Who pays the real estate agent commission?
The commission is paid out of the seller’s proceeds at closing. Historically the seller’s payment covered both the listing agent and the buyer’s agent through a split. Since the 2024 NAR settlement, buyer-agent compensation is negotiated more openly and separately, so who pays which side is now an explicit part of the deal.
In the traditional model, the seller signed a listing agreement setting a total commission, and the listing brokerage shared part of it with whichever brokerage brought the buyer. Functionally, the money came out of the seller’s proceeds, even though it compensated two agents. The 2024 National Association of Realtors settlement changed the mechanics: offers of buyer-agent compensation are no longer published on the shared listing databases, and buyers now sign written agreements with their own agents about how that agent is paid. The practical effect is that compensation for the buyer’s side is openly negotiable — a seller may still offer it as a concession to attract buyers, or may not. None of this is a fixed rule, which is exactly why you should read what it really costs to sell your house and treat every commission number as a starting point, not a verdict.
How is real estate commission negotiated?
You negotiate commission the same way you would any service contract: ask what the fee includes, compare multiple agents, and put the rate in writing. Rates move with the services provided, the price of the home, local competition, and how motivated the agent is to win your listing. Everything is on the table.
Negotiation starts with information. Ask each agent to itemize what their fee covers — photography, staging, advertising spend, open houses, and negotiation — because a lower rate with fewer services is not automatically a better deal. Then create genuine competition. When agents know they are one of several being considered, they have a concrete reason to sharpen their number and their plan rather than quote a default. This is the core idea behind a marketplace where agents compete for your listing: sealed proposals put commission, marketing, and projected price side by side so you compare on value, not just price. The strongest listing teams also protect their margins by running lean and never missing a lead — many rely on tools that answer every incoming buyer call for a real estate team so no opportunity slips away. Get the final rate and everything it includes in the written agreement before you sign.
What changed after the 2024 NAR settlement?
The 2024 National Association of Realtors settlement removed buyer-agent commission offers from shared listing databases and required buyers to sign written agreements with their agents. It reinforced that commissions were never fixed and are fully negotiable. It did not set any new standard rate — it made the negotiation explicit for both sides.
The settlement, which took effect in 2024, addressed how buyer-agent compensation was communicated and assumed. Two changes matter most for sellers. First, listing databases can no longer display an offer of compensation to the buyer’s agent, so that payment is now negotiated deal by deal rather than presumed. Second, buyers must sign a written representation agreement before touring homes, spelling out how their own agent is paid. For sellers, the upshot is flexibility: you decide whether to offer any buyer-side compensation as an incentive, and you negotiate your listing agent’s fee on its own merits. What did not change is that there is still no legally mandated percentage — the widely repeated "6%" was always a custom, not a rule. Approach quotes accordingly, compare flat-fee against percentage models, and ask every agent to justify their number in writing.
| Percentage commission | Flat-fee / competed rate | |
|---|---|---|
| How the fee is set | A percentage of the final sale price | A fixed amount or a rate the agent competes down to win the listing |
| Moves with sale price | Yes — a higher price means a higher dollar fee | Not necessarily; a flat fee stays the same as price rises |
| Negotiable | Yes, always | Yes — competition is the mechanism |
| Services included | Varies; confirm in writing | Varies; confirm in writing |
| Best when | You want full-service representation and will negotiate the rate | You want to compare several agents’ sharpest terms side by side |