Understand who is responsible for paying realtor fees in a home sale. Learn what buyers and sellers need to know about these costs.
When it comes to a property sale, each party—the buyer and the seller—has their own real estate agent to represent their interests and help them navigate the process, from early planning to closing day. As such, the buyer’s agent and the seller’s listing agent both get paid when a sale closes.
Although logic would dictate that the buyer and a seller each pay for their own real estate agent’s services, it has long been the seller who foots the whole bill. However, there is an opportunity to negotiate on real estate fees and commissions—plus new regulations that alter who’s responsible for what starting in 2024.
If you’re considering a home sale, expect some changes since you last entered into a home purchase. On August 17, 2024, a settlement agreement resulting from a lawsuit against the National Association of Realtors (NAR) went into effect.
More than 30 realtor associations and multiple listing services (MLS) had already put these mandates in place before the deadline1:
These changes will provide more transparency and opportunity to negotiate when it comes to commission rates and who pays realtor fees. Experts anticipate a significant drop in buyers’ agent commissions. In fact, by the start of August, as many agencies were already enacting the new policies, the average U.S. buyer’s agent commission had dropped to 2.55%, down from 2.62% in January.2,3
As discussed above, fee structures now have a divide between the old process and the post-2024 settlement regulations. Since these changes are so new, it’s important to understand both when considering what realtors charge to sell a home.
Home buyers and sellers each have to find their own real estate agents to help them through the process. On closing day, they each have a different list of closing costs to cover.
The seller has traditionally been the party who pays the real estate commission fee in full at closing to the listing agent, who then splits it with the buyer’s agent.
Under new regulations, the buyer will be contractually responsible for covering their own individually negotiated agent commission. Experts anticipate that the seller will continue to cover the cost in most cases by rolling it into their purchase offer and negotiation process.2
In the past, real estate commissions were typically split close to 50/50 between the listing agent and the buyer’s agent. The listing agent would often include the planned commission split in the listing agreement with the seller and advertise it on MLS listings to entice buyers’ agents.
Because the split was in the listing agent’s control, buyers’ agents could be swayed toward encouraging their clients to view properties with higher or guaranteed commissions. This meant they were likely to avoid showing clients listings that could be better for the buyer but not guarantee an acceptable profit for the buyer’s agent.
Under the new guidelines, commission splits will no longer be managed between agents. Instead, buyers and sellers will negotiate commission percentages with their own agents and be responsible for covering those costs (either directly or as an above-board part of offer negotiation).
Rather than a traditional sale that requires multiple agents and potential buyers, Truehold's sell and stay transaction provides another option. When you sell your home, you combine two deals into one convenient real estate transaction: a home sale and a rental lease.
Instead of moving in order to cash out your home equity, you can continue living at home after the sale as a renter.*
A sell and stay transaction comes with several benefits:
Plus, you’ll be able to use your home equity to fund whatever you like—such as a new business or retirement plans—while remaining in your familiar home and neighborhood.
We will always be transparent about our product’s fees and potential fees. Truehold charges a 5.5% transaction fee on the purchase price of your home.** When working with Truehold, realtors receive the agreed-upon real estate commission per their agreement with the seller.
If you’re considering a sale, shop around and choose the best solution for your family and goals. To learn more about how a sell and stay transaction could work for you, call us today and one of our representatives will reach out to review our process and answer your questions.
Disclaimer*: After the home sale, you must comply with the terms of your lease to continue living in the home. This includes making timely payments on your rent for your minimum lease term (which ranges from 6 – 24 months).
**This fee is paid to our broker at closing out of the sale proceeds, a portion of which is shared with a brokerage entity owned by Truehold. Customary closing fees apply to the sale. Depending on the jurisdiction, closing taxes may apply as well. These fees and taxes will be outlined in the settlement statement, which is prepared by an independent settlement company. Following the sale, the lease agreement will be effective, and there are potential fees payable thereunder. Please carefully read the fee provisions in the lease agreement.
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