If you've been reading headlines about changes to real estate commissions, you might be wondering:
"Wait... am I supposed to pay my Realtor now?"
The answer is:
Maybe.
But probably not in the way you think.
Let's break down what changed and what it means for buyers and sellers today.
What Changed?
Beginning in August 2024, new rules changed how buyer-agent compensation is handled.
The biggest change is that buyers now sign a Buyer Representation Agreement before touring homes.
That agreement outlines the relationship between the buyer and their Realtor, including how the Realtor will be compensated.
The goal was greater transparency.
And honestly? Transparency is a good thing.
Everyone should know exactly who is being paid, how much, and where that money is coming from.
The Biggest Misconception
One of the most common things I hear is:
"So now buyers have to pay their Realtor out of pocket?"
Not necessarily.
The settlement changed how compensation is negotiated and disclosed.
It did not eliminate the ability for sellers to contribute toward a buyer's agent compensation.
In fact, most sellers still do.
How Buyer Agents Get Paid Today
Generally speaking, there are three possibilities.
Option 1: Seller Contributes
The seller agrees, as part of the negotiation, to contribute toward the buyer's agent compensation.
This remains common in many transactions.
Option 2: Buyer Pays
The buyer pays the agreed-upon compensation according to their Buyer Representation Agreement.
Option 3: A Combination of Both
Sometimes a seller contributes a portion and the buyer covers the remainder.
Every transaction is different.
Everything is negotiable.
What Does This Mean for Buyers?
The biggest takeaway is simple:
Have the conversation early.
Before you start touring homes, understand:
- How your Realtor is compensated
- Whether seller concessions may be available
- What costs you should budget for
- What happens if a seller doesn't contribute
None of this should be a surprise halfway through a transaction.
A good Realtor will explain all of this before you ever step foot in a house.
What Does This Mean for Sellers?
For sellers, very little has changed in practice.
You're still trying to attract the strongest pool of buyers possible.
And in most situations, offering compensation to a buyer's agent may help accomplish that goal.
In other situations, market conditions may allow a different approach.
The right strategy depends on the property, the market, and the goals of the seller.
My Take
After all the headlines, the reality has been much less dramatic than many people expected.
Homes are still selling.
Buyers are still buying.
Agents are still negotiating.
The biggest difference is that compensation conversations now happen earlier and with greater transparency.
That's a good thing for everyone involved.
Final Thoughts
Real estate has always been negotiable.
That hasn't changed.
What's changed is that buyers and sellers now have more visibility into how representation works and how professionals are compensated.
If you're planning to buy or sell and have questions about the new rules, don't be afraid to ask. And if you want a bit more explanation, watch this video I made.
The best real estate decisions are informed decisions.
Wendy Newman
Realtor®
Serving San Francisco, Grass Valley, Nevada City, and all of Nevada County
