Who Pays Realtor Fees? A Complete Guide for Buyers and Sellers

Key Takeaways

• Traditionally, sellers pay realtor fees for both agents at closing.
• The 2024 NAR settlement shifted how buyer agent fees are handled.
• All realtor fees are negotiable, with no legally required fixed rate.

Picture this: you’ve accepted an offer on your home, the inspection cleared, and closing day is finally on the calendar. Then the settlement statement lands in your inbox. There it is: a commission line totaling more than $20,000. For most sellers, that number is expected. For buyers sitting across the table, the question of who owes what feels a lot murkier. Knowing who pays realtor fees before you reach that moment shapes how you negotiate, how you budget, and ultimately how much you walk away with. The rules also changed significantly in 2024, which means what your parents experienced when they sold may no longer apply to you.

What Are Realtor Fees?

Realtor fees are commissions paid to real estate agents in exchange for their work facilitating a transaction. Before you can evaluate whether a fee is fair, it helps to understand what an agent does to earn it. The scope is broader than most people expect.

These fees are typically expressed as a percentage of the home’s final sale price. Historically, the total commission ranged from 5% to 6%, with the listing agent and buyer’s agent each receiving roughly half. A seller closing on a $400,000 home at a 5.32% total commission would pay just over $21,000 at closing. According to data from late 2024, that 5.32% average has held even after major industry rule changes went into effect.

The money flows through the brokerage first. Commission is paid to the brokerage at closing, and the brokerage then passes a portion to the individual agent, often at a 50/50 split. For a fuller picture of how real estate agents earn commission and what drives those percentages, it’s worth looking at the full scope of work involved before drawing any conclusions about value.

Who Pays Realtor Fees: Buyer or Seller?

For most of real estate history, the answer was simple: the seller paid. Realtor fees for both the listing agent and the buyer’s agent came out of the seller’s proceeds at closing. The buyer’s agent got compensated by the person on the other side of the deal.

The logic was practical. If buyers had to bring extra cash to cover their agent’s fee on top of a down payment and closing costs, a significant portion of the market would have been priced out of professional representation. Building the buyer’s agent fee into the seller’s side kept agent access available to buyers regardless of their upfront cash position.

This arrangement gets formalized in the listing agreement. Before a home goes on the market, the seller signs a contract with their listing agent establishing the total commission rate. It’s worth taking the time to understand what the agent’s commission pays for at this stage, so sellers can evaluate the services before committing to a rate. The listing agent’s work spans the full arc of the sale, and the fee reflects that.

One scenario plays out differently: for-sale-by-owner transactions. When a seller lists without a listing agent, they eliminate that side of the commission entirely. They may still choose to offer the buyer’s agent a fee, but they’re only obligated to do so if they agree to it in the contract.

In all cases, commission is deducted from the seller’s net proceeds at closing; it doesn’t come out of pocket as a separate payment. Sellers who are weighing whether to negotiate the rate or skip the listing agent entirely should take a close look at what a listing agent covers before making that call. Knowing the full scope of that role makes the decision a lot clearer.

What Changed After the 2024 NAR Settlement

August 2024 marked a real inflection point in who pays realtor fees, specifically on the buyer’s side. A landmark settlement with the National Association of Realtors introduced rule changes that reshaped how buyer agent compensation is handled across the country.

The first change involves written buyer-broker agreements. Before touring any home, buyers must now sign an agreement with their agent that clearly outlines the services being provided and the exact fee to be paid. The second change restricts how that fee is advertised. Buyer’s agent compensation can no longer be offered or posted on the Multiple Listing Service. Negotiations now happen directly between agents or through specific terms written into the buyer’s offer.

Under the new model, buyers are formally responsible for compensating their own agent. That said, they can still negotiate for the seller to cover that cost as part of the purchase agreement. Many sellers still choose to offer buyer agent compensation voluntarily. Buyers who cannot bring additional cash to closing would otherwise struggle to afford representation, and sellers who factor in a buyer agent fee tend to attract a wider, better-represented pool of offers.

One additional shift affected veterans specifically. The VA temporarily lifted its long-standing restriction on buyers paying agent commissions, giving veterans more flexibility when securing representation under the new framework.

How Real Estate Commissions Work

Listing Agent Fees

The listing agent’s commission is agreed upon before the home hits the market. It covers the full scope of the seller’s representation: listing preparation, marketing, showings, offer evaluation, and coordination through closing. There’s also a legal dimension to the relationship. The listing agent carries a fiduciary duty to act exclusively in the seller’s best interest. Understanding the importance of your agent’s fiduciary responsibility helps sellers know what to expect and hold their agent accountable throughout the process.

Buyer’s Agent Fees

Since August 2024, buyer’s agent compensation is negotiated before any touring begins. The buyer and agent agree on a fee, document it in the written buyer-broker agreement, and both parties sign before the first showing. The agreement should specify the services included, the amount owed, and how long the arrangement lasts.

Buyers who want the seller to cover their agent’s fee can pursue that through the offer. A concession request written into the purchase offer is the most common path. For anyone navigating this for the first time, reading up on how to choose the right buyer’s agent before signing anything gives you the questions to ask and the red flags to avoid.

Dual Agency

Dual agency occurs when one agent represents both the buyer and the seller in the same transaction. The appeal is straightforward: with one agent handling both sides, the total commission may be reduced. The risk is equally straightforward. A single agent cannot fully advocate for both parties at once, and the conflict of interest can disadvantage whoever ends up with less leverage in a given situation. Dual agency is legal in some states and prohibited in others, so buyers and sellers should confirm what’s permitted locally before agreeing to it.

Who Pays Realtor Fees for Rentals?

Rental transactions follow a different set of rules. Who pays realtor fees for rentals depends heavily on local market norms, and there’s no national standard that governs it.

In some cities, the landlord covers the agent’s fee. In others, the tenant pays. Some markets split the cost between both parties. The commission structure is also different from home sales; rental agents typically charge the equivalent of one month’s rent or a flat fee rather than a percentage of the transaction price. In competitive urban rental markets, it has become increasingly common for tenants to shoulder the broker fee entirely, largely because demand is strong enough that landlords don’t need to absorb it.

If you’re a renter working with an agent, clarify in writing who is responsible for the fee before scheduling any showings. Getting that agreement documented upfront prevents confusion when the invoice arrives.

Can Realtor Fees Be Negotiated?

Yes. All commissions are fully negotiable, and no law sets a fixed rate. The 5% to 6% figure is a market convention, not a legal requirement.

Sellers tend to have the most leverage in slower markets, where agents are competing for listings. In a high-demand environment, agents have less incentive to reduce their fee. Either way, going in with a clear strategy matters; these negotiation tips when selling your home can help sellers know exactly what to ask for and when to push.

Agents may be open to adjusting the listing percentage or shifting to a flat-fee arrangement. The amount offered to the buyer’s agent is also on the table. Before choosing a direction, comparing what full-service and discount agents offer gives sellers a clearer sense of what they’d be gaining or giving up with each approach.

For buyers, the written buyer-broker agreement is the moment to negotiate. Nothing is locked in until both parties sign.

How Realtor Fees Affect Your Closing Costs

Realtor commissions are consistently the single largest expense on a seller’s closing disclosure. They come out of the seller’s net proceeds, so most sellers don’t feel the full weight of them until they see what they’re actually taking home.

Checking your complete breakdown of closing costs helps put the commission in context alongside title insurance, transfer taxes, and other fees. For sellers who also agreed to cover the buyer’s agent fee, the combined total can be substantial, particularly at higher price points.

Buyers face their own picture. Anyone paying their agent directly needs to budget for that expense alongside the down payment, inspections, and the various hidden costs of selling and buying a home that tend to surface late in the process. Understanding the full financial picture before making an offer keeps the closing table from becoming a source of unwelcome surprises.

Ways to Reduce or Skip Realtor Fees

Several paths exist for sellers who want to reduce commission or avoid it altogether.

Discount brokers charge a reduced listing commission, often in the 1% to 1.5% range, in exchange for a more limited scope of services. The savings can be meaningful; the gaps in support can be equally meaningful. A flat-fee MLS listing takes it a step further, letting sellers pay a one-time fee to appear on the MLS without full agent representation.

For sale by owner eliminates the listing agent commission entirely. Before going that route, it’s worth understanding the downsides of selling your own property, because pricing, negotiations, and paperwork all fall to the seller. Sellers who underestimate that workload often end up leaving money on the table. A comparison of full-service versus flat-fee agents can help clarify where the line is for your specific situation.

Cash buyers and iBuyers offer yet another option. Selling directly bypasses traditional agent fees, though the offer price frequently reflects the convenience being provided to the seller.

The consistent trade-off across all of these: lower fees generally mean fewer services, less negotiating expertise, and often a longer time on the market. There are more ways to sell your home than most people realize, and weighing them honestly before choosing saves both money and frustration down the road.

Get Matched with the Right Realtor

Understanding who pays realtor fees gives you a foundation. Finding the right agent for your specific situation is what turns that knowledge into a real outcome.

Every seller’s circumstances are different. The best match depends on your timeline, your local market, how much hands-on support you need, and what you’re willing to spend on commission. SOLD.com makes it straightforward to compare selling options and connect with vetted, local realtors at no cost and with no obligation.

Get matched with a realtor and take the first step toward finding the right fit for your goals.