Q&A / Buying a home
Who pays the buyer’s agent?
Short answer
Before your first showing in Indiana, you sign a written agreement that spells out how your agent gets paid. The seller can still cover that fee, and in Hamilton County most sellers still do, but it’s now negotiated deal by deal instead of being automatic. Whatever the seller doesn’t cover, you pay at closing.
How did it used to work?
For decades, the seller paid one commission to the listing agent, who split it with the buyer’s agent. The split was posted right in the listing. Most buyers never thought about it, because it never came out of their pocket directly.
What changed?
Two things happened in 2024. On July 1, Indiana started requiring a written agreement between buyers and their agent. It has to have an end date, and it has to say that the agent’s pay is fully negotiable and not set by law.
Then in August, a national settlement took buyer-agent pay offers out of home listings. That number is now worked out in conversation instead of posted for everyone to see.
When do I sign the agreement?
Before your first showing. That surprises a lot of buyers, but it’s a good thing. You know exactly how your agent gets paid before you’ve seen a single house, not when you’re sitting at the closing table.
What’s in the agreement?
It covers how your agent gets paid (a percentage or a flat fee), how long the agreement lasts, and what happens if the seller pays some or all of it. Your agent can’t collect more than the agreement says, no matter who’s paying. You get a copy.
So who actually pays?
Usually one of three ways:
- The seller agrees to pay your agent’s fee as part of the deal. In Hamilton County, this is still what happens most of the time.
- You ask the seller to cover it in your offer, the same way you might ask for help with closing costs.
- You pay whatever the seller doesn’t cover at closing.
Say your agreement is 3% on a $400,000 home. That’s $12,000. In most deals here, the seller covers it and you pay nothing extra. If the seller only agrees to $9,000, you bring the other $3,000 to closing.
Fees are negotiable, and on higher-priced homes the percentage is often lower.
Can I roll it into my loan?
It depends on your loan type. Ask your lender early so it isn’t a surprise.
What if I’m the seller?
You’re not required to pay the buyer’s agent. But offering to can bring in more buyers, especially buyers who are tight on cash after their down payment. Think of it as a pricing decision, not an obligation.
What I tell my clients
We talk about my pay before we see the first house, and it goes in writing. Nobody should learn how their agent gets paid at the closing table.
Words you’ll hear
- Buyer agreement
- The written contract between you and your agent that says what they’ll do for you, how long it lasts and how they get paid.
- Commission
- The fee an agent earns when a sale closes, usually a percentage of the price.
- Seller concession
- Money the seller agrees to put toward your costs, like your agent’s fee or your closing costs.
Have a question that isn’t here?
Send it to me. I’ll give you a straight answer, and if other people are wondering the same thing, it might become the next page in this Q&A.
This is general information to help you understand the process. It isn’t legal or financial advice. Your contract, your lender and your agent have the final word on your situation.