Why It Benefits Sellers to Pay Buyer Agent Commissions

The Post-NAR Settlement Landscape

The 2024 NAR settlement fundamentally changed how real estate commissions are communicated in the United States. Prior to the settlement, sellers routinely offered buyer agent compensation through the MLS, and the practice was so standard that most participants did not think twice about it. Now, buyer agent compensation is no longer displayed on the MLS, and buyers are required to sign written agreements with their agents before touring homes.

These changes have created new questions for sellers: Should I still offer to compensate the buyer's agent? What happens if I don't? The short answer is that while it is now optional, offering buyer agent compensation remains one of the smartest strategic decisions a seller can make. Here is why.

How Buyer Agent Compensation Works Now

Under the new rules, buyer agent compensation is no longer advertised on MLS listings. However, sellers can still offer it — the communication just happens through different channels. Listing agents can share compensation offers directly with buyer agents, through broker-to-broker communication, on the listing agent's website, or during property showings. The mechanism has changed, but the ability to offer compensation has not.

On the buyer side, agents are now required to have written agreements with their clients before showing homes. These agreements specify the buyer agent's compensation. If the seller offers compensation, it can satisfy or offset the buyer's obligation. If the seller does not offer compensation, the buyer must pay their agent directly — an added cost that many buyers are not prepared for.

Why Offering Compensation Attracts More Buyers

The fundamental economics of home selling have not changed: the more buyers who see and compete for your home, the higher the final sale price is likely to be. Offering buyer agent compensation removes a financial barrier for buyers and ensures that buyer agents are incentivized to show your property.

Consider this scenario. Two similar homes are on the market in the same neighborhood. Home A offers 2.5% buyer agent compensation. Home B offers none. A buyer working with an agent now faces a choice: view Home A where the seller covers the agent fee, or view Home B where the buyer must come up with an additional $12,500 to $25,000 to pay their agent. For many buyers — particularly first-time buyers stretching to make a down payment — this cost differential makes Home B effectively unaffordable.

The Impact on Sale Price and Days on Market

Sellers who choose not to offer buyer agent compensation may initially feel they are saving money. In practice, the opposite often occurs. Fewer showings lead to less competition, which leads to weaker offers. Homes that sit on the market longer develop a stigma — buyers and agents begin to wonder what is wrong with the property. The eventual sale price often ends up lower than it would have been with compensation offered from the start.

Early data since the settlement suggests that homes offering buyer agent compensation sell faster and at higher prices relative to asking price compared to those that do not. The "savings" from not offering compensation are frequently more than offset by the lower sale price and extended carrying costs of a longer listing period.

Strategic Pricing Considerations

The smartest approach is to factor buyer agent compensation into your overall pricing strategy. Think of it not as an added cost but as a marketing expense that directly drives buyer traffic. A listing priced at $500,000 with 2.5% buyer agent compensation effectively costs the seller the same as a listing priced at $487,500 without it — but the higher-priced listing with compensation will attract significantly more buyer interest.

Your listing agent can help you model different scenarios to find the pricing and compensation structure that maximizes your net proceeds. The key principle is that maximizing buyer exposure almost always results in a better outcome than minimizing commission expense.

The Bottom Line for Sellers

The NAR settlement gave sellers more choice around buyer agent compensation, but choice does not mean elimination is the right strategy. The sellers who are achieving the best outcomes in the current market are those who view buyer agent compensation as a strategic tool — one that attracts the widest possible buyer pool, generates competitive offers, and ultimately maximizes net sale price.

If you are preparing to sell your home, have a detailed conversation with your listing agent about compensation strategy. Understand the local norms in your market, evaluate the competitive landscape, and make a decision based on maximizing your outcome — not on avoiding a line item. In most cases, the math strongly favors offering compensation.