Real Estate Sellers Should Most Definitely Pay A Buyer’s Agent’s Commission, If they’re smart.

Much of the confusion surrounding buyer representation in real estate today can be traced back to how agency relationships historically evolved. For many decades, the real estate brokerage model in the United States was built around seller representation. The listing broker represented the seller, and any agent who helped bring a buyer to the property was typically considered a sub-agent of the listing brokerage. 

In practice, this meant that even if another agent introduced the buyer to the home, that agent still owed fiduciary duties to the seller, not the buyer. Their role was simply to help facilitate the transaction by bringing a potential purchaser to the property.

As the industry matured and cooperation between different brokerages increased through Multiple Listing Services (MLS), the terminology began to change, but the process was essentially the same. The phrase “buyer’s agent” was introduced in the 1990s to reflect situations where an agent specifically represented the interests of the buyer instead of the seller. While this shift eventually led to the formal recognition of buyer representation in many markets, the transition in terminology also created confusion among consumers about how agency relationships actually function. At its core, however, the mechanics of a transaction remain fairly simple: one brokerage markets the property for the seller, and other agents may introduce potential buyers to that listing. 

As brokerages grew and agents from different companies began cooperating more regularly, the industry introduced the term “buyer’s agent.” The new terminology created the incorrect impression, a confusion if you will, that buyers suddenly had their own dedicated representation in the transaction. In reality, the core process hadn’t changed much at all, one agent had the listing, and another agent simply knew someone who wanted to purchase the property. Does the agent for the buyer have rules and duties they have to follow to represent that buyer, certainly, but frankly from a sellers perspective, they don’t care about that, they’re just happy someone has a buyer and as such the seller should be compensating that person. (Often times, more than their own agent). Busy, reputable agents who have buyers are often spending thousands of dollars a month on marketing to procure those prospective buyers that they get. So sellers would find reasonable they should compensate that agent for their investment in not only money, but time, and knowhow. 

The best and easiest example of this now is with regional and national home builders. They are more than happy to pay an agent who brings them a buyer, because it only makes sense. They have the product and other people (most specifically other brokers) know people who want to buy/build.

Conclusion:

The idea that buyers must pay their own agents misses the bigger picture. Historically, sellers have always been happy to pay the person who brings them a “ready, willing, and able” buyer. Whether it was a formal commission or a simple “thank you” for the lead a century ago, the logic hasn’t changed. Sellers want a sale, and they compensate the person who delivers the buyer who crosses the finish line. Period.