The practice of the seller’s broker paying for the commission of the buyer’s broker has worked well for so long for buyers and sellers. It allows a greater economic benefit, higher access and equity for all types of buyers, and enables small brokers to compete with larger brokers. Recently, though, this business practice has come under scrutiny and has been questioned on how it can be beneficial for all parties involved.

Here are some FAQs from the National Association of REALTORS® on why this practice is valuable to consumers:

Why not require buyers to pay commissions directly to their broker instead of the historic practice of listing brokers paying the buyer broker?

Forcing buyers to take on the additional out-of-pocket expense would cause them incredible hardship and would freeze many, particularly first-time and low- and middle-income homebuyers, out from an already competitive market. That could also force homebuyers to forgo professional help during what is likely the most complex and consequential transaction they’ll make in their lifetime.

Is there a “set commission” real estate brokers charge consumers?

No. The market decides commission rates, and commissions are always negotiable. Consumers have the choice of who they want to pay and how they want to pay them. Because of the pro-consumer local MLS broker marketplace model and options like a success fee, there is unprecedented competition among real estate brokers, especially when it comes to the service and commission options available to consumers.

Additional FAQs about real estate commissions and the importance of the ongoing practice can be found at Share this information with your clients and prospective buyers and sellers, offering them more knowledge on the commission agreement.