Real estate commissions have always been one of the biggest costs in a home sale—and one of the most misunderstood. For years, many consumers assumed the seller automatically paid both agents and that the commission structure was basically fixed. That is no longer the full story. Today, commissions are more transparent, more negotiable, and more likely to be discussed directly between each client and their agent.
How real estate commissions traditionally worked
Under the traditional model, the seller typically agreed to a total commission of about X% of the home’s sale price. That total amount was usually split between the listing agent, who represented the seller, and the buyer’s agent, who represented the buyer. Rates varied by property, price point, region, and brokerage.
From a seller’s perspective, that commission typically covered pricing strategy, marketing, listing syndication, showings, negotiation, contract management, and coordination through closing. From a buyer’s perspective, it often felt like their agent was “free,” because the buyer usually did not pay that agent directly out of pocket at the time of home purchase.
What changed after the 2024 NAR settlement
The biggest shift came from the 2024 National Association of Realtors settlement, which changed how buyer-agent compensation is handled. Beginning in August 2024, sellers could no longer advertise offers of compensation to buyer agents through the MLS in the way they had before, and buyers working with an agent were required to sign a written representation agreement before touring homes. That agreement typically explains the services the agent will provide and how the agent will be paid.
The practical result is not that sellers never pay buyer-agent compensation anymore. In many markets, sellers still choose to offer compensation or concessions that help cover the buyer’s agent fee. The difference is that this is now more explicitly negotiated rather than assumed. Buyers are more aware that their representation has a cost, even if that cost is ultimately covered by the seller.
Who pays buyer and seller agent commissions now?
Sellers still commonly pay their own listing agent from the sale proceeds at closing. That listing-side fee is negotiated in the listing agreement, depending on the market and level of service. Buyer-agent compensation, however, is now more clearly separated. Buyers may agree to pay their agent under a buyer representation agreement, but the seller may still choose to cover some or all of that amount through a concession or negotiated term in the offer.
In other words, there is no longer one universal answer to the question, “Who pays the buyer’s agent?” Legally and contractually, the answer depends on the agreements involved. Practically, many deals still end with the seller covering much of the total commission cost through the economics of the transaction. But consumers should not assume that outcome. Both sides should discuss compensation early, in writing, and with full clarity.
How buyers and sellers can approach commission negotiations
For sellers, the key questions are what services the listing agent will provide, how experienced that agent is in the local market, and whether the fee aligns with the likely value delivered. A lower fee may save money, but sellers should also consider marketing quality, negotiation skill, pricing accuracy, and transaction management. For buyers, the key issue is understanding exactly what the buyer’s agent will do and how compensation will be handled if the seller does not contribute.
The best approach on both sides is to ask direct questions, compare options, and get all compensation terms in writing before moving forward. Commission rates are negotiable, service models vary, and the right choice is not always the cheapest one. In many cases, a skilled agent can more than earn their fee through stronger pricing, better negotiation, and fewer mistakes during the transaction.
Bottom line
Real estate commissions are no longer something buyers and sellers can afford to treat as a background detail. Sellers still often pay much of the cost, but buyer-agent compensation is now more openly negotiated, and written agreements play a much bigger role than they once did. The takeaway is simple: ask early, compare carefully, and make sure you understand who is paying for what before you sign.