How does a buyer’s real estate agent get paid?

Understand that agent compensation is negotiable

A buyer’s real estate agent may be compensated through a fee agreed upon in a written buyer agreement. According to NAR, real estate broker compensation is fully negotiable and is not set by law. The agreement should clearly describe the services provided and the compensation amount or method of calculation. Since August 2024, MLS participants working with buyers generally must enter into a written buyer agreement before touring a home with them, subject to applicable rules. Buyers should review the duration, scope of services, payment terms, and cancellation provisions before signing.

Know who may cover the agent’s fee

Depending on the transaction, buyer-agent compensation may be paid by the buyer, the seller, the listing broker through an authorized arrangement, or a combination of sources. A seller may also agree to cover certain buyer expenses through negotiated contract terms. None of these arrangements should be assumed without checking the agreement. NAR’s rules require specified, objectively ascertainable compensation and prohibit a participating buyer broker from receiving more compensation from any source than the buyer agreement allows. Buyers should understand any amount they could personally owe if the seller or another party does not cover the agreed fee.

Include compensation in your purchase budget

Discuss compensation before making an offer so the possible costs are clear. Review how the terms may affect your available cash, seller-concession requests, and mortgage financing. Lender and loan-program requirements can limit how certain fees are paid, so seek clarification early. For Pittsburgh-area buyers, the goal is transparency about representation and cost, not assuming that any standard commission applies. Compare an agent’s services, experience, and fee structure, then choose an agreement that meets your needs. A Pennsylvania real estate attorney can explain the legal effect of the contract if you have questions.

Are you thinking about your next move? Do you have more questions? Click here to contact me and plan your strategy.

Sources

National Association of REALTORS®: Consumer Guide to Written Buyer Agreements; Written Buyer Agreements 101; Consumer Guide: Offers of Compensation

*Compensation, financing requirements, and contractual obligations vary. Consult your lender and a qualified Pennsylvania real estate attorney for case-specific questions. Includes AI-generated content.