Do You Still Need To Pay Buyer Agent Commissions?

By Teresa Kennedy

Teresa Kennedy, a seasoned real estate professional since 2005, has built a reputation for excellence by leveraging her extensive sales and marketing expertise, honed from a dynamic career that transitioned from acting and modeling to real estate.

Do you still need to pay your agent commission when buying a home? The real estate world has been turned upside down recently. A lawsuit against the National Association of Realtors is challenging how buyer agents get paid, leaving many confused.

Here’s the short version: a court recently decided that how buyer’s agent commissions were structured was illegal and had to change.

Now, these commissions are negotiable, leading to the question: Should you still pay the buyer’s commission when selling your home? It’s a good idea, and here are three main reasons why:

1. Setting a rate upfront avoids negotiations. Since buyer commissions are now negotiable, it’s better to get ahead of things and agree to a rate before negotiating. If you wait until closing to negotiate your buyer commission rate, it could become a sticking point that slows down your sale or jeopardizes the translation altogether. You may even have to end up paying extra just to make your buyer happy. Instead, I recommend communicating upfront about what you’re willing to pay to avoid confusion and unnecessary negotiations.

2. Offering a competitive rate will help your home sell. Just like you look at similar homes in your area to determine your listing price, you should also look at similar buyer’s agent rates in your area to determine how much commission you offer. A higher rate is a sign to buyers that you’re serious about getting your home sold and will probably reduce your time on the market. However, you don’t want to make your rate too high and end up paying unnecessary fees. Work with your agent and look at similar homes in your market to find a Goldilocks rate that isn’t too high or too low.

3. Offering no commission to buyers comes with risks. You may think it makes the most sense to offer zero commission upfront and simply negotiate a low rate at closing; however, this isn’t how things will work in practice. Just because you list your home and offer a 0% rate upfront does not mean you won’t pay any buyer commissions—most buyers will simply ignore your home if they think their representation won’t be compensated. Instead, it means you’ll have to negotiate the rate at closing, which can lead to a drawn-out sale and potentially paying more than you would have otherwise.

I know this topic can be a little confusing, so don’t hesitate to call me at (281) 799-3927 or send an email to teresa@empowercompanies.com if you have any questions. Plus, I offer a flexible commission menu so that you can pay for representation no matter what your budget is. I look forward to hearing from you!