Who pays the commission? 

The Seller Does

The seller generally signs a listing agreement with the listing agent specifying that a certain fee is to be paid by the seller from the proceeds at closing, and most often the agreement has provisions for splitting that fee with the agent/firm who brings the buyer.


The Buyer Does

Occasionally the Buyer can pay the agent a commission as set out in the written Buyer Agency agreement. If this is the case it would be inappropriate for the agent to also take any portion of the fee as paid by the seller — the agent should work to get the price of the home reduced to reflect this.


Indirectly, the Buyer Does

Even though the seller pays the commission out of his proceeds, it can be reasoned that the buyer is paying the commission as part of the overall purchase price. This assumes that the buyer could have purchased the home for less had it not been listed. Experience has shown that most For Sale By Owners (FSBOs) do not reduce the price of the home by an amount equal to the commission. They sell the home for the going price of the neighborhood. But it is true that the Buyer is the only person who brings money to the real estate transaction.