You may have seen the headlines: real estate commissions have come under the spotlight due to recent lawsuits and a proposed settlement involving the National Association of Realtors (NAR). These developments have sparked questions—particularly in how agents are paid and how that payment is structured in both buyer and seller transactions.
As the market evolves, so should your understanding of what you’re paying for—and how to protect your interests. Whether you’re planning to buy or sell in Knoxville this year, this guide will walk you through the landscape of commissions and what it means for you.
From the Seller’s Side
When you list your home, you’ll agree to a total commission with your listing agent—often 5–6% of the sale price—paid at closing. That amount is typically split between the listing agent and the buyer’s agent who brings a ready, willing, and able buyer.
Example:
You list your home in Farragut for $600,000 and agree to a 6% commission. That’s $36,000.
- Your listing agent might keep $18,000 (3%), which compensates them for their time, expertise, and the upfront costs they incur to market your home effectively. This includes professional photography and videography, online advertising and print materials, open houses and showings, staging consultations, MLS fees, signage, marketing platforms, and managing inquiries, offers, negotiations, inspections, and contract-to-close coordination.
- The remaining $18,000 (3%) is typically offered as compensation to a buyer’s agent who brings a qualified buyer to the transaction.
Important: That commission split isn’t always 50/50—and it doesn’t have to be. Some listing agents may offer as little as 1% to the buyer’s agent while keeping 5% themselves. Unless you ask, you might never know. Be sure to have a direct conversation with your agent about how the commission will be split. Transparency matters and impacts your success.
Should You Offer Buyer Agent Compensation?
With changes in commission practices, sellers now have more flexibility—including the option not to offer any compensation to a buyer’s agent. This is entirely within your rights and could improve your net proceeds.
However, we typically advise sellers to budget to offer buyer agent compensation if your goal is to sell with maximum efficiency and reduced risk. Here’s why:
- Reduced Buyer Pool: Many buyers still have agents, and those buyers may avoid pursuing homes that don’t offer compensation—especially if the buyer cannot afford to pay their agent directly.
- Higher Transaction Risk: Unrepresented buyers may lack the knowledge to navigate negotiations, contracts, timelines, and legal obligations. This can lead to mistakes or, worse, failed closings.
What Happens if an Unrepresented Buyer Makes a Great Offer?
Let’s say an unrepresented buyer submits a strong offer with favorable terms. As the seller, you’re free to accept it—but you should first discuss this scenario with your listing agent.
Even though your agent does not represent the buyer, they’ll now shoulder extra responsibilities:
- Coordinating all paperwork
- Answering questions the buyer might normally ask their own agent
- Keeping the transaction on schedule
Because of the additional workload, some listing agents charge a higher commission in this situation. For example:
- Standard scenario: 2.5% listing agent commission + 2.5% buyer agent commission
- Unrepresented buyer scenario: 3.5% listing agent commission (with no buyer agent)
Even at 3.5%, this can be a win for sellers—it’s still less than 5–6% total, and you gain some assurance that the transaction is being managed professionally, even without a buyer’s agent involved.
The Takeaway for Sellers
With increased transparency around commission structures, sellers now have more visibility into compensation decisions. At Sold With Sinclair, we believe it’s still prudent to budget for buyer agent compensation—especially if your goal is to:
- Sell your home quickly
- Attract the widest pool of buyers
- Reduce the risk of complications from unrepresented buyers
That said, if your primary objective is to maximize your bottom line, you do have the option of shifting some or all of the buyer agent cost back to the buyer, depending on what the market will bear. Just remember: fewer incentives for buyers and their agents may mean a longer time on market, or fewer offers.
We’ll help you weigh these trade-offs carefully and design a strategy that supports your priorities, whether that’s speed, simplicity, or maximizing net proceeds.
From the Buyer’s Side
This is where we’re seeing the biggest shift in 2025. In the past, sellers typically covered the buyer agent’s commission. Going forward, buyers will be required to sign a Buyer Representation Agreement, which outlines the services provided by their agent and how that agent will be compensated—usually a percentage of the purchase price, such as 2.5% or 3%.
Who pays that fee? That depends—and it's now a negotiable part of your offer.
· Scenario 1: Seller Pays the Buyer’s Agent
· You sign a 2.5% buyer agreement with your agent.
· You find a $500,000 home and submit an offer asking the seller to pay the $12,500 buyer agent fee.
· The seller agrees.
· You pay nothing extra.
· Scenario 2: Seller Offers No Buyer Agent Compensation
· You still owe your agent 2.5%.
· You submit the same offer, but the seller declines to cover the fee.
· You may now be responsible for some or all of your agent’s commission.
· This may affect how much home you can afford.
This doesn’t mean buyers are suddenly paying more out of pocket. Often, the cost can be worked into the transaction—just like negotiating closing costs or repairs. But it is a new dynamic that buyers need to plan for, especially in competitive offer situations, where every term—from price to contingencies to agent fees—can become a key part of the negotiation.
The Takeaway for Buyers
In today’s market, having a skilled, knowledgeable buyer’s agent is more important than ever—but it’s also important to plan ahead:
- Understand your agent agreement
- Ask how compensation will be handled
- Be ready to negotiate it as part of the offer
- In competitive situations, expect this to be a point of focus
At Sold With Sinclair, we guide our buyers through every step with clarity and strategy—making sure you're empowered to make informed decisions and competitive offers.
Frequently Asked Questions
Q: Who pays the commission?
A: Traditionally the seller, but now buyer agent compensation may be paid by the buyer or negotiated into the offer.
Q: Do I have to pay my agent out of pocket as a buyer?
A: Not necessarily. It depends on the seller’s willingness to cover it, and how the offer is negotiated.
Q: Is commission negotiable?
A: Yes—for both the total commission and the way it's split between agents.
Q: Will these changes affect how homes are sold?
A: Not as dramatically as some headlines have implied. However, buyers and sellers will need to plan more strategically when it comes to offers and representation.
