commission. That can bring forth some issues. For example, sometimes the split might not be negotiated evenly. A seller could have agreed to pay a commission of 5.5% that, if further divided, the buyer’s agent would receive 2.4% while the listing agent receives 3.1% of the commission. Even though some agents are associate brokers, or brokers in general, all commission payments are instructed to go through to the broker who’s managing the brokerage where the agent is working. From there, the commission is then split to the agent and the broker, according to the agreement that’s been made. The split will vary; sometimes, newer agents will earn a small portion of the commission compared to the experienced or successful agents who generally sell more expensive properties or homes.
PAYING THE COMMISSION ITSELF
Traditionally, real estate commissions have been paid at settlement by the seller, with the fee coming directly out of the proceeds from the sale of the home. Buyers have always indirectly paid this commission as part of the home’s purchase price, and sellers typically account for the commission when setting their listing price. However, following the National Association of REALTORS® (NAR) class action settlement, which took effect in mid-2024, the process has changed in some important ways. Sellers are no longer required to offer compensation to a buyer’s agent, although many still choose to do so as part of their strategy to attract more potential buyers. That said, in cases where the seller does not offer to cover the buyer’s agent commission, the responsibility for paying the buyer’s agent falls to the buyer, as outlined in the Buyer Agency Contract. The specific amount or percentage is something you, as the buyer, will agree upon directly with your REALTOR®
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