Who Pays? The 2026 Commission Guide

The real estate market in the United States has undergone a significant transformation over the last two years, culminating in the environment we see today in January 2026. The most recent annual report released by the National Association of Realtors on January 20 highlights that the industry has largely adapted to the operational changes mandated by the landmark Sitzer-Burnett settlement. For decades, the standard practice involved a seller paying a total commission that was subsequently split between their listing agent and the buyer’s agent, often without the buyer actively participating in that financial decision. Today, that model has been replaced by a decoupled structure where transparency is paramount. The primary goal of these changes was to empower consumers with clarity regarding exactly what services they are paying for and how much those services cost. While the initial transition period in late 2024 and 2025 caused some hesitation and confusion among market participants, the current market reflects a more educated consumer base. However, myths persist, particularly regarding the financial obligations of each party. It is crucial to understand that while the mechanism of payment has changed, the value of professional representation remains constant, and the cost of that representation is now a distinct line item that must be addressed explicitly in every transaction.

One of the most common misconceptions circulating in 2026 is the belief that buyers are now solely and practically required to pay their agents out of pocket in every scenario. While it is true that the legal obligation to pay the buyer’s broker lies with the buyer per their representation agreement, the market reality is far more nuanced and negotiable. The concept of “decoupling” commissions means that the buyer’s agent fee is no longer automatically set by the listing broker on the Multiple Listing Service (MLS). Instead, it is a subject of open negotiation. In many current transactions, buyers are requesting that sellers cover this cost as a concession within the purchase offer. This shift has turned commission into a transaction term similar to closing costs or repair credits. Buyers need to understand that commission rates are not fixed by law or industry standard; they are fully negotiable between the agent and the client. Consequently, a buyer might negotiate a specific fee with their agent, and then subsequently negotiate with a seller to have that fee covered at closing. The “who pays” question is no longer about rigid rules but about the strength of the offer and the motivation of the seller, making the financial dynamic more flexible but also requiring more strategic thinking from all parties involved.

Perhaps the most tangible change for buyers entering the market this week is the absolute requirement of a signed agreement before stepping foot into a property. In previous years, a potential buyer could casually contact an agent and view several homes before ever discussing loyalty or fees, but those days are effectively over. The new regulations strictly mandate that a Buyer Representation Agreement be executed prior to any home tours, whether in-person or virtual. This document is designed to protect the consumer by clearly outlining the scope of services the agent will provide, the duration of the agreement, and, most importantly, the exact amount of compensation the agent expects. This requirement eliminates the ambiguity that previously existed where buyers were often unaware of how their agent was being paid. For consumers, this might feel like a hurdle, effectively formalized “dating” before the “marriage” to a house, but it ensures that the fiduciary relationship is established immediately. These agreements can range from short-term documents specific to a single property tour to long-term exclusive representation contracts. Buyers must read these documents carefully to understand their financial liability if a seller refuses to offer compensation, ensuring there are no surprises at the closing table.

For sellers listing their homes in 2026, the instinct might be to refuse paying any buyer agent fees to maximize net proceeds, but experienced listing agents are advising against this isolationist approach. Offering concessions to cover the buyer’s agent commission remains a powerful marketing strategy, even if it is no longer listed in the traditional commission field on the MLS. The reality of the current economic climate is that many first-time homebuyers are already stretched thin by down payments and closing costs, leaving them with little liquidity to pay their own agent’s fee on top of the purchase price. If a seller staunchly refuses to consider covering these costs, they effectively shrink their pool of potential buyers to only those with significant extra cash reserves. By signaling a willingness to offer concessions for buyer agent compensation, a seller keeps their property accessible to the widest possible audience. This does not mean the seller is “giving away” money; rather, it is often reflected in the final sale price. A buyer might offer a higher purchase price to offset the concession, allowing them to finance the cost of their representation through their mortgage indirectly. In a competitive market, facilitating the transaction for the buyer is often the key to securing the best offer.

As the spring market approaches, the successful navigation of a real estate transaction requires a higher level of engagement and understanding from both buyers and sellers. The dust has settled on the legal battles, and the result is a market that demands explicit communication and negotiation. Buyers must be prepared to have frank financial conversations with their agents upfront, signing contracts that clearly define value and cost. Sellers must move past the idea of “saving” the commission and instead view agent compensation as a tool to facilitate a sale, evaluating offers based on the net bottom line rather than just the purchase price. The role of the real estate professional has evolved from a gatekeeper of information to a strategic advisor essential for managing these complex negotiations. Ultimately, the changes solidified in 2026 have created a more transparent environment where fees are visible, services are defined, and everything is negotiable. Success in this new era belongs to those who understand that while the rules of the game have changed, the fundamental goal of bringing buyers and sellers together remains the same.