There’s been a lot of talk and confusion surrounding Realtor compensation lately. Let’s clear it up in a a way that actually explains it and helps you with your decision making.
Question:
Was a seller ever required to pay a buyer’s agent a specific percentage or any amount at all?
-No. They never were.
Where we are now:
Compensation is completely decoupled.
What does that mean?
-Sellers still decide what they will (or won’t) pay
-Represented buyers still decide what they will (or won’t) pay their agent.
-Everything is negotiable
-Nothing is assumed
In addition:
What you won’t see anymore:
Buyer agent compensation is not offered upfront in the listing and cannot be.
The listing agreement now reflects compensation for the seller’s agent only.
Some good advice for sellers:
Upon listing a property, instead of focusing on “Yes, I’ll pay a buyer broker if asked,…” or
“I will not pay a buyer broker for bringing a represented buyer,” sellers should talk with their Realtor about the situation as a whole, possible outcomes, and remain open minded on a case by case basis. The listing consultation and ongoing conversations should always include:
-Pricing strategy
-Known and possible closing costs
-Transaction costs
-Most importantly, the seller’s estimated net based on each individual offer’s price and terms.
No scripts, no pressure… just real conversations about what makes sense for you.
The ONLY two ways a seller can pay buyer agent compensation
It’s really simple:
- It is requested in the contract as a transaction cost
- It is included through a compensation agreement referenced as a contract contingency
That’s it.
No blanket offers. No assumptions. It’s negotiated just like everything else such as the purchase price, the closing date, what personal property remains, who pays the transfer fees, and who pays for the termite inspection.
Some analogies that actually make sense
Consider if you need to hire an attorney to represent you for a criminal or civil matter.
You can:
-Hire full representation
-Hire limited help
-Or represent yourself
Sometimes, as part of a negotiation, you might ask the other side to cover your legal fees. But:
-They don’t have to
-You don’t have to structure it that way
-And whether it makes sense depends on the overall deal, not just that one cost
If representing yourself it’s important to note:
-You don’t know what you don’t know
-Emotion can cloud strategy
-You’re up against trained professionals
-Mistakes can be permanent
-It can cost you more in the long run
Consider if you are hiring a contractor
You can hire a full service professional, hire limited or discounted help, or do it yourself
And if you go the DIY route, you’re also signing up for things like:
-“This is harder than the YouTube video made it seem”
-Realizing halfway through you needed a permit
-Finding out what a setback or easement is after something is already built
-A project that was supposed to take a weekend is now entering week six
Or maybe you go with the cheapest contractor:
-The price looks great until the ‘that’s not included’ conversations start
-Work has to be redone
-Materials weren’t what you thought
-You end up hiring someone else to fix it
Suddenly the ‘cheaper’ option isn’t cheaper anymore. Real estate works the same way.
Sellers: Here’s the real takeaway
There is no rule that applies to every situation.
But here’s where I stand and what I genuinely believe:
Having a closed mind about buyer agent compensation can cost you.
Not because you have to pay.
But you should evaluate the entire offer, not just one line item.
Real talk:
If you get a lowball offer, contingent upon the buyer selling their home, financing, asking you for your furniture and golf cart, early occupancy, and on top of that, they are asking you to pay their agent?
That’s probably not your deal.
But…
If you receive a strong offer with solid terms, and the numbers still give you an acceptable net, then automatically rejecting it just because one line item includes buyer agent compensation?
That’s where sellers can leave money and opportunity on the table.
Focus on the overall terms and net. Always.
It’s not about one line item. It’s about what you walk away with.
It’s not about one line item. It’s about what you walk away with.
For Buyers: You have as much control as ever
You decide:
-If you want representation
-What you are willing to pay for it
-What services you expect
-Whether you want your agent to negotiate that cost in the offer
Many sellers are open to it. Some are not.
That’s where strategy comes in.
If you go without representation, know what that means
The listing agent only owes you
-Honesty
-Disclosure of known material facts
They DO NOT owe you obedience, loyalty, or full confidentiality. Things like:
-Advice on inspections, pointing out potential risks or pitfalls (you won’t get this)
-Strategy for offer, due diligence, and beyond (you won’t get this)
-Negotiation guidance (you won’t get this)
-Protection of your interests (you won’t get this)
Sellers are NOT allowed to do anything that could harm their seller client’s best interests.
Because they represent the seller.
Real risks (I’ve seen this happen)
Unrepresented buyers can end up:
-Buying a property they can’t use as intended
-Finding out their land isn’t buildable
-Paying more than they needed to
-Missing major issues such as mold, roof leaks, electrical concerns, or structural problems
It’s sad to see this happen knowing that in so many cases they could have avoided all of those things and could have secured a better outcome even after paying for or negotiating representation to be paid on their behalf.
Bottom line
This doesn’t need to be complicated.
-Sellers: Stay open minded. Look at your net, not just one line item.
The ball is still in your court (you decide if and what buyer agent compensation you pay). But just don’t let one item distract you from the final score.
-Buyers: Decide how you want to be represented and how you want to pay for it.
The ball is in your court (you decide what and how you pay). Just don’t let one decision cost you the game.
And for everyone:
There is no one-size-fits all answer.
Just smart decisions, made case by case with the full picture in front of you.
If you want to have a real, straightforward conversation about this, I’m always happy to talk.