🏡 WHO REALLY PAYS YOUR AGENT’S COMMISSION — BUYER OR SELLER?

One of the most common questions in real estate today is: “Who actually pays the real estate agent’s commission?” The answer has changed and it’s important for buyers and sellers alike to understand the new rules that took effect in August 2024.

1️⃣ Traditional Model Shifted

For decades, it was standard practice for sellers to pay both the listing agent and the buyer’s agent commissions out of the sale proceeds. But that long-standing norm has now changed.

2️⃣ New Rule as of August 17, 2024

Starting August 17, 2024, new regulations require that buyers must sign a written buyer-agency agreement outlining exactly how their agent will be compensated.👉 Sellers are no longer required to automatically pay the buyer’s agent commission.

This change aims to make commission structures more transparent and ensure both parties fully understand who’s paying for what before an offer is made.

3️⃣ Seller May Still Be Asked to Pay

Even though sellers are no longer obligated to pay the buyer’s agent, a buyer’s agent can still include a clause in the offer asking the seller to cover part or all of their commission. Whether or not the seller agrees depends on market conditions and negotiation strength.

4️⃣ Credit Back If Seller Pays

If the seller does agree to pay a portion of the buyer’s agent’s commission, that amount is typically credited back to the buyer reducing what the buyer owes according to their agreement. This ensures no double payments occur and keeps the transaction fair and transparent.

5️⃣ Read Everything Carefully

Buyers now play a more active role in commission discussions.

✅ Review your buyer-agency agreement carefully it details your financial obligations to your agent.

✅ Review your purchase offer before signing it shows whether the seller will contribute toward the agent’s fee.

Remember, as the buyer, you’re the one signing these documents, so clarity and understanding are key before moving forward.

💡 Bottom Line: The real estate landscape has evolved and so has how agent commissions work. Whether you’re buying or selling, transparency and communication are essential. Before signing anything, talk with your trusted LJ Realty Team or LJ Mortgage Team professional to understand how these new rules affect your next move.

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