5 minutes read
Answers to top buyer's agent commission questions
KB
04/11/2025
Buying a home is exciting, except for the confusing real estate fees.
One of the most confusing fees? The buyer’s agent commission.
You may be wondering: Can I negotiate it? Who actually pays? And why does it even matter? What most homebuyers don’t realize is that they have more power than ever. Understanding the buyer’s agent commission could save you thousands.
Let’s explore the most common questions asked about buyer’s agent commissions - what they are, how do they work, and what they mean for your homeownership journey.
It is the fee paid to the real estate agent who represents the homebuyer during the real estate transaction.
This fee pays the agent for their expertise, time, and services, which include negotiating offers, coordinating inspections, and guiding you through closing.
Traditionally, buyer’s agents earn 2.5–3% of the home’s sale price though this can vary based on location, market conditions, and negotiations.
For example, on a $500,000 home, the buyer’s agent commission could range from $12,500 to $15,000.
In most traditional deals, the seller covers this fee as part of the total commission they pay to their own agent. That total commission (usually 5–6%) is split between the listing agent and your agent.
Absolutely. Commissions aren’tset in stone. Whether you'rebuying in a hot market or looking at higher-priced homes, it’stotally okayto have a conversation about the rate. Some agents even offer flat fees or discounted rates—just make sure to review your buyer-agent agreement carefully.
While avoiding the fee entirely is rare, you can reduce costs by negotiating a lower rate with your agent and using alternative platforms that prioritize savings.
For example, WithJoy.AI allows homebuyers to keep 70% of the buyer’s agent commission when purchasing a home, saving you thousands of dollars.
In new construction, the builder or developer typically covers the buyer’s agent commission as part of their sales budget. This incentivizes agents to bring buyers to their properties. It’s best to always confirm this upfront.
If the seller refuses to cover the fee (or offers less than your agent’s agreed rate), your buyer-agent agreement may require you to pay the difference.
This ensures your agent is compensated for their work. However, a skilled agent often pays for themselves by securing better terms, avoiding pitfalls, and negotiating price reductions.
Yes, buyer’s agent commissions vary by state.
In expensive real estate markets like California, the percentage is often lower. And in less expensive real estate markets like Michigan.
There have been some new rule changes put into place since the National Association of Realtors (NAR) Settlement, which took effect in August 2024.Some of the major changes include;
Sellers don’t need to offer a buyer’s agent commission. But majority of the time sellers still offer to pay for a buyer’s agent because it can benefit both parties for the transaction to be completed.
For homebuyers, especially first-time homebuyers, this helps reduce upfront costs and makes professional help more accessible.This support can make the homebuying process smoother and more informed.
You’re prepped and ready for your homebuying journey with these insights.
Knowing more about buyer’s agent commissions doesn’t have to feel like decoding a secret message.
When you ask the right questions and leverage modern solutions like WithJoy.AI’s commission rebate, you can turn a confusing cost into a savings opportunity.
Every dollar saved on commissions is a dollar you can invest in your new home - whether that’s upgrading to brand new appliances or simply painting the walls.
Happy house hunting! 🏠✨
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