Understanding the Commission Section of the Buyer Broker Agreement

Lines 31–36: This is the part of the agreement that causes the most concern for buyers. It says that you agree to pay your agent a specific commission amount — for example, 3%. That wording can sound like you’ll have to write a check to your agent, but it’s rarely how it actually works, because in almost every circumstance the seller will pay your agent’s fee.

Close-up view of a legal or contractual document highlighting the section titled "Broker Compensation" in bold, which states that if a buyer or an entity owned or controlled by the buyer closes escrow on a transaction for the purchase, exchange, or property option, the buyer agrees to compensate the broker as outlined.

Lines 39–43: Here’s where it clarifies things. These lines say that you can authorize your agent to accept payment from the seller or the seller’s broker, which is exactly what happens in almost every transaction. Sellers have a strong incentive to cover that commission because not doing so would severely reduce the odds of selling their home. I believe buyers shouldn’t have to add another fee on top of their down payment and closing costs, and to this day, I have never asked a buyer client to pay the broker fee.

Text from a legal or financial document discussing compensation from seller or Seller's broker, including conditions for acceptance and payment of broker compensation.