Process
Buyer agent agreements and commissions: how it works now
Quick answer
Since August 2024, agents working with a buyer through an MLS must have a written buyer agreement before touring a home, in person or virtually. It must state a specific fee or rate, say that the fee is negotiable, and bar the agent from earning more than the agreed amount. The seller may still pay some or all of it if you negotiate that in your offer.
For decades, buyers rarely thought about how their agent was paid — the seller's listing agreement usually covered it. The 2024 National Association of Realtors settlement changed the process. The money may still come from the seller, but buyers now sign an agreement up front and should understand what they're agreeing to.
What changed in August 2024
- Offers of buyer-agent compensation can no longer be posted on the MLS
- Agents working with buyers must sign a written agreement before touring a home, including live virtual tours
- The agreement must state the compensation as a specific amount or rate — not a range or open-ended
- It must say the fee is negotiable and not set by law
- The agent can't receive more than the agreed amount from any source
Some states have their own rules that require an agreement even earlier. Simply attending an open house on your own doesn't require one.
What's in a buyer agreement
- Compensation: a flat fee, a percentage of the price, or an hourly rate — or $0 for a touring-only agreement
- Term: how long it lasts (ask for 30 to 90 days rather than a year)
- Exclusivity: whether you can work with other agents
- Scope: the area or property types covered
- Cancellation terms: how either side can end it
Who pays the buyer's agent now
You agree to pay your agent the stated fee, but you can ask the seller to cover it in your offer, either directly or as a seller concession. Many sellers still agree, because it widens their pool of buyers. If the seller pays less than your agreement says, you owe the difference.
A real example
A buyer signs an agreement for 2.5% on a $400,000 purchase, or $10,000. In the offer, the buyer asks the seller to pay 2.5% toward the buyer's agent. The seller counters at 2%, or $8,000. The buyer owes the remaining $2,000 at closing — or negotiates a lower price to offset it.
How agent fees interact with your loan
Seller-paid buyer-agent fees generally aren't counted against your loan's seller-concession limits when they're a customary real estate commission, but rules vary by loan program. Buyer-paid commissions usually have to come from your own funds, not the loan. On VA loans, the VA has issued guidance allowing veterans to pay their own agent in some cases. Confirm with your lender before you sign.
How to negotiate the agreement
- Interview two or three agents and ask what each one includes
- Ask for a short term and a cancellation clause
- Consider a flat fee if you're buying at a higher price
- Ask whether the fee drops if the seller pays part of it, or if you find the home yourself
Frequently asked questions
Do I have to sign before seeing a house?
Before an agent tours a home with you, yes. You can view homes at open houses or contact a listing agent without signing a buyer agreement with your own agent.
Is the commission negotiable?
Yes. The agreement must state that fees aren't set by law and are fully negotiable.
Can I buy without an agent?
Yes. You can work directly with the listing agent or hire a real estate attorney. You'll give up independent representation in negotiations, so weigh the savings against the risk.
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