Do You Still Need To Pay a Buyer's Agent Commission?

By Darren Ricketts

Darren Ricketts is the Team Leader of the Ricketts Group at eXp Realty, serving clients throughout Eugene, Oregon, and the surrounding areas.

If the last time you bought or sold a house was before 2024, you probably heard all about the big NAR litigation regarding buyer agent compensation. But you may have heard half the story at best. So let me fill you in on the rest.

What everybody got excited about was the headline: sellers were no longer going to have to pay buyer agent commissions. Well, the fact of the matter is, they never did. That piece was always negotiable and has always been negotiable. So what really happened in that lawsuit?

What did the lawsuit actually change? The big change was decoupling the commission between the buyer’s agent and the listing agent. That’s the effective change.

In the past, when a seller listed a property, the buyer agent commission was baked into the listing agreement upfront and advertised within the listing on the MLS. That’s how agents knew what they would be paid. That can no longer happen. The buyer agent commission cannot be advertised in a listing on the MLS. Instead, it’s now part of the negotiation when an offer is submitted.

What this means if you’re a buyer. When you engage with a real estate agent now, you’re going to sign a buyer’s representation agreement before you even go look at houses. This agreement establishes exactly how the buyer agent commission works and what you get for those services. That’s the big difference on the buyer’s side.

When it comes down to it, the compensation we offer on a house is almost always negotiated with the seller as part of the purchase agreement. It simply becomes a seller concession. So instead of the buyer agent commission being predetermined in the listing agreement, it’s now part of the offer negotiation.

And here’s what works in your favor now: you now have full visibility and transparency on that process. You and your agent can figure out what’s going to work best for you in your circumstances. Maybe you ask the seller to pay the compensation. Maybe you don’t, and instead you negotiate a lower price. You have options you didn’t have before.

Here’s a real example. Earlier this year, I had a buyer who had a large down payment, and we were in a multiple-offer situation. Rather than asking the seller to pay my commission, we went more aggressive on the offer and didn’t ask for any compensation, knowing that would set our offer apart from the others and make it more competitive. They got the house. Sometimes the smartest move is the one that gives your offer an edge, and now you have the flexibility to make that call.

What this means if you’re selling. The headlines would have you believe that great news, you no longer have to pay a buyer agent commission. And technically, that’s true. If you don’t want to pay a buyer agent commission, you don’t have to.

But I’ll tell you what. Having done over 500 transactions, I have never met a seller who is really excited to pay extra fees. The fact of the matter is, though, that if you choose not to offer a buyer agent compensation, you’re going to have fewer buyers coming through your door.

And if you do happen to get an offer that isn’t asking for compensation, it’s probably going to be a lower offer than what you’d have gotten if you had offered that compensation in the first place. From my experience, sellers who don’t offer buyer agent compensation end up netting less than they would have if they had offered it in the first place to attract as many buyers as possible to their listing.

Smart sellers are willing to do it because they know it’s going to net them the most money on their house.

Who’s really paying? At the end of the day, the buyers are technically the ones paying all these fees because they’re the only ones bringing money to the table in a transaction. Even though it feels like the seller is paying both agents’ commissions, it’s actually just the buyer. It just depends on where that line item is written.

The bottom line. Before the lawsuit, sellers were not required to offer buyer agent compensation. But now it’s a negotiable term when they receive an offer.

This can all sound confusing, but it really isn’t. I would love to sit down with you, go over this, and talk real estate in general. Give me a call or text me at (541) 852-2565, shoot me an email at darren@rickettsgroup.net, or visit blog.rickettsgroup.net. I’d love to set up a time to talk.