Who pays the buyer agent now? The three ways it works after the NAR settlement

If you bought a house before 2024, you probably never thought about who paid your agent. The listing agent advertised a co-op commission, your agent collected it at closing, and the whole arrangement happened somewhere off to the side of your transaction.

That is over. Here is what replaced it.

The old mechanic

A seller signed a listing agreement covering the total commission. The listing broker then advertised a share of it to any broker who brought a buyer. Buyers rarely saw the number and almost never negotiated it, because it was settled before they arrived.

The money still came out of the sale proceeds either way. It just never looked like the buyer’s decision.

What the NAR settlement changed

Two things, and they are separate.

Compensation is no longer advertised in the MLS. The listing side can still offer to pay a buyer’s broker, but that offer cannot be published as an MLS field.

A buyer must sign a written representation agreement before touring homes. That agreement states what the buyer’s agent will be paid. It is a number the buyer sees, and it is negotiated between the buyer and their own agent, not inherited from the listing.

So who actually pays now?

Any of three ways, and it is a term of the deal rather than a rule.

The seller pays it. Still common. The seller or listing broker agrees to compensate the buyer’s broker, negotiated in the purchase contract instead of advertised up front.

The buyer pays it directly. The buyer pays their agent out of pocket at closing, under the representation agreement.

The buyer asks for it as a seller credit. The offer includes a credit toward the buyer’s closing costs, which the buyer then applies to their agent’s fee.

The third one is where transactions get stuck, because a credit has to survive the lender. Loan programs cap how much credit a transaction can carry, and the cap depends on the program and the down payment. A credit that exceeds it gets trimmed. Confirm the number with your lender before you write the offer, not after you are in escrow.

What this means if you are buying

Ask three questions before signing anything.

What is my agent’s compensation, as a number, and what happens if the seller offers less than that?
If the seller pays nothing, what do I owe at closing?
Has my lender confirmed how much seller credit my loan actually allows?

Question one is the one that matters. If a seller offers less than what you agreed to pay your agent, the difference is yours unless the agreement says otherwise. Find out which before you are under contract on a house you want.

What this means if you are selling

You are not required to offer buyer-broker compensation. You are also not prohibited from it. It is a negotiating lever now, the same as a closing credit or a repair.

Offering it can widen your buyer pool, since some buyers cannot cover the fee out of pocket on top of a down payment. Declining it keeps more proceeds. It is a math question about your specific price point and buyer profile, and it is worth running before the listing goes live rather than in response to the first offer.

The short version

Nobody removed the cost. They moved it out of the MLS and onto the negotiating table, where it is now visible and explicitly yours to argue about.

That is better for anyone willing to ask. It is worse for anyone who assumes the old default still applies.

This article is general information about how buyer-broker compensation works in California following the NAR settlement. It is not legal, tax, or lending advice, and it is not an offer of representation. Terms vary by transaction, lender, and loan program. Confirm specifics with your lender, and consult an attorney for legal questions.

About the author

Michael Torres is a licensed California real estate broker, DRE #01469202, serving Long Beach, Cypress, Lakewood, Los Alamitos, Seal Beach and Rossmoor. To see what this looks like on a specific transaction, the rebate estimator is the fastest place to start.