This is one of the biggest changes in real estate in recent years, so if you've bought a home before, the process may look different this time.

The simplest answer is: As a buyer, you are responsible for the compensation you've agreed to pay your buyer's agent. But that does not necessarily mean you'll write your agent a separate check at closing. Depending on the transaction, some or all of your buyer agent's compensation may be paid by the seller, the listing brokerage or by you.

Let's break that down.

It Starts With Your Buyer Agreement

Before touring homes with your buyer agent, you'll enter into a written buyer agreement. Among other things, that agreement explains the services your agent will provide and how the brokerage will be compensated. The compensation has to be clearly defined, and commissions and brokerage fees are negotiable.

This is important because your agent's compensation is no longer something happening somewhere in the background. You should know what you've agreed to before you begin looking at homes.

So Am I Going to Have to Pay My Agent Out of Pocket?

Not necessarily. Your buyer agreement establishes your responsibility, but there are different ways that obligation may ultimately be satisfied. For example, a seller may agree to pay some or all of your buyer broker's compensation as part of the terms of your purchase.

That's something we can negotiate.

In fact, the Massachusetts Association of REALTORS® Contract to Purchase that we use contains a section specifically allowing us to request that the seller pay a stated amount or percentage to the buyer's broker. So when we're preparing your offer, compensation can become another part of the negotiation, along with price, deposits, dates, contingencies and other terms.

Didn't the Seller Always Pay the Buyer Agent?

This is where things have changed. In the past, a listing in the Multiple Listing Service typically included an offer of compensation from the listing brokerage to the brokerage representing the buyer. That is no longer how our MLS works. Offers of compensation to buyer brokers are prohibited in the MLS.

That doesn't mean a seller or listing broker is prohibited from paying a buyer broker. They may still agree to do so. It simply isn't a unilateral offer of compensation made through the MLS anymore. And we shouldn't be looking for secret signals in listing photos to figure it out either.

Yes, apparently real estate briefly reached the point where people thought the hands on a decorative clock might be communicating a commission percentage. We can do better than decoding the kitchen accessories. 😂

We Can Simply Ask for It in the Offer

This is the part buyers sometimes find surprisingly straightforward. Suppose your buyer agreement says your brokerage will be compensated a particular amount. When you find a home you'd like to purchase, your Contract to Purchase can include a request for the seller to pay that buyer-broker compensation.

The seller can consider that request along with everything else in your offer. They may accept it. They may negotiate it. Or they may decline it.

NAR's current guidance specifically recognizes that buyers may request buyer-broker compensation as a term of their purchase offer.

What If the Seller Won't Pay It?

Then we'll talk about what that means before you commit to purchasing the property. Depending on your buyer agreement and the terms ultimately negotiated, you may be responsible for some or all of your buyer broker's compensation yourself. And that matters when you're budgeting for a home.

A buyer who has carefully saved for a down payment, closing costs, inspections and moving expenses needs to understand whether there could also be a buyer-broker expense. That's one reason this conversation should happen at the beginning of your home search, not two days before closing.

Can My Agent Receive More Than We Agreed To?

No.

Under current MLS rules, a buyer broker cannot receive compensation from any source that exceeds the amount or rate agreed to with the buyer in the written buyer agreement. Compensation also must be objectively ascertainable rather than something open-ended such as "whatever the seller offers."  So if you've agreed on a particular compensation amount, an agent can't simply receive more because another party is willing to pay more.

Does Asking the Seller to Pay My Agent Affect My Offer?

It can. From the seller's perspective, a request to pay buyer-broker compensation is part of the financial terms of your offer. That doesn't automatically make it good, bad, strong or weak. It simply means we need to look at the whole offer.

• Purchase price matters.
• Financing matters.
• Contingencies matter.
• Timing matters.
• And requests for the seller to pay expenses matter.

Our job is to help you understand how all of those pieces fit together so you can decide what terms make sense for you.

Why Did This Change?

Real estate industry practices changed nationally beginning in August 2024 following the National Association of REALTORS® settlement of commission-related litigation.

Among the changes, many real estate professionals must have a written agreement with a buyer before touring homes, and offers of buyer-broker compensation can no longer be made through the MLS. The written agreement is intended to make both the services being provided and the compensation for those services clear at the beginning of the relationship.

Sellers can still agree to compensate buyer brokers, and compensation remains negotiable.

The Most Important Thing Is That You Know Before You Buy

If all of this sounds more complicated than the old explanation of "the seller pays the commission," there's a reason. That explanation was never particularly good at showing buyers how real estate compensation actually worked.

The current system puts the conversation much more directly in front of you. Before we start touring homes together, we'll explain:

• What services we're providing.
• What we've agreed our brokerage will be paid.
• How that compensation might be paid.
• What could happen if a seller doesn't agree to pay it.

And when you decide to make an offer, we'll discuss whether requesting seller-paid buyer-broker compensation makes sense as part of your offer strategy. You shouldn't arrive at the closing table wondering how your buyer agent gets paid.

You should understand the arrangement before we ever walk through the first front door.