Let’s Get Real about Buyers Paying Real Estate Commissions. Much of the recent news coverage of the real estate industry has focused on the shift that buyers now may be the one paying their REALTOR commission. Well, this shouldn’t be a newsflash, but the truth is the buyer ALWAYS pays.
Let me break this down for you. Say a homeowner sells their home for $500,000. Before the seller sees a dime of that $500,000, the transaction costs, including real estate commissions, are paid out through closing using the funds the buyer brought to the closing table. So who’s money actually paid those commissions? Oh yeah, the buyer’s money! It doesn’t matter if that money was from the buyer’s down payment or from the buyer’s loan…it was the buyer’s side of the transaction that made paying those commissions possible.
The actual thing that’s changing is a seller can no longer advertise a pre-determined commission amount to the buyer’s agent as a part of the MLS marketing. But rest assured a buyer’s REALTOR commission will still be negotiable and paid at closing. Maybe from time to time its paid by the buyer directly or, more likely, worked into the price of the home as it more commonly is now.
But make no mistake about it, either way the buyers always pay.