Who Pays the Buyer Agent's Commission?

You’ve decided it’s time to move. You start looking online at homes for sale and you’re excited to see some in person.
Have you wondered how the Realtor who shows you those homes gets paid?

In the majority of cases, when a home is listed for sale on MLS, the seller is represented by a real estate brokerage, and in turn, by a sales representative of that brokerage.

At the time the seller signs the listing agreement, the amount of total commission due to both the listing brokerage and the brokerage representing the buyer is agreed to in writing.

Once the property is sold and closed, commission for both the seller’s and the buyer’s agents is paid out of the proceeds of the sale of the home.

Prior to making an offer, the buyer signs a Buyer Representation Agreement and agrees that the brokerage representing them is entitled to be paid out of the proceeds of the sale of the home, according to the terms set out in the listing agreement. In this circumstance, the buyer is not paying their own agent directly.

But there are rare exceptions. If someone tries to sell their own home themselves, they may not have accounted for compensation for the buyer’s agent. In this case, if the buyer wants to buy such a home, they would have to pay their agent directly. Their agent can explain all of this to them before even booking an appointment to see the home, so there are no surprises and they can decide if they want to proceed.