Who Pays Real Estate Agent Fees?

If you're getting ready to buy or sell a home, understanding real estate agent commission fees is more important than ever. As of 2025, the rules around how agents get paid have shifted significantly, thanks to a major industry shakeup from the National Association of Realtors (NAR).

This guide breaks down what’s changed, how commissions are disclosed and negotiated today, and what it means for you, whether you’re a homebuyer, a seller, or just exploring your options in the housing market. We’ll also explore alternatives for those who want to avoid fees and closing costs altogether.

What Are Real Estate Fees?

Real estate fees are the costs associated with hiring professionals, like agents and brokers, to help you navigate a real estate transaction. The most common fee is the real estate agent commission, which is usually calculated as a percentage of the final home sale price.

The average real estate commission in past years was between 5% and 6% of the sales price, typically split between the listing agent and the buyer’s agent. For example, on a $300,000 home, the total estate agent commission fees could be $18,000, paid from the proceeds of the sale.

Who Pays the Real Estate Agent in a Traditional Sale?

Historically, home sellers paid the total commission, and it was then divided between the two agents involved:

• The listing agent, who represents the seller
• The buyer’s agent, who represents the buyer

Though buyers didn’t directly pay their agents, the commission was often reflected in a higher listing price, meaning buyers still contributed indirectly through the home sale price.

The NAR Settlement: A New Era of Transparency

In 2024, the NAR faced a high-profile antitrust lawsuit. As a result, they agreed to a settlement that went into effect on August 17, 2024. This legal update from the National Association of Realtors changed the rules around how commissions are shared and advertised, aiming to bring more clarity to confusing and expensive real estate transactions.¹

While a legal professional can provide more detailed guidance on the nuances of these changes, here are the basics of what’s changed:

• Commissions are disclosed and negotiated separately between buyers and their agents
• Buyers pay their agents directly instead of relying on the seller to cover that cost
• Sellers can no longer advertise buyer’s agent commissions on the multiple listing service (MLS)

This marks a major shift in how real estate agent commission structures are presented and negotiated across the U.S.

Breakdown of Real Estate Agent Fees

Let’s break down the new structure:

Home Sellers

• Still responsible for paying their listing agent
• Can choose to offer additional compensation to a buyer’s agent, but it's no longer expected or included in MLS listings
• May need to adjust their listing price based on current market competition and strategy

Buyers

• Now responsible for directly compensating their buyer’s agent
• Must factor this into their budget along with closing costs and other expenses
• May consider alternative models like a flat fee agreement to save money

This new model gives both parties more flexibility, but also more responsibility when it comes to negotiating how their agent gets paid.

Are Commissions the Same Everywhere?

No. While there used to be a fairly consistent average real estate commission rate nationwide, that’s no longer the case.

Rates now vary based on:

• Region or city
• Price range of the home
• Level of competition among agents
• The agent’s experience and services offered

This is another reason why both buyers and sellers should compare multiple agents and ask detailed questions before signing a contract.

Alternative Agent Fee Models

Despite recent changes to how commissions are handled, many buyers and sellers still find real estate agent fees off-putting, whether it’s the high cost, lack of transparency, or uncertainty about the value they’re getting in return. As a result, more people are exploring alternative ways to buy and sell homes that offer greater control, lower costs, and fewer surprises.

• Flat Fee MLS Listings: Sellers pay a fixed price to list their property on the Multiple Listing Service (MLS), but handle the sale themselves.
• Discount Brokerages: These agents work for lower commissions or flat rates and may offer fewer services.
• For Sale By Owner (FSBO): Some home sellers skip agents altogether, handling the entire transaction independently. This can save on estate agent commission fees but comes with more risk and time commitment.
• Selling to a Cash Buyer: This is a fast, commission-free alternative that’s ideal for sellers who want a simple, hassle-free process. Cash home buyers purchase homes directly, without agents, showings, or repairs. There are no fees, and sellers can close in as little as ten days, often with perks like cash advances or moving assistance.

What About Closing Costs?

In addition to real estate fees, both buyers and sellers face various closing costs during a transaction. These can include title fees, lender fees, taxes, and more.

Here’s how commission fits in:

• For sellers, commissions reduce your final payout
• For buyers, paying your agent is now a separate line item that needs to be budgeted

Because buyers pay their own agents now, they may face increased upfront costs compared to previous years.

FAQs

Can buyers include commission costs in their loan?

Not usually. Most buyers will need to pay agent fees out of pocket unless their lender offers specific flexibility.

Can sellers still offer incentives to buyer agents?

Yes, but they can’t be advertised through the MLS anymore. It’s a private negotiation between the parties.

Is a flat fee a better option?

It depends on your situation. A flat fee may work well if you’re comfortable managing parts of the process yourself and want to save on commission costs.

Keep More of Your Home’s Value with 800CashToday

Between rising real estate agent commission fees, shifting market rules, and unpredictable closing costs, the traditional selling process can feel overwhelming and expensive. And with the buyer who now pays their agent directly, many sellers find themselves absorbing more costs or making extra concessions just to close the deal. But here’s the good news: there’s another way.

At 800CashToday, we offer a faster, easier alternative to the stress of listings, showings, and back-and-forth negotiations. When you sell your home directly to us, you get a simple, straightforward solution with no real estate agent fees and no repairs.

When you sell to 800CashToday, you can expect:

• Fast 10-day closing
• Up to $10,000 cash advance when escrow opens
• No real estate agent fees
• No repairs or cleaning required
• Free local moving assistance
• Flexible moving date to fit your schedule

Let’s simplify your real estate transaction. Contact us now for a free, no-obligation cash offer.

Source:

1. NAR. What the NAR Settlement Means for Home Buyers and Sellers.