The buyers agency fee is what an agent earns for helping a buyer purchase a home. It’s usually 2.5–3% of the sale price, with a national average of 2.75%. On a $400,000 home, a 3% fee equals $12,000.
Traditionally, sellers paid this fee. That practice came from long-standing MLS rules tied to the National Association of Realtors (NAR), which required listing agents to advertise buyers agency compensation in order to list a home on the MLS — the main marketplace for home sales.[1]
After a 2024 NAR lawsuit, sellers can no longer set or advertise buyers agent fees in MLS listings. Instead, buyers now negotiate the fee directly with their agent and sign a contract agreeing to the rate before touring homes.
Even so, many sellers still cover the buyers agent fee to attract more buyers, since many buyers can't afford to pay it out of pocket on top of a down payment. The difference is that the fee is now usually offered as a seller concession at closing rather than upfront.
To help reduce costs for buyers, some agents and real estate companies offer rebates or cash back. For example, Clever Real Estate can match you with a top local buyers agent and provide cash back in eligible states. Simply fill out a short form to connect with top-rated agents in your area.
What is a buyers agent fee?
A buyers agent fee is the compensation a buyers agent receives for helping a buyer purchase a home. The buyers agent is paid only if the buyer closes on a home, and it's paid at closing.
The fee covers services such as searching for homes that fit the buyer's criteria, showing homes, putting in offers, negotiating offers, and helping the buyer navigate the inspection and closing process.
How much is a buyers agent fee?
A buyers agent fee is typically 2.5% or 3% of the home's final sale price.
Here's what that looks like for homes at different price points:
| Home sale price | 2.5% buyers agent fee | 3% buyers agent fee |
|---|---|---|
| $250,000 | $6,250 | $7,500 |
| $500,000 | $12,500 | $15,000 |
| $750,000 | $18,750 | $22,500 |
| $1,000,000 | $25,000 | $30,000 |
The national average commission rate is 2.75%. Rates vary by location, and they can be negotiated.
Can you get a flat fee buyers agent?
Yes, some buyers agents work for a flat fee, usually a few thousand dollars, though this is much less common. If you want full representation, make sure your agent will provide full service for the flat fee. Some flat fee agents offer limited services.
Who pays the buyers agency fee?
Sellers typically pay the buyers agency fee. They don't pay it upfront. Instead, they pay it out of their proceeds from the home sale at closing. Sellers usually factor this cost into their listing price.
Why sellers have paid the buyers agency fee
For decades, it has been the standard for sellers to pay the buyers agency fee due to a rule from the National Association of Realtors (NAR).
This rule was part of NAR's Participation Agreement. It mandates that listing brokers offer compensation to buyer brokers as a condition for listing on Realtor-affiliated MLSs. Given that 88% of homes sell via the MLS, this practice was widespread.[2]
Supporters of this system argued that sellers paying the buyers agency fees motivated agents to show properties, leading to quicker, more profitable sales. When sellers offered a low (or zero) buyers agent commission, the property will likely stay on the market longer.
However, some people viewed this model as outdated and expensive for sellers. It contributed to total agent fees reaching 6% of the home's sale price, which is higher than in other countries.[3] This system also arguably created a conflict of interest since the buyers agent, paid by the seller, only owes a fiduciary duty to the buyer.[4]
How the NAR lawsuit changed buyers agent fees
In 2024, NAR settled a lawsuit that changed how buyers agent fees work. The goal was to make these fees more transparent and reduce sellers’ obligation to pay them.
As of August 2024, listing agents can no longer set the buyers agency commission or advertise it in MLS listings.
Instead, buyers agency compensation is negotiated directly between the buyer and their agent. Before showing any homes, the agent must sign a buyer agency agreement with the buyer that outlines the services provided and the agreed-upon fee.
While responsibility for the buyers agent fee is now more clearly on the buyer, the practical impact has been limited. Many sellers still cover the fee to attract buyers and avoid shrinking their buyer pool.
Shane Parker, a broker based in Michigan, explains: “Buyers 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 [sellers'] buyer pool, reducing competition and potentially lowering the final sale price.”
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 buyers 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 buyers 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 buyers 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 buyers agents. This means that when home buyers are represented by their own agents when purchasing a new construction property, the builder usually covers the agent's commission.
Is buyer agency compensation even worth it?
Since sellers typically cover the buyer agency compensation, buyers don't usually have to consider whether the cost is worth it.
If the seller doesn't cover it, whether it's “worth it” depends on the buyer’s situation, experience, budget, and comfort level navigating a real estate transaction.
For many buyers, agents offer essential value. They:
- Guide buyers through the home-buying process from start to finish
- Help identify potential issues with homes
- Provide neighborhood insights and market data
This guidance can lead to better financial outcomes, as agent-represented buyers are more likely to receive concessions (69%) than unrepresented buyers (56%).[5]
What services does the buyers agent fee cover?
A buyers 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, buyers 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, buyers 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 (e.g., the listing agent, lender, underwriters, attorneys, and title company)
- 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 the buyers agency fee
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 buyers agent can be an option if you feel confident handling the home-buying 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.
Consider dual agency
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.
