homes.
That agreement must show how the buyer’s agent will be paid.
Buyers are now responsible for arranging their agent’s compensation, rather than assuming the seller will automatically cover it. This brings transparency and clarity about what your agent charges and what services you’ll receive.

Why Many Sellers Still Pay the Buyer’s Agent

Even though it’s no longer required, most sellers still offer to cover the buyer’s agent fee (often around 3%) because it helps attract more buyers.
Most buyers already have large down payments and closing costs, so covering this cost makes the home more affordable and appealing.
Offering compensation increases showings and offers, helping the property sell faster and for more money.
Not offering it could mean fewer showings and less buyer interest.

What Buyers Should Know

If a seller doesn’t offer buyer-agent compensation, you may need to pay your agent directly or negotiate it in your offer.
Some buyers may even ask their agent not to show homes where they’d have to cover that cost themselves—so it’s important to discuss your options early.

Bottom Line

While sellers aren’t required to pay the buyer’s agent anymore, many still do because it benefits everyone:
✅ Buyers get professional representation.
✅ Sellers attract more offers.
✅ Homes sell faster and for top dollar.

Understanding how commissions work helps you plan confidently and make informed decisions when buying your next home.