Questions
Who Pays the Real Estate Agent? A Complete Guide
Traditionally, the seller pays both the listing agent and the buyer's agent commissions from the sale proceeds. After the 2024 NAR rule changes, buyers may now pay their agent directly, but sellers can still offer to cover it. In Danville, CA, most sellers still pay both commissions, but terms are negotiable.
Who Pays the Real Estate Agent? The Traditional Answer
The seller has traditionally been the party who pays the real estate commission fee. In a typical transaction, the seller pays the total commission out of the sale proceeds, and that amount is split between the listing agent and the buyer's agent. This arrangement is still common in Danville, Alamo, and San Ramon, though the 2024 rule changes have introduced more flexibility.
| Who Pays | What They Pay | Typical Range |
|---|---|---|
| Seller | Both listing and buyer agent commissions | Varies, often 5–6% of sale price |
| Buyer | Usually nothing directly, but may pay if negotiated | Varies, can be 2–3% of purchase price |
| Listing Agent | Receives a portion of the commission | Varies, often half of total |
| Buyer's Agent | Receives a portion of the commission | Varies, often half of total |
In California, the seller typically pays the realtor fees at closing, but nothing is set in stone. The exact split and amount are negotiated in the listing agreement and purchase contract. If you're selling in Danville, we can walk you through the numbers. Ahern Real Estate Group has helped local sellers understand their costs for years.
New Rules for Real Estate Commissions: What Changed in 2024
In 2024, the National Association of Realtors (NAR) implemented rule changes that affect how buyer agent commissions are paid. The key change: buyer agents must now have a written agreement with the buyer before touring homes, and that agreement must state the agent's compensation. Sellers are no longer required to offer a buyer's agent commission through the MLS, but they can still choose to do so.
| Before 2024 | After 2024 |
|---|---|
| Seller offered a commission to buyer's agent via MLS | Seller may still offer, but it's not required |
| Buyer didn't sign an agreement with their agent | Buyer must sign a buyer agency agreement before touring |
| Commission was set by the listing agent | Commission is negotiable between buyer and agent |
| Buyer typically paid nothing directly | Buyer may be responsible for paying their agent's fee |
For a deeper dive, see our new rules for real estate commissions guide. The bottom line: buyers are now generally responsible for paying their own real estate agent's fees unless they negotiate otherwise.
How Much Do Real Estate Agents Get Paid? Commission Rates Explained
Real estate agent pay is typically a percentage of the home's sale price, but the exact amount varies widely. Here's what drives the cost and what you can generally expect.
| Factor | Why It Matters | Typical Range |
|---|---|---|
| Commission rate | Most agents work on a commission basis, not hourly. The rate is negotiable and often split between the listing and buyer's agents. | Usually 5–6% of the sale price, but it varies by market and agreement. |
| Sale price | Higher-priced homes mean higher dollar amounts for the same percentage. | On a $300,000 home, a 5% commission is around $15,000; on a $1 million home, it's around $50,000. These are general examples, not guarantees. |
| Broker split | Agents often share their commission with their brokerage. The split depends on the agent's experience and agreement. | Common splits range from 50/50 to 90/10 in favor of the agent, but this varies. |
| Negotiation | Commissions are not set by law; you can negotiate with your agent. | Some agents may offer lower rates or flat fees, especially in competitive markets. |
For a deeper dive into local commission figures, see our guide on how much commission sellers pay in Danville.
Do Buyers Pay Their Agent? What Homebuyers Need to Know
Under the traditional model, buyers rarely paid their agent directly—the seller's commission covered both agents. But after the 2024 rule changes, buyers may now be asked to pay their own agent's fee. Here's what that looks like in practice.
| Scenario | Who Pays the Buyer's Agent? | Typical Arrangement |
|---|---|---|
| Seller offers buyer-agent compensation | Seller, out of sale proceeds | Seller agrees to pay a set amount or percentage, often listed in the MLS. Buyer pays nothing directly. |
| Seller doesn't offer compensation | Buyer, out of pocket | Buyer and agent negotiate a fee in a buyer representation agreement. Buyer pays at closing or as agreed. |
| Seller offers less than the agreed fee | Buyer pays the difference | Buyer covers the shortfall between what the seller offers and what the buyer agreed to pay their agent. |
| Seller refuses to pay any buyer-agent fee | Buyer pays the full fee | Buyer is responsible for the entire commission, unless negotiated otherwise. |
In practice, many sellers still choose to offer buyer-agent compensation to attract more buyers, but it's no longer guaranteed. Buyers should clarify the fee arrangement before signing any agreement.
Directions to our homes for sale in Danville, CA from Las Trampas Regional Wilderness
Start at Las Trampas Regional Wilderness and head to Ahern Real Estate Group at 671 San Ramon Valley Blvd, Danville, CA 94526.
How Real Estate Agents Get Paid When You Sell Your Home
When you sell your home, your listing agent is typically paid through a commission deducted from the sale proceeds at closing. Here's what that involves.
| Factor | Why It Matters | Typical Range |
|---|---|---|
| Listing agent commission | This is the fee for marketing, listing, and negotiating your sale. | Often a percentage of the sale price, commonly around 2.5–3%, but it varies. |
| Buyer's agent commission | In many transactions, the seller also pays the buyer's agent, but this is now negotiable under new rules. | Can be a similar percentage, but you can negotiate or decline to pay it. |
| Total commission | The combined commission for both agents is usually paid by the seller out of the sale proceeds. | Typically 5–6% total, but this varies by agreement. |
| Other closing costs | Commissions are separate from other seller costs like title insurance, escrow fees, and transfer taxes. | These vary widely by location and transaction. |
For a local perspective, see who pays realtor fees in Danville.
Who Pays Realtor Fees in California? Local Rules Explained
In California, the real estate commission is customarily paid by the sellers of the transaction, but the new rules have changed the landscape. Sellers are not obligated to pay the buyer's agent, but many still do. The California Department of Real Estate doesn't set commission rates; they're negotiable.
| Factor | California Context | Typical Range |
|---|---|---|
| Commission rate | Negotiated, not regulated | Varies, often 5–6% |
| Buyer's agent fee | Can be paid by seller, buyer, or split | Varies |
| Written agreements | Required for buyer agents | N/A |
If you're buying or selling in Danville, Alamo, or Blackhawk, it's important to understand these rules. For a local perspective, see our who pays realtor fees in Danville, CA article.
How Real Estate Agent Fees Are Paid at Closing
- Negotiate the commission – In the listing agreement, you agree on the total commission and how it's split.
- Sign the purchase contract – The contract may specify who pays the buyer's agent fee.
- Close the sale – At closing, the title company or escrow officer deducts the commission from the seller's proceeds.
- Distribute funds – The commission is paid to the listing broker and buyer's broker, who then split with their agents.
This process is standard in Danville, CA. If you have questions, we're happy to explain the details.
Can a Seller Refuse to Pay the Buyer's Agent?
Yes, a seller can refuse to pay the buyer's agent. Under the new rules, sellers are not obligated to offer a buyer's agent commission. However, refusing might make your home less attractive to buyers who need their agent to be paid. In a competitive market like Danville, many sellers still offer to pay to get more offers. It's a strategic decision, not a requirement.
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Frequently asked questions
What commission do most realtors make?
Most realtors earn a commission that is a percentage of the home's sale price, typically 5–6% total, split between the listing and buyer's agents. The agent's actual take-home is less after splitting with their broker.
Will Keller Williams pay for my real estate license?
Some brokerages like Keller Williams may offer training or reimbursement programs, but it varies by office. It's best to ask directly about their policies.
What is the 80/20 rule for realtors?
The 80/20 rule often refers to the idea that 80% of business comes from 20% of clients. In real estate, it's a reminder to focus on your best clients and referrals.
Do you pay a realtor before buying a house?
Typically, you don't pay your realtor upfront. The commission is paid at closing, usually by the seller, but under new rules, you may need to agree to pay your agent if the seller doesn't.
How much does a realtor make off of a $300,000 home?
On a $300,000 home, a 6% commission would be $18,000, split between the listing and buyer's agents. Each agent might earn $9,000, but after broker splits, their take-home is less.
Also asked as
- Who pays realtor fees?
- Who pays the real estate commission?
- Who pays buyer's agent fees?