The Three Ways a Buyer’s Agent Gets Paid
1. Paid by the Buyer
(Buyer Broker Agreement)
This is the foundation of representation.
Before viewing homes, buyers sign a buyer broker agreement. This agreement outlines:
The services your agent will provide
The compensation the buyer agrees to pay
This creates a clear, professional relationship and defines expectations on both sides.
2. Paid by the Seller Through Concessions
In many transactions, the buyer negotiates for the seller to contribute toward their costs.
These funds can be used to cover:
Closing costs
Loan expenses
Buyer agent compensation
This is done through seller concessions written into the contract.
It is important to understand:
The seller is not directly paying the agent
The seller is contributing funds to the buyer
The buyer uses those funds to meet their obligations
3. Combination of Buyer and Seller Contribution
In some cases, the seller may not cover the full amount.
When that happens:
The seller contributes a portion through concessions
The buyer pays the remaining balance
This is common in:
Competitive markets
Situations with limited concessions
Offers where terms are more important than concessions
What Buyers Need to Know
Compensation is not set by the seller or listing agent
It is negotiated between the buyer and their agent
The structure of payment is determined during the offer process
Every transaction can look a little different depending on the market, the property, and the negotiation.
Why This Matters
Understanding how your agent is paid allows you to:
Plan your finances more accurately
Structure stronger offers
Move through the process with confidence
It also ensures there are no surprises at closing.
The Bottom Line
The buyer is responsible for their agent’s compensation, but the source of funds can come from:
The buyer
The seller (through concessions)
Or a combination of both
The key is having a clear strategy from the beginning.
If you are planning to buy and want to understand how this applies to your situation, I would be glad to walk you through your options and help you structure your purchase properly.
Gwen Fowler
Gwen Fowler Real Estate, Inc.
864-710-4518
www.CoolMountainEscapes.com
Your next chapter starts here.
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