Seller usually pays agent
Q: I’m looking to buy my first house in the spring. Is commission always paid by the seller, or should I be setting extra money aside? A: In a typical scenario, where the buyer and the seller are each represented by their own real-estate professional, commission for both representatives is paid by the seller.
A separate agreement between the two brokerages, called a Confirmation of Co-operation and Representation (CCR), will be prepared and it details how the commission will be split. You will likely be shown the CCR and asked to sign an acknowledgement related to it.
As a buyer working with a realestate professional, you may have signed a Buyer Representation Agreement (BRA), which specifies the amount of commission your brokerage is entitled to and how it will be collected and paid. If the amount of commission in the BRA is greater than that provided for in the CCR, you may be on the hook for the difference.
In a situation where a homeowner is selling their property without the help of a real-estate professional, it’s up to the individual seller whether they will agree to pay the buyer representative’s commission. If they won’t, and you proceed with the transaction, you will have to pay the commission in accordance with the terms of the BRA.
Depending on the seller, your representative may be able to negotiate areduction in sale price to offset the added expense of the commission. But, to be safe, if you’re targeting a property that’s for sale by the owner, you may want to build in the added expense to your closing costs.