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The Seller Pays the Buyer Agent Commission
We have heard this repeatedly recently, and it frustrates us to the core—so much so that we decided to put fingers to keyboard and set the record straight. As is sometimes the case, we consult our LinkedIn networks for some input on tough questions like the “Seller Pays” statement that can oftentimes flow off a buyer agent’s lips. It was actually quite helpful, and as a result, we have edited this blog taking into account the replies to our post.
First, let’s set the scene for the buyer agent statement of “Seller Pays:”
Buyer: Hi Betty, the Buyer Agent, who pays your commission?
Betty the Buyer Agent: The seller will pay my commission.
Buyer: OK, great, then let’s go ahead and set your commission at 2.5% since I won’t be paying it. I don’t care that it could be less if I negotiated it because the seller is paying.
Oh boy, this one burns us up.
Where are Buyer Agent Commissions Headed?
Before we break it down, we want to get you up to speed on where buyer agent commissions are, and have been, heading. The quick read – up, up, and UP. For more detailed information, see this article dated August 12, 2025, from Business Insider. As noted in the article:
“The average U.S. buyer’s agent commission was 2.43% for homes sold in the second quarter, up from 2.38% a year earlier. That’s according to a new report from Redfin, the real estate brokerage powered by Rocket.
It was the third consecutive quarter that commissions ticked a little higher after new National Association of Realtors (NAR) commission rules went into effect in August 2024.”
We don’t want this, now do we? Buyers and sellers need to understand the “ins” and “outs” of the rule changes and how to take advantage of them to reduce commissions, not increase commissions
A Real-World Situation
Let’s say the house you are buying is worth $450,000.
The seller agrees to pay their listing agent’s commission (technically the broker
commission, but we’ll use the common term here). Let’s say the seller negotiated thatdown from 2.5% to 2%—good job, seller!
They may also agree to offer 2.5% to the Buyer Agent. Why? It may very well be that they are being steered to do so by their Listing Agent. On paper, specifically the settlement sheet, it looks like the seller is paying both sides.
Not So Fast!
That seller has likely increased the purchase price by 2.5% to cover the Buyer Agent’s fee. So that $450,000 home now lists for $461,250. Alternatively, that seller will be less willing to negotiate the home price down if they are obligated to pay 2.5% to the Buyer Agent.
As the saying goes: There’s no such thing as a free lunch.
The Real Cost to the Buyer
Here’s where it stings even more: that extra $11,500, rolled into a 30-year mortgage at 7%, will an additional $15,681 in interest over the life of the loan.
The more you negotiate the Buyer Agent fee down, the less you have to pay, whether at settlement or over the life of the loan.
That’s on top of the already hefty mortgage payments—making the “seller pays” myth not just misleading, but costly.
How the New NAR Rule Changes Affect Buyer Agent Fees
We’ve spoken a lot about Buyer Agreements. Under the new NAR rules, buyers must agree to pay their agents.
Let’s say you sign an agreement and agree to pay your agent 2.5%. The seller has agreed to pay the Buyer Agent 1.5%.
Guess who’s on the hook for the extra 1%? The buyer. Always negotiate!
Negotiate for Your Benefit
Looking at it from another angle. Do you think that the seller would prefer to pay 1.5% to the Buyer Agent, or 2.5% to the Buyer Agent?
If you had negotiated the Buyer Agent commission down to 1.5%, you get a better shot at getting the house for less money.
Avoid the Commission Trap
One last bit of advice here for the buyer.
Per the NAR rule changes, if a buyer agrees to pay the Buyer Agent 1.5%, and the seller agrees to pay the Buyer Agent 2.5%, the Buyer Agent is stuck at what the buyer negotiated with them – the 1.5%, not the 2.5%.
There have been some stories of Buyer Agents trying to amend Buyer Agreements to meet the seller offered commission amount “because the seller pays,” but please, do not fall for this. Hold firm at 1.5% and try to claw back that 1% for yourself.
Bottom Line
The buyer ultimately pays, whether it’s visible on the settlement statement
or baked into the price.
Always look beyond the surface and understand how commissions affect your final cost.
