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Understand how real estate agents are paid
Real estate agent compensation is negotiable and is not set by law. According to the National Association of REALTORS® (NAR), sellers and their agents agree on compensation as part of the listing agreement. The fee may be a percentage of the sale price, a flat amount, or another arrangement agreed upon by the parties.
The listing agreement should explain what services the agent will provide, how compensation is calculated, and when payment is due. Services may include pricing advice, marketing, managing showings, negotiating offers, and coordinating the transaction through closing. Before signing, sellers should understand both the cost and the services included.
Know your options for buyer-agent compensation
In addition to paying their listing agent, sellers may choose to offer compensation to an agent representing the buyer. NAR emphasizes that this is optional, not a required seller expense. A seller might pay the buyer’s agent directly or authorize the listing broker to share part of its compensation. Such arrangements require the seller’s written approval of the amount.
Under industry practice changes introduced in August 2024, offers of buyer-agent compensation can no longer be communicated through Multiple Listing Services (MLSs). However, they may still be communicated through other channels or negotiated in a purchase agreement. Buyers may also request that sellers cover their agent’s fee as part of an offer. Sellers can evaluate that request alongside the other financial terms before deciding whether to accept it.
Evaluate compensation as part of your selling strategy
When comparing compensation arrangements, consider the services provided, the home’s expected sale price, and your estimated net proceeds. For sellers in Pittsburgh and the North Hills, the appropriate approach depends on the property, market conditions, and individual priorities. The goal is to understand how each option affects the overall sale.
It’s also important to distinguish buyer-agent compensation from seller concessions, which may help cover certain buyer expenses. Both can affect your proceeds, but they involve different arrangements and requirements. Before signing a listing agreement or accepting an offer, review all proposed fees and payment obligations. A qualified Pennsylvania real estate attorney can address questions about contractual rights and responsibilities.
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