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Can a Seller Refuse to Pay a Buyer’s Agent? Avoid This HUGE Mistake

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Can a seller refuse to pay a buyer’s agent?| Why do sellers pay realtor fees? | Commission in a FSBO sale | Is commission negotiable?

Concerned about the high costs of selling your home, which can reach 5-6% in commissions nationwide? You might wonder if cutting costs by refusing to pay the buyer’s agent commission entirely is possible.

Legally, you’re not required to pay this commission unless it’s outlined in a purchase agreement. However, backing out of a commission agreement specified in your contract can disrupt the transaction and may lead to legal complications.

Offering a competitive buyer’s agent fee is usually a good idea. The commission for the buyer’s agent incentivizes agents to show your property to potential buyers. Without this incentive, agents may be less inclined to show your property to prospective buyers. 

To save on home sale costs without jeopardizing your sale, consider alternatives like Clever Real Estate.  Clever connects you with top local agents from renowned brokerages and negotiates reduced commission rates. Through Clever, your listing fee could be as low as 1.5%, considerably less than the typical 3%. This means the average seller using Clever saves $7,000 while offering a competitive buyer’s agent commission.

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Can a seller refuse to pay a buyer’s agent?

Technically, a seller isn’t obligated to provide a commission for the buyer’s agent, but this must be decided and stated clearly in the property listing.

Selling your home comes with significant expenses, notably realtor commissions. Typically, these amount to around 5-6% of your home’s sale price, averaging 5.49% nationwide. This fee covers your agent’s and the buyer’s agent’s commissions.

Not offering a commission to the buyer’s agent seems like a good way to cut down these costs. But it makes your listing less attractive to real estate agents and potential buyers. This is particularly relevant if you list on the Multiple Listing Service (MLS), where the offered buyer’s agent commission is displayed. The MLS is a primary tool for home sales, used by about 86% of sellers, and typically more effective than other methods like yard signs.[1]

Real estate agents are generally driven by commission. Without it, they may be less inclined to show your property or avoid it altogether.

What happens if you agree to pay a commission –  but later refuse?

You risk jeopardizing the sale if you agree to pay a buyer’s agent commission in a purchase agreement but later renege. 

The buyer’s agent may attempt to have their client cover the fee, but this is uncertain given the already high home costs. Real estate transactions hinge on the agreement between buyers, sellers, and their agents, often including negotiated commissions.

Also note that if you’ve agreed to a commission in a binding purchase agreement and then retract, you might breach the contract. This could lead to legal consequences, with the broker possibly seeking damages or the initially agreed commission.

Why do sellers pay realtor commission?

The practice of sellers paying the buyer’s agent commission is largely influenced by the National Association of Realtors (NAR). NAR’s regulations require brokers on Realtor-affiliated MLS platforms to offer compensation to buyer’s agents.[2] With more than 86% of homes being sold via the MLS, this has become a common practice.

Sellers typically bear the cost of the buyer’s agent commission, recognizing these agents’ crucial role in attracting potential buyers and facilitating the deal’s closure. 

The commission is a financial motivation for realtors to actively showcase and engage with a home during selling. Without this commission, buyer’s agents might invest considerable time in a transaction without compensation.

For this reason, real estate agents may choose not to show properties to their clients if the listing doesn’t include a commission or has one well below the local average. Including a buyer’s agent commission is key to ensuring that your home receives adequate exposure and interest from potential buyers.

Are there any exceptions to this rule?

Yes. However, exceptions to the rule of sellers paying the buyer’s agent commission are uncommon. 

In certain informal transactions, buyers may pay their agent’s commission. This situation often arises in family sales or deals between close acquaintances, where the buyer decides to bear the buyer’s agent commission, perhaps as a gesture of goodwill.

Generally, the seller pays the buyer’s agent commission, particularly in more formal and traditional property sales.

🏡 Realtor commission update: NAR settles lawsuit

The National Association of Realtors (NAR) has recently announced a landmark settlement, concluding litigation related to broker commissions.

This agreement, impacting over a million NAR members, brokerages, and MLS systems, involves NAR paying $418 million over four years without admitting to any wrongdoing.

The settlement aims to modernize real estate commission practices by introducing significant changes, including prohibiting the listing of broker compensation offers through the MLS to encourage negotiation outside MLS systems.

Additionally, agents working with buyers must have written agreements detailing their services and fees. Set to take effect in mid-July 2024 and pending court approval, these updates promise a shift towards greater transparency and choice in real estate transactions.

HomeBay is committed to informing you of these developments, so stay tuned for more updates.

What does a buyer’s agent do?

Buyer’s agents are involved in the process from start to finish, including:

  • Identifying suitable properties
  • Scheduling and facilitating viewings
  • Writing and submitting an offer
  • Negotiating price and contingencies
  • Referring buyers to reputable local professionals (e.g., home inspectors and mortgage brokers)
  • Resolving issues based on due diligence findings
  • Guiding buyers through the closing process

Real estate agents do a lot for the buyer to ensure a smooth sale, which also benefits the seller.

Who pays the buyer’s agent in a FSBO sale?

Selling your home as For Sale By Owner (FSBO) means you won’t need to pay a listing agent commission, averaging 2.83% nationwide. 

However, FSBO sellers are generally still expected to pay the buyer’s agent commission, which typically ranges from 2-3% of the home’s sale price and averages 2.66% nationwide. This commission rewards the buyer’s agent for bringing the buyer to the deal, benefiting both parties.

Deciding against offering a buyer’s agent commission in an FSBO sale is an option, but may not be the most advantageous strategy. Buyer’s agents play a crucial role in attracting prospective buyers. Their motivation to present your property to clients without a commission could diminish.

FSBO sellers might instead consider adding approximately 2-3% to their listing price. This adjustment can help cover the buyer’s agent commission, aligning the FSBO approach closely with traditional sales methods. 

» Learn: What Is the Average Realtor Commission?

Can you negotiate realtor commission?

Negotiating realtor commissions is possible, but it’s challenging to do it solo. One industry study found that just 22% of home sellers brought up the topic of commissions and successfully negotiated a lower rate with their agent.[3]

While there’s always room for negotiation, making a strong case is key. For instance, some agents might be open to lowering their commission for a fast sale or in situations where they represent both the buyer and seller (known as dual agency, though not legal in all areas).

A practical solution for negotiating lower commissions is to work with services like Clever Real Estate. Clever can help negotiate reduced listing fees on your behalf, potentially lowering your costs to 1.5% instead of 3%. On average, sellers save $7,000 in commissions without the hassle of direct negotiation.

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Clever Real Estate negotiates lower commissions with top agents near you so you can get amazing service AND save thousands.
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Recommended reading


Can a seller refuse to pay a buyer’s agent?

If you’ve already signed a purchase agreement, refusing to pay the commission you owe may ruin your deal and can result in legal trouble. And while you can technically refuse to offer buyer’s agent commission in the first place, this will likely hurt your ability to attract buyers. Learn more.

How does the realtor get paid?

In a typical home sale, the seller pays both their real estate agent and the buyer’s agent out of their proceeds from the sale. Realtor commission is the most significant closing cost sellers pay — but it’s possible to negotiate. Learn how.


[1] National Association of Realtors – "Quick Real Estate Statistics".
[2] National Association of Realtors – "Participation Agreement".
[3] National Association of Realtors – "NAR's 2023 Home Buyers and Sellers Generational Trends Report".

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