The buyer's agent fee or buyer agency compensation is part of the total real estate agent's commission and averages 2.75% nationwide, according to Clever's survey of 828 realtors. This fee varies based on location, property type, and home value, with a median-priced home of $418,000 resulting in over $11,000 in buyer's agent fees.
Traditionally, home sellers have been responsible for covering the buyer's agent fee at the close of a sale, a practice rooted in the National Association of Realtors (NAR) Participation Agreement.[1] However, the recent NAR lawsuit and settlement have brought significant changes.
“The buy side is undergoing a major shift due to the NAR settlement, requiring clearer buyer agreements and direct compensation discussions,” says Dustin Parker, a real estate broker in Delaware and Maryland. “This all points to a need for smarter models — ones that protect agent profitability while improving the consumer experience.”
Fortunately, some agents and real estate companies offer buyer rebates or cash back to help reduce upfront costs. For example, Clever Real Estate can match you with a top local buyer's agent, potentially qualifying you for cash back.
💰Simply fill out this form to match with top-rated buyers agents in your area.
Buyer's agency compensation: Why sellers have paid
For decades, it was the standard for sellers to pay the buyer's agent commission due to a rule by NAR.
This rule, part of the Participation Agreement, mandates that listing brokers offer compensation to buyer brokers as a condition for listing on Realtor-affiliated MLS platforms. Given that most (86%) of homes sell via the MLS, this practice was widespread.[2]
Supporters of this system argued that paying the buyer’s agent commission motivated agents to show properties, leading to quicker, more profitable sales. When sellers offered a low (or zero) buyer’s agent commission, the property will likely stay on the market longer.
However, sellers viewed this model as outdated and expensive. It contributed to total agent fees reaching 6% of the home's sale price, which is higher than in other countries.[3]
This former system also arguably created a conflict of interest since the buyer's agent, paid by the seller, only owes a fiduciary duty to the buyer.[4]
Do buyers ever have to pay their own agent?
Historically, buyers have rarely paid their agents out of pocket. Sellers have often covered the cost and deducted it from the home's sales price.
The buyer's agency agreement typically includes a clause ensuring the agent is compensated, even if the seller declines to pay. This clause stipulates that while the buyer may be responsible for the payment under certain circumstances, the agent should first attempt to get the fee from the seller. Usually, sellers can't refuse to pay a buyer's agent if it's been agreed upon in a contract or a separate compensation agreement.
In For Sale by Owner (FSBO) situations, sellers might not want to pay the buyer's agent a broker fee. However, experienced real estate agents are often skilled in dealing with FSBO situations and can usually find ways to ensure they receive their commission for bringing a buyer to the sale.
For new construction homes sold by builders, it's typical for builders to compensate the buyer's agents. This means when home buyers are represented by their own agents when purchasing a new construction property, the builder usually covers the agent's commission.
NAR lawsuit: Changes to realtor commission are here!
As of August 2024, buyer's agents must sign an "agency agreement" before providing services to a buyer. This agreement must specify what services the agent will provide and how much they'll get paid.
Real estate agents are no longer allowed to advertise compensation offers on the MLS. Instead, compensation must be negotiated directly.
Shane Parker, a broker based in Michigan, explains: “Buyer's agents may prioritize homes where their compensation is already negotiated or clearly offered, especially if their client can't or won’t pay out of pocket. This can shrink your buyer pool, reducing competition and potentially lowering the final sale price.”
Learn more about how the real estate commission changes will impact buyers and sellers.
🏠 NAR settlement: Consumer and agent perspectives
The recent NAR settlement has revealed a significant divide between consumers and real estate agents.
While 67% of the general public supports the upcoming commission changes, viewing them as a way to reduce costs and increase transparency, 70% of agents strongly oppose them, fearing income loss and added financial burdens on home buyers (especially first-timers).
The survey also revealed that only 36% of the public is aware of the NAR settlement and its significance for the industry.
» Read more: Realtors and Public Sharply Split Over Real Estate Commission Changes
Is buyer agency compensation even worth it?
Whether a buyer’s agent is “worth it” depends on the buyer’s situation, experience, budget, and comfort level navigating a real estate transaction.
For many, especially first-time buyers, agents offer essential value:
- They guide buyers through the process from start to finish
- Help identify potential issues with homes
- Provide neighborhood insights and market data
This guidance can lead to a better financial outcome, as agent-represented buyers were more likely to receive concessions (69%) than unrepresented buyers (56%), according to our American Home Buyer survey.
But for experienced or price-conscious buyers, the cost may outweigh the benefit. Our survey found that:
- 1 in 5 buyers who skipped an agent said the commission was too expensive
- 63% of would-be buyers said a $12,000 agent fee would make them less likely to buy[5]
- Only 24% of buyers said commission rate was a deciding factor when choosing an agent
That’s leading more buyers to question the traditional model — and more agents to rethink how they justify their value.
What work does a buyer’s agent do for a client?
A buyer’s agent assists a client in several home purchasing stages. They help search for properties through the local MLS, arrange showings, and gather important property details.
During property showings, buyer's agents:
- Highlight key features and recent improvements in homes.
- Assist in understanding the layout and spatial arrangement.
- Identify potential areas of concern.
During the offer stage, buyer's agents:
- Analyze comparable properties with a CMA report to determine fair market value.
- Suggest a potential offer price.
- Help draft offer letters.
- Lead negotiations for optimal terms.
Finally, at closing, the agents:
- Maintain open communication with key parties (listing agent, lender, underwriters, attorneys, title company, etc.)
- Oversee the contract and ensure all terms are met.
- Attend the closing meeting to address final details and sign documents.
The agent's compensation is then paid out after the closing.
How to save on buyer's agency commission
To reduce buyer's agency commission expenses, consider these strategies.
Get a commission rebate
A home buyer rebate is the simplest and most effective strategy buyers can use to get extra money in the home-buying process. After closing, your agent pays you a portion of their commission.
However, also keep in mind that this practice is prohibited in some states (a restriction some experts may view as anti-competitive and unfavorable to consumers).
An alternative is to work with a realtor who offers buyer rebates or cash back. For instance, eligible buyers matched with an agent through Clever can receive cash back on their home purchase, providing a straightforward way to save on commission costs.
Clever makes it easy to find top-rated local agents from trusted brokerages like RE/MAX and Keller Williams. Plus, you can get cash back on eligible home purchases.
Just enter your zip code, and we'll send personalized agent matches to your inbox within minutes. Compare your options, choose when you’re ready, or walk away — no strings attached.
Skip the agent
Choosing to skip hiring a buyer's agent can be an option if you feel confident handling the homebuying process independently. However, it's essential to be aware of the associated risks.
In this scenario, the seller's agent, typically an experienced negotiator, may negotiate the deal in the seller's favor, potentially resulting in less favorable terms for you as the buyer. Additionally, you'll be solely responsible for navigating the complexities of the transaction.
If you decide to pursue this route, consider hiring a real estate attorney. Their expertise can help protect your interests throughout the process, providing guidance and legal support.
» How much a real estate lawyer costs
Consider dual agency (with caution)
Opting for dual agency, where the seller's agent represents both the buyer and the seller, can potentially lead to cost savings. In this scenario, the agent stands to earn a double commission and may be more inclined to reduce their fees.
However, it's crucial to approach this option with caution. The seller's agent's primary loyalty remains with the seller, and they may not prioritize your best interests. While cost savings can be enticing, we don't recommend this option due to the potential conflict of interest. Dual agency is also currently illegal in eight states.
Become a real estate agent
If you have the time and a genuine interest in the real estate industry, obtaining a real estate license could be an option. As your own agent, you'll be entitled to receive half of the commission at closing.
However, becoming a licensed real estate agent is a significant commitment, typically taking 3-6 months of your time, effort, and financial resources. It may not be the most efficient choice if your primary goal is to save a few thousand dollars at closing.
