How Buyer’s Agent Fees Work and What You Can Expect to Pay

Buying a house (and getting a good deal) requires market knowledge, negotiation skills, and attention to detail. That’s why most buyers hire a real estate agent to guide them, which often involves paying a buyer’s agent fee (or asking the seller to cover it).

Most buyer’s agents are paid on sales commission, charged as a percentage of the home's final sale price. Some buyer’s agents charge a flat fee instead of a commission rate, but most work on commission, only getting paid when you close.

Since September 2024, commission changes by the National Association of Realtors (NAR) impacted buyer’s agent fees. As part of a legal settlement, buyer’s agents must negotiate their fees upfront with buyers in the agent agreement. However, these fees can also be negotiated with sellers during the offer process.

What buyer’s agents do | How much they cost | Who pays commission | How to save

What buyer’s agents do

The buyer’s agent typically starts working with you before you make any offers, providing key services that you might not have the time or expertise to handle solo.

Buyer’s agents are local market experts, so they can help you find a home that suits your needs, introduce you to suitable neighborhoods or areas, and make appointments for home showings.

A buyer’s agent also has access to the local multiple listing service (MLS), the platform where homes are listed for sale, and you’ll need to work directly with a buyer’s agent to explore homes on the MLS.

After you find your dream home, the buyer’s agent will help you with:

1. Writing an offer: Crafting an initial offer based on comparable home sales and your home-buying budget.
2. Negotiating the price: Aiming to secure a contract with the best possible price and terms for you.
3. Adding contingencies to the offer: Including necessary contingencies like a home inspection and appraisal.
4. Submitting the offer to the seller: Handling the official paperwork and emailing the offer to the seller or their agent.
5. Managing negotiations: Addressing any issues after the inspection and appraisal, whether it means re-negotiating the price and terms of the contract or making necessary repairs.
6. Referring you to real estate professionals: Connecting you to local home inspectors, movers, contractors, attorneys, and other real estate specialists who can help protect your interests and close successfully and on time.
7. Guiding you through closing: Overseeing the final stages of your home purchase and ensuring you meet all requirements, including handing over the keys and securing the title in your name.

Benefits of working with a buyer’s agent

Working with a buyer’s agent can provide numerous benefits to homebuyers. One key advantage is access to a wider range of properties, including those not publicly listed.

Buyer’s agents offer expert guidance on the home-buying process and local market trends, helping you make informed decisions. They assist with negotiating offers and counteroffers, ensuring that your interests are protected throughout the transaction.

A buyer’s agent also helps navigate complex paperwork and regulatory requirements, making the process smoother and less stressful. Additionally, you may benefit from potential cost savings through negotiated commissions or rebates, making the investment in a buyer’s agent worthwhile.

How much is a typical real estate agent’s fee?

The average commission paid on a single home sale is 5-6% of the home’s sales price. This amount is usually split between the buyer’s agent and the listing agent; typically, the buyer’s agent makes slightly less than the listing agent.

With a 6% commission rate on a $400,000 sale, the real estate agents earn $24,000. However, the actual amount that a buyer’s agent makes varies depending on the home sales price. Since the NAR settlement, buyer’s agent fees have fallen slightly; the average was 2.62% in January and 2.55% in August.^[1]

Here’s how much a buyer’s agent earns on a $400,000 home sale with different commission rates.

Are buyer's agent fees negotiable?

Yes, buyer commission can be negotiated. Some buyer’s agents charge 2% commission or even 1% commission.

However, a low-commission realtor should offer the same level of service as a realtor who charges 3% commission. It’s important to discuss these variables with the buyer’s agent before signing an agreement.

Negotiating a lower commission rate for the same level of service is always possible! If you’re hoping to save money on a buyer’s agent and negotiating makes you nervous, consider a service like Clever Real Estate. Buyers matched with an agent through Clever Real Estate may qualify for cash back on their home purchase, making it an easy way to reduce commission costs.

Some buyer’s agents will charge flat fees, which don’t vary based on the home price but can vary depending on the level of services provided. A flat-fee agent might charge less for basic services (such as writing offers) and more for negotiating price and contingencies with the seller’s agent. A full-service flat-fee agent will likely cost more than one providing limited services.

» MORE: Steps to negotiating realtor fees

Who pays the buyer’s agent fee?

Sellers have traditionally paid the buyer’s agent fee at closing. After the buyer pays the seller for the home (either through a mortgage or with cash), the seller pays both the buyer’s agent and the listing agent from their proceeds.

For the most part, sellers are still paying buyer’s agent fees, but the NAR settlement has changed this practice in some noteworthy ways.

• First, sellers can no longer advertise buyer’s agent fees in their MLS listings; previously, NAR required sellers to list buyer’s agent commission on the MLS.^[2]
• Buyers are now responsible for negotiating their agent's fee and signing a buyer’s agent agreement before getting help with their home search and purchase.^[3]
• Sellers sometimes negotiate buyer’s agent fees with buyers during the offer process. Sellers might ask the buyer to lower the buyer’s agent fee before accepting their offer, or decline to pay the fee — in which case, the buyer will need to pay their agent themselves.

How to save on the buyer’s agent fee

There are a few options for saving money on the buyer’s agent fee for both sides of a real estate transaction.

For buyers

Buyers can either negotiate a lower buyer’s agent commission upfront before signing the buyer’s agent agreement, or they might choose to work with an agent who charges a flat fee. (This might or might not save them much money, depending on the final price of the home and the flat fee amount.) Another option is to work with an agent who offers a home buyer rebate.

For sellers

Sellers can negotiate a lower buyer’s agent fee during the offer process, asking the buyer to lower the amount of commission they are paying their agent. Or, they can decline to pay the buyer’s agent fee entirely. If sellers don’t pay the buyer’s agent fee, the buyer will have to shoulder the full cost of the fee, which adds to their budget.

Sellers must understand that their ability to negotiate the buyer’s agent fee — or to decline to pay it entirely — is contingent on their local market. Deciding not to pay the buyer’s agent fee could mean that an otherwise solid offer doesn’t result in a home sale, which could in turn mean that the home stays on the market longer, possibly with lower offers.

Declining to pay the buyer’s agent fee should only be considered in markets with plenty of qualified buyers. In these markets, the seller can be confident of receiving multiple offers, and buyers will likely be more willing to accommodate the buyer’s agent fee on their own.

The bottom line

Buyer’s agents are typically paid on sales commission, so the buyer’s agent fee depends on the home's final sales price.

As a valuable resource to and advocate for buyers, it’s smart to work with a buyer’s agent (especially for first-time buyers), and there are ways to save money on a buyer’s agent fee if you’re not willing to pay 2.5-3% commission.

Clever Real Estate is a good option for finding qualified buyer’s agents and evaluating their fees. It allows buyers to compare agents and their fees before signing a buyer’s agent agreement, and qualified buyers can also get cash back after closing. Try Clever today and save more!