What Services Are Covered by the Realtor’s Commission Fee?
September 23, 2025
7 minutes
When you hear that a Realtor earns a commission, you might wonder what you’re paying for. Is it just opening doors and writing up paperwork? For first-time buyers, this is a big question. With recent changes in how commissions are handled, it’s even more important to know exactly what services fall under that fee.
Let’s break it down.
The Core Services Your Commission Fee Covers
When you hire a buyer’s agent, the commission pays for much more than property tours. A good agent acts as your fiduciary, meaning they must put your interests first. That legal duty is baked into the service.
Fiduciary duties included in your fee:
- Loyalty: Protecting your budget and goals over their own commission.
- Confidentiality: Keeping your financial details private in negotiations.
- Disclosure: Flagging red flags, structural issues, or overpricing.
- Obedience: Following your lawful instructions.
- Reasonable care and diligence: Using skills to negotiate, prepare offers, and guide you.
- Accounting: Protecting your funds, like earnest money deposits.
Practical services your agent provides:
- Financial prep: Connecting you with lenders and securing pre-approval.
- Market education: Explaining local trends, property values, and comparisons.
- Property search: Matching homes to your needs and budget.
- Offer and negotiation: Writing offers, handling counteroffers, and advocating for terms.
- Inspections and repairs: Attending inspections, explaining findings, and negotiating concessions.
- Closing support: Coordinating paperwork, money transfers, and final details.
- Post-sale help: Referrals to contractors, decorators, or local service providers.
Takeaway: Your commission fee pays for advocacy, expertise, and protection-not just access to homes.
How Commissions Work After the NAR Settlement
The National Association of Realtors settlement changed how commissions are structured. Before, sellers often covered both their agent’s and the buyer’s agent’s fees. Now, you need to negotiate your agent’s fee directly.
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What changed:
- Written agreements required: You must sign a buyer-broker agreement before touring homes.
- MLS disclosure ban: Seller’s agents can’t advertise buyer-agent compensation in the MLS.
- Compensation is negotiable: No fixed rates by law.
Typical costs:
- Buyer-agent fees: 2% to 3% of the home’s price. On a $400,000 home, that’s $8,000 to $12,000.
- Closing costs: 2% to 5% of the loan amount (separate from commissions).
How to offset the fee:
- Negotiate for the seller to cover your agent’s fee.
- Request concessions like title insurance, lender fees, or repair credits.
- Explore low-commission or flat-fee agents.
- Combine buy and sell services with one agent for possible discounts.
Takeaway: The fee is flexible, but you must plan for it and negotiate smartly.
What to Know Before You Sign a Buyer-Broker Agreement
Your agent’s commission fee and duties are locked in by a buyer-broker agreement. This is a binding contract.
What the agreement covers:
- Obligations: Defines what your agent does and for how long.
- Compensation: Commission structure and amount.
- Limitations: Most terms are standard; only rates are negotiable.
- Risks: Signing more than one agreement could expose you to multiple fees.
- Cancellation terms: Understand penalties and holdover clauses that extend liability after cancellation.
Protecting yourself:
- Read the contract carefully before signing.
- Address concerns with the agent’s broker if issues arise.
- File a complaint with your state’s real estate commission or local NAR if duties are breached.
- Consult a real estate attorney for serious disputes.
Takeaway: Never sign until you fully understand what services and fees are included.
Why This Matters for First-Time Buyers
If you’re buying your first home, every dollar matters. Knowing what your commission fee covers helps you budget better and demand the service you deserve.
Here’s a simple action plan:
- Get mortgage pre-approval before hiring an agent.
- Interview multiple agents to compare services and fees.
- Negotiate the commission upfront and factor it into your budget.
- Sign only after reviewing the buyer-broker agreement in detail.
- Be ready to walk away from agents who don’t uphold fiduciary duties.
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Final Thoughts
A Realtor’s commission fee is more than a line item at closing. It’s the price of having a professional protect your interests through one of the biggest financial decisions you’ll make. With the new rules, the responsibility is on you to negotiate, plan, and choose wisely.
The question you should ask yourself now is: Which services do you value most, and how much are you prepared to pay for the peace of mind they bring?
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As a great communicator with excellent negotiation skills, I focus more on establishing unbreakable ties between my clients, as opposed to just helping them achieve their real estate dreams. As a representative of both buyers and sellers, I understand how to lead a transaction process to ensure that the needs of both are met. My track record speaks for itself. Since I ventured into the industry in 2013 as a realtor, I have not only helped many buyers land perfect homes, but I have also assisted tons of owners and investors build wealth.