How Do Buyers’ Agents Get Paid?

Obtaining Representation in Your Home Purchase

Written by Deb Staley.
Lenexa, Kansas, USA
Original Content--NOT AI generated

A home purchase will likely be the biggest purchase you will ever make. You want to get it right! To make sure that happens, you’ll want representation from a Realtor^®--preferably one who works at it full time, has experience in your exact area of purchase, and has shown interest in keeping up with the business of real estate by earning relevant certifications and designations. Sellers are usually represented by a Realtor--referred to as the Listing Agent. (The name on the yard sign.) Listing Agents have a fiduciary duty to their sellers and represent the sellers’ best interests--not yours as a buyer.

So, how do I pay my Realtor for this buyer representation? Agents are not paid directly from buyers and sellers. Real estate compensation is only paid to brokers, who then pay their agents. This happens at the very end of the sales process. A buyer’s agent will ask for that compensation to be paid by the seller, as we have always done. The rule change in 2024 is that the compensation is a line item on the sales contract.

Most brokers charge an extra fee, referred to as a BAC (broker administrative compensation). If your agent’s broker charges this, it is added to your closing costs; your agent is not paid up front by you. It is usually $300 to $800. Deb Staley’s broker only charges $295.

If you decide to be represented by Deb for your home purchase, you will sign an Exclusive Buyer Agency Contract. This is a 6‑page form provided by the Kansas City Regional Association of Realtors. It states the location where you are searching, a time frame, and the (negotiable) compensation that Deb charges her buyers. This compensation may or may not be covered by the seller of the home you purchase. Note: a real estate industry rule change that went into effect on August 17, 2024 requires that this buyer agency contract be signed before viewing any homes.

The most important thing to know about real estate compensation is that they are ALWAYS negotiable, both on the seller side and on the buyer side. (That includes the “BAC” as well.)

Learn about the home buying process