Understanding the Commission Section of the AAR Buyer-Broker Agreement to Show Property

(and why the buyer almost never pays a commission)

Lines 14-17: 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.

Text excerpt from a form explaining Broker Compensation, defining it as when a broker represents a buyer in a property purchase, with details about filling in the compensation amount or rate.

Lines 20–22: 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 nearly 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 home buyer to pay the broker fee.

Highlighted text stating that the buyer authorizes the broker to accept compensation from the seller or seller's broker, which shall be credited against Broker Compensation, and that the broker will not receive more than this amount.