Do I Still Have to Pay My Buyer’s Agent? Here’s What You Need to Know

When purchasing a home, one of the most common questions buyers ask is, "Do I still have to pay my buyer’s agent?" Understanding the financial aspects of real estate transactions can be confusing, but knowing the facts can save you time and money.

Understanding the Role of a Buyer’s Agent

A buyer’s agent is a licensed real estate professional who represents the interests of the buyer in a real estate transaction. Their job includes finding suitable properties,showing those properties,  negotiating offers, handling paperwork, setting up any investiagtions on the property, and ensuring the transaction goes smoothly. Given the value they bring to the table, it’s natural to wonder about their compensation and who is responsible for paying it. This process can take lots of time, gas, education, investigation and coninuous searching. 

Who Pays the Buyer’s Agent?

Traditionally, the seller offers a cooperatign commission to the brokers both the listing agent and the buyer’s agent commissions. This fee is usually a percentage of the home’s sale price and is devided between the two agents. The commission structure is negotiated between the seller and the listing agent before the property is listed. Therefore, as a buyer, you typically don’t pay your agent directly. After NAR this has been "decoupled" creating more paperwork and more moving parts. 

Do Buyers Ever Pay Their Agent?

All the time, and historically yes. While the seller usually covers the buyer’s agent fee, there are exceptions. Historically the sell side has already accounted for a percentage of the sale price to include 1-3% for the buyers agent. This isnt the case anymore! In competitive markets, a buyer may offer to cover their agent’s fee to make their offer more appealing to the seller by paying it as closing cost or by asking for a credit and alloting that credit for their agents fee. Additionally, you may have to send a higher offer with better terms to get a seller to cover buyers agent fees. Ultimately the buyer is still going to shoulder the cost of their representation. 

What If I Want to Cancel My Agreement With the Agent?

You can very easily cancel an exclusivity agreement. It is a typical cancellation form but it can feel awkward "firing" or breaking up with someone after they have done a lot of work for you. Remember, if they arent performing for your best interests you need to move on. 

How to Avoid Surprises

To avoid unexpected costs, it’s essential to discuss commission details with your buyer’s agent upfront and have an exclusivity agreement in place. Understanding the terms of your agreement and what happens in various scenarios will help you make informed decisions and avoid surprises at closing. You must have a solid communication line with your lender as well so you are financially prepared to cover the costs of buying a home. 

Final Thoughts

While buyers generally don’t have to pay their agent directly out of pocket, it’s crucial to be aware of the potential exceptions. By having a clear understanding of how commissions work and discussing your options with your agent, you can navigate the home buying process with confidence.