Real Estate 101: Who Pays the Realtor Fees?

Navigating Costs When Buying or Selling a Home

As you embark on the journey of buying or selling a home, it’s essential to understand not just the property value but also the associated fees. With recent real estate law updates, realtor fees may work differently than before. These costs can be confusing, especially for first-time buyers or sellers.

So, who is responsible for paying realtor commissions now? The buyer, the seller, or both?
In this guide, we’ll break down how real estate commissions work under the latest legal changes so you can be fully informed before your next transaction.

Understanding Realtor Fees

What Are Realtor Fees and How Do They Work?

Realtor fees are payments made to real estate agents for their professional services in facilitating a home sale. Traditionally, these fees have been structured as a commission, a percentage of the final sale price, paid at closing.

New Industry Standards

Under updated real estate laws, there’s greater flexibility in commission structures. Buyers and sellers may now negotiate commissions more freely, leading to potential cost savings and changes in who pays what in a transaction.

Some agents now offer:

• Traditional commission-based fees (a percentage of the sale price).
• Flat-fee brokerage services, which can be a lower-cost option for sellers.
• Buyers covering their agent’s commission, a practice becoming more common in certain markets.

These changes emphasize transparency and negotiation, ensuring clients have a clearer understanding of what they’re paying for.

Types of Realtor Fees

Commission-Based vs. Flat Fee Models

Realtor fees can be structured in different ways, depending on the agreement between agents and their clients:

1. Commission-Based Fees (Percentage of Sale Price)

• This has been the most common structure, typically shared between the buyer’s and seller’s agents.
• Commissions used to be around 6%, but under new market trends and regulations, they range between 4%-5% and are negotiable.

2. Flat-Fee Real Estate Services

• Some agents now offer a fixed-rate listing fee, which can be more affordable for sellers.
• Flat-fee listings may include limited services, so it’s important to clarify what’s included before choosing this option.

What’s Changing?

With new regulations, buyers may now be responsible for paying their own agent’s commission, a shift from past practices where sellers typically covered both agents’ fees. This new approach allows for more negotiation and choice in service levels.

 

Who Pays Realtor Fees?

Seller’s Responsibilities

In most transactions, sellers still pay the majority of realtor fees, covering:

✔ Listing Agent Commission – Payment to the seller’s agent for marketing, listing, and negotiating the sale.

✔ Buyer’s Agent Commission – Traditionally, sellers paid this too, but new laws allow negotiation, meaning buyers may now be responsible for paying their own agent.

Buyer’s Responsibilities

Under updated regulations, buyers may now need to:

✔ Negotiate with their agent to determine a fair commission.

✔ Pay their agent’s fee out-of-pocket instead of having it covered by the seller.

✔ Explore agent agreements that offer flexibility in fees and services.

How New Laws Impact Transactions

These changes increase transparency in real estate fees and offer more negotiation power to both buyers and sellers. However, it’s crucial to discuss who will pay what with your agent before entering a contract.

Negotiating Realtor Fees

How to Reduce Costs Under New Real Estate Laws

Since real estate commissions are now more flexible, here’s how you can negotiate a fair deal:
✔ Buyers – Ask your agent about a negotiated commission or flat-fee structure to manage costs.

✔ Sellers – Consider flat-fee brokerage services or negotiate a lower commission rate with your agent.

✔ Both Parties – Understand all terms before signing to ensure a fair and transparent transaction.

At Realty Empire NJ, we tailor our commission structures to match our clients’ unique needs and budget expectations.

Closing Costs & Realtor Fees

Breaking Down Final Expenses at Closing

Realtor fees are just one part of the closing costs in a home transaction. Buyers and sellers should also budget for:

✔ Lender Fees – Loan origination, application, and credit check fees.

✔ Title Insurance & Escrow Fees – Protects ownership rights and covers transaction handling.

✔ Property Taxes & Transfer Fees – Costs vary by location and sale price.

✔ Home Inspections & Appraisals – Ensuring the home’s value and condition.

🔹 At Realty Empire NJ, we guide our clients through these costs to prevent last-minute surprises at closing.

How Realty Empire NJ Can Help

Expert Guidance Through Every Step of Your Home Sale or Purchase

At Realty Empire NJ, we stay ahead of new real estate regulations to ensure our clients receive top-tier service while navigating updated laws.


🏡 For Sellers:

• We offer flexible commission structures to maximize your profits.
  
• Our marketing strategies ensure maximum exposure for your home.
  
• We handle negotiations to get you the best deal.


🏡 For Buyers:

• We provide clear guidance on potential commission costs.
  
• Our agents negotiate on your behalf to secure the best price.
  
• We ensure a smooth, stress-free home-buying experience.
  

📞 Call us today at 973-510-2260 or fill out our contact form to get started!Frequently Asked Questions

Frequently Asked Questions

Can realtor fees be negotiated?

Yes! With the new industry changes, commission rates are more flexible than ever before. At Realty Empire NJ, we discuss options tailored to your financial goals.

Are realtor fees tax-deductible?

Not directly, but they may reduce capital gains tax when selling a property. We recommend consulting a tax professional for specific guidance.

Who pays the buyer’s agent commission now?

This varies by transaction, but under updated real estate laws, buyers may now be responsible for paying their own agent, making it essential to negotiate fair service agreements upfront.