Who pays the buyer’s agent? Commission after the 2024 rule changes
For decades a buyer could tour houses without signing anything and without asking who was paying the agent walking them through the door. The answer was on the MLS, invisible to the buyer, and built into the seller’s side of the deal. That arrangement ended on August 17, 2024, and the practical result for a first-time buyer is a document to sign before the first showing and a number to negotiate before the first offer.
What actually changed
Two practice changes came out of the National Association of Realtors settlement and apply to agents working with a multiple listing service.
- Offers of compensation are off the MLS. A listing can no longer advertise what the seller’s side will pay a buyer’s broker. Sellers may still choose to offer compensation — it just has to be communicated and negotiated outside the MLS.
- A written buyer agreement comes first. Before touring a home with you, an MLS-participant agent must have a signed agreement stating the compensation specifically and conspicuously, in an objective amount rather than an open-ended one, and the agent may not collect more than that amount. The agreement must also state that broker fees are fully negotiable.
What did not change: nobody sets commissions, there is no standard rate, and the seller is still free to pay part or all of the buyer’s agent’s fee. The negotiation simply moved into the open, where you are a party to it.
Three ways the fee reaches the closing table
Your agreement with your agent creates an obligation between you and your agent. Where the money comes from is a separate question, settled deal by deal.
| Route | How it works | What to watch |
|---|---|---|
| Listing side pays | The seller authorizes the listing broker to share compensation with your broker, arranged off-MLS | Confirm the amount in writing before you write the offer — it is no longer visible in the listing |
| Seller concession | Your offer asks the seller to credit closing costs, and the credit is applied toward your agent’s fee | Program concession caps, and whether your lender permits the credit to be used that way |
| You pay directly | You pay your broker at closing, or outside it, under the buyer agreement | It is cash out of pocket on top of the down payment and closing costs |
Most transactions still settle through the first two routes, often in combination: the listing side offers less than your agreement calls for, and the gap is closed with a concession or absorbed by the agent. That negotiation happens while you are writing the offer, which is why the number needs to be settled before you fall in love with a house.
Concession limits are the constraint people forget
Using a seller credit to cover agent compensation only works up to the amount your loan program allows a seller to contribute. Those caps depend on the loan type and the down payment, and they run roughly from 2% to 9% of the price — our guide to seller concessions limits has the grid. A credit that exceeds the cap does not simply get trimmed at closing; it can force a re-negotiation days before funding.
There is a narrower point that matters here. In April 2024, ahead of the practice changes, Fannie Mae and Freddie Mac clarified that when the seller or the listing broker pays the buyer’s agent in line with local custom, that payment is not required to count toward the interested-party contribution limits. In other words, a customary seller-paid commission is treated separately from the closing-cost credit you negotiate. Guidance of this kind can be updated, so confirm the current treatment with your loan officer rather than assuming last year’s answer still holds.
Why you cannot roll it into the mortgage
A fee you agree to pay yourself is cash to close. The loan amount is derived from the purchase price or the appraised value, whichever is lower, not from your total cost of buying, so buyer-paid compensation cannot be added to the loan the way points or an escrow deposit can be financed. The practical consequences:
- Budget it alongside the down payment and closing costs. On a $350,000 purchase, a 2.5% fee is $8,750 — a material change to your cash position, and one that can push a thin file below the reserves a lender wants to see.
- If you are relying on down payment assistance, ask the program administrator whether its funds may be applied to agent compensation. Many restrict eligible uses to down payment and closing costs.
- Raising the offer price to fund a bigger credit works only if the appraisal supports the higher price. When it does not, you are back in appraisal gap territory.
Reading the buyer agreement before you sign it
The form varies by state and brokerage, but the same handful of terms decide what you are committing to.
- Amount. A percentage, a flat fee, or an hourly arrangement — and whether it is a ceiling (“no more than X”) or a floor. A ceiling is friendlier to you, because it lets a listing-side offer reduce what you owe rather than sitting on top of it.
- Term. Days, not months, is a reasonable opening position for a first agreement. Some forms are written to cover a single property or a single tour.
- Scope. Exclusive representation across a whole metro is different from an agreement covering the houses you actually see with that agent.
- Termination. How either side ends it, and with how much notice.
- Protection or holdover period. Whether the agent is owed a fee if you buy a home they showed you, weeks after the agreement ends. This clause causes the most disputes.
- Offset language. What happens when the seller’s side pays some, all, or none of the agreed amount.
The fee is negotiable, and so is every clause above. Agents are not required to accept your terms either — this is an ordinary negotiation between two parties, which is the change the rules were designed to produce.
Where it shows up in your paperwork
Real estate commissions appear on the Closing Disclosure, on the page listing settlement charges, with the buyer’s and seller’s columns separated. Fees you pay directly show in your column and are part of your cash to close; fees paid by the listing side appear on the seller’s. Read that page against your buyer agreement three days before closing, when the disclosure is required to be in your hands — the timing rules are on our TRID page, and the wider timeline is in our guide on how long closing takes.
Two situations with their own rules
Open houses are the common exception: attending one and speaking to the hosting agent generally does not require a written agreement, because that agent represents the seller. Say so out loud, and understand that the person greeting you is not working for you.
New construction is the other. Builders frequently pay buyer representation, but many require your agent to register with the sales office at your first visit and will not pay a broker introduced later — a rule that has cost buyers their representation, and one we flag in the guide to buying new construction.
Claude Loan is an information site, not a real estate brokerage, a lender or a law firm, and nothing here is a promise about what any agent will charge or accept. Commission structures, contract forms and agency law vary by state; read the agreement in front of you and ask a licensed professional in your state about anything specific to your transaction.
Frequently asked questions
Do I have to sign a buyer agreement to see a house?
If the agent participates in an MLS and is touring the home with you, yes — a written agreement is required before the tour. You can negotiate its length and scope, including agreements that cover a single property or a short window, and open-house visits generally fall outside the requirement.
Does the seller still pay the buyer’s agent?
Often, but it is no longer automatic or advertised in the listing. Sellers may offer compensation off-MLS, and buyers may ask for a closing-cost concession instead. What matters is that the amount is confirmed in writing before your offer, since your agreement with your agent stands on its own.
Can I add the commission to my loan amount?
No. The loan is sized on the lesser of price or appraised value, so a fee you pay yourself is cash to close. It can be covered by a seller credit within your program’s concession limits, or by the listing side, but it is not financeable as an add-on.
Are commissions cheaper now?
They are more openly negotiated, which is what the rules require; whether any individual buyer pays less depends on the market, the agent and the deal. Nobody can promise a rate, and any site quoting a standard commission is describing habit rather than a rule.
What if the seller offers less than my agreement says I owe?
Then the difference is yours unless it gets resolved — by asking the seller for a concession, by your agent agreeing to accept the lower amount, or by paying the gap in cash. Writing your agreement as a maximum rather than a fixed fee is the simplest way to keep that risk small.
Sources
Related: Seller concessions limits: how much a seller can pay toward your closing costs, Closing costs explained: what is negotiable, what is not, Buying new construction: builder incentives, preferred lenders and the punch list, Appraisal gap: what happens when the home appraises below your offer. Hub: First-time buyer.