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A week before closing, the settlement agent sends the seller an estimate of net proceeds. After the mortgage payoff, the largest deductions are not taxes or title charges. They are two commission lines, one to the listing brokerage and one to the buyer's brokerage, and together they can run to five figures. The buyer, meanwhile, is looking at a Closing Disclosure that may or may not have a commission line at all.
So do closing costs include realtor fees? For the seller, in practice, yes: the commission is paid at closing out of the sale proceeds and is listed on the closing documents with everything else. For the buyer, the commission is not a loan cost and is not part of the mortgage. It shows up in the buyer's column only when the buyer agreed to pay their own agent and the seller did not cover it. The 2024 NAR settlement changed how that question gets negotiated, not where the fee appears on the form.
Agent commission is also separate from the question of whether closing costs can be financed. Our guide to rolling closing costs into your mortgage covers that, and the companion piece on who pays closing costs, buyer or seller walks through every other line. This article is only about commission.
Leevli Editorial Team
Closing costs, in the lender's sense, are the charges that come with the loan and the transfer: origination, appraisal, title, recording, taxes and prepaids. Commission is different in kind. It is owed under private contracts between each party and its own brokerage, a listing agreement on the seller's side and a written buyer agreement on the buyer's side, and the settlement agent pays it at closing because that is where the money is.
The Texas Real Estate Commission's current resale contract, TREC No. 20-19, states the principle in its brokerage compensation paragraph: compensation "is not set by law and is fully negotiable," and each party pays its own broker under separate written agreements. The purchase contract can then add contributions across the table: the seller toward the buyer's broker, or the buyer toward the seller's broker.
The Closing Disclosure is the federal form you receive before closing on most mortgage purchases. Regulation Z's official interpretation of 12 CFR 1026.38 says that Section H, labeled "Other," on page 2 includes "all real estate brokerage fees," along with association charges, home warranties and inspection fees paid at closing. Each line sits in a column: borrower-paid, seller-paid or paid by others.
| Where | What you see | What to check |
|---|---|---|
| Page 2, Section H "Other" | The commission paid to each brokerage, in the borrower-paid or seller-paid column | The amounts match your listing agreement, buyer agreement and any contribution in the contract |
| Page 2, Section H, separate lines | Any extra broker charge, such as an administrative fee | It has a description and a named payee |
| Page 3, Summaries of Transactions | Seller-paid closing costs, including commission, inside "Due from Seller at Closing" | The seller's cash figure reflects every deduction |
| Page 3, Cash to Close | Any commission the buyer pays raises the buyer's cash to close | A buyer-paid fee is included, and not financed |
Two details in the official interpretation matter in real closings. The commission line must show the total amount paid to the brokerage as commission, regardless of who holds the earnest money deposit, so a deposit held in a broker's trust account does not shrink the line; see what earnest money means for how that deposit is credited. And any additional charge by a brokerage or agent to the buyer or seller has to be itemized separately, with a description of the service and the person who ultimately receives the payment.
The same regulation lets the settlement agent give the seller a version of the form with the buyer's costs removed. If your settlement agent also prepares a separate settlement statement, find the same commission lines there and make sure the totals match.
On the seller's side, the commission is usually not paid by check from the seller. The settlement agent receives the buyer's funds and the loan proceeds, pays off the seller's loans, pays the brokerages and the other seller costs, and sends the seller what is left. Say you are selling a house in Denver's Lincoln Park. These figures are illustrative:
| Line | Amount |
|---|---|
| Sale price | $500,000 |
| Payoff of existing mortgage | minus $310,000 |
| Commission to listing brokerage (2.5 percent) | minus $12,500 |
| Seller contribution to buyer's brokerage (2.5 percent) | minus $12,500 |
| Other seller closing costs | minus $4,000 |
| Property tax proration credited to buyer | minus $2,500 |
| Net to seller | $158,500 |
In this example, commission is the largest line after the payoff, which is why it decides so much of the exit math. Our guide to whether buying a condo is a good investment counts selling costs as part of the return for that reason. The tax proration line is explained in condo property taxes, and association balances are confirmed by the estoppel certificate.
According to the National Association of Realtors' settlement summary, these practice changes took effect on August 17, 2024:
What did not change matters as much. Commissions remain fully negotiable. Sellers can still offer buyer agent compensation off the MLS, and can advertise buyer concessions, such as help with closing costs, on it. The commission still appears in Section H of the Closing Disclosure. And loan program rules on seller-paid fees, covered below, stayed in place. Choosing an agent and reading that agreement is the subject of our guide to using a real estate agent when buying a house.
On buyer vs seller commission in 2026, Redfin's averages have not fallen. Redfin reported on August 12, 2025 that the average U.S. buyer's agent commission on its closed transactions was 2.43 percent in the second quarter of 2025, up from 2.38 percent a year earlier. That is one brokerage's data, not a national rule, and your agreement sets your number.
The buyer's agent can be paid three ways, and the method changes where the money comes from and how the form shows it.
| Arrangement | How it is set | On the Closing Disclosure | Effect on buyer's cash |
|---|---|---|---|
| Listing brokerage shares its commission | Listing agreement and an offer made off the MLS | Seller-paid column | None |
| Seller contributes under the purchase contract | A term in the offer, such as Texas paragraph 12B(1) | Seller-paid column | None, up to the amount agreed |
| Buyer pays the agent directly | The written buyer agreement | Borrower-paid column | Adds to cash to close |
Split outcomes are possible. Say you are buying a $500,000 house in East Nashville, and your buyer agreement sets your agent's fee at 2.5 percent, or $12,500. The seller agrees to contribute 2 percent, $10,000. The figures are illustrative, but the logic holds: you owe the remaining $2,500 at closing, in cash, because a purchase loan is sized to the price and your down payment, not to fees you owe your own agent.
In Houston or anywhere else in Texas, the TREC resale contract gives this a specific home: paragraph 12B lets the seller pay a dollar amount or a percentage of the price toward the brokerage compensation the buyer owes, and a separate limit in 12A(1)(b) covers seller money for other buyer expenses. Keeping the two apart makes it easier to show a lender which dollars went where.
The financing question is whether a seller's payment to your agent counts against the cap on seller concessions. All three major agencies addressed it in 2024.
| Program | Seller pays buyer's agent | Buyer pays own agent | Source and date |
|---|---|---|---|
| FHA | Not an interested party contribution if paid as a matter of state or local law or custom and reasonable in amount | Not addressed in the statement | HUD statement, March 27, 2024 |
| Conventional (Fannie Mae) | Not counted toward the IPC limits when paid in line with local common and customary practice | Not addressed in the notice | Fannie Mae notice, April 15, 2024 |
| VA | Not treated as a seller concession | Allowed in reasonable and customary amounts under a temporary variance; not included in the loan amount | VA Circular 26-24-14, effective August 10, 2024 |
FHA. HUD's March 27, 2024 statement said that if sellers continue to pay buyer-side agent commissions "as a matter of state or local law or local custom," and the amounts are reasonable, existing policy would not treat them as interested party contributions. That keeps them out of FHA's concession limit, which our guide to what an FHA loan is places in context.
Fannie Mae. A Fannie Mae notice dated April 15, 2024 said that when a seller or seller's agent continues to pay the buyer's agent commission in accordance with local common and customary practices, "these amounts are not required to be counted towards the IPC limits."
VA. VA responded with Circular 26-24-14, a temporary local variance dated June 11, 2024 and effective August 10, 2024. It allows veterans to pay reasonable and customary buyer-broker charges where that compensation cannot flow through the listing broker. The charges are not included in the loan amount, they count when the lender checks whether you have enough liquid assets to close, and the amount the veteran pays goes in Section H of the Closing Disclosure. VA does not treat the seller's payment of these charges as a seller concession. The circular is temporary and states that it is valid until rescinded.
The gray area is a seller credit that the buyer then uses to pay their own agent. If that is your plan, ask your loan officer in writing how the payment will be classified before you write the offer. Money that counts as a concession can crowd out credits you need for other costs, or for discount points.
When one brokerage represents both buyer and seller, both commission lines go to the same firm, and the Closing Disclosure still has to show the total paid to that brokerage. Whether a single brokerage may do this at all depends on the state. Florida's statute, section 475.278, says a licensee "may not operate as a disclosed or nondisclosed dual agent" and presumes that licensees are transaction brokers unless a single agent relationship, or no brokerage relationship, is set up in writing. If you are buying in Brickell, an agent working with both sides is acting as a transaction broker, a limited form of representation, not as a dual agent. The Texas resale contract, by contrast, has a line for a broker firm that "represents Seller and Buyer as an intermediary."
Nothing requires a reduced fee when one brokerage keeps both sides, but nothing prevents a seller or buyer from asking for one in the listing or buyer agreement. The licensing rules behind these roles, state by state, are covered in what a real estate broker is.
Before closing, read Section H line by line against your agreements, and ask the settlement agent about any commission line you do not recognize. An agent, a lender or a real estate attorney can confirm what your contract obliges you to pay. If you are weighing a condo against a house, the commission math is similar, but the other costs are not; condo vs house pros and cons covers them. Recent buyers and sellers in a building can tell you how commissions were split there; ask them on Ask a Resident and browse Leevli's listings.
The rules on commission are written by regulators and contracts, but how deals were actually split in a building is something only recent buyers and sellers know.
Listings show the property, but they rarely explain the lived reality around it. On Leevli, a mover can explore the city, review neighborhood and building information, and ask a verified resident the specific questions that remain unanswered. That human layer helps readers know what to investigate before signing a lease, making an offer, or choosing between two addresses.
Only if you agreed to pay your own agent and the seller is not covering it. Your loan costs and other closing costs are separate from commission. When a buyer does owe the fee, it appears in Section H of the Closing Disclosure in the borrower-paid column and raises the cash you bring to closing, because a purchase loan is not sized to cover it.
Each party owes its own brokerage under its own written agreement. The seller pays the listing brokerage and may also contribute to the buyer's brokerage, either through the listing agreement or as a term in the purchase contract. Whatever the seller does not cover, the buyer pays. All of it is negotiable, and none of it is set by law.
On page 2, under Other Costs, in Section H labeled "Other." Regulation Z's commentary says that section includes all real estate brokerage fees, shown in the borrower-paid, seller-paid or paid-by-others column. On page 3, seller-paid amounts flow into the seller's "Due from Seller at Closing" total, and any buyer-paid amount flows into the buyer's cash to close.
Effective August 17, 2024, agents using an MLS must have a written agreement with a buyer before touring a home, stating compensation in objective terms and capping what the agent may receive from any source. Offers of buyer agent compensation were removed from MLS platforms. Commissions remained negotiable, and sellers can still offer compensation off the MLS or advertise buyer concessions on it.
The split is negotiated deal by deal rather than posted on the MLS. As a reference point, Redfin reported an average buyer's agent commission of 2.43 percent on its closed sales in the second quarter of 2025, up from 2.38 percent a year earlier. Your buyer agreement sets your actual rate, and the seller's contribution is whatever the contract says.
Generally you should plan to pay it in cash. VA's circular says buyer-broker charges are not included in the loan amount and count toward the cash you need to close. On other purchase loans, the amount is tied to the price and down payment, so a fee you owe your agent comes out of your funds. Ask your lender before you sign the agreement.
Generally not, under the 2024 guidance from the three main programs. HUD said customary, reasonable seller-paid buyer commissions are not interested party contributions for FHA. Fannie Mae said they need not count toward its limits. VA said it does not treat the seller's payment of buyer-broker charges as a seller concession. Confirm your lender applies it the same way.
One brokerage receives both sides of the commission, and the Closing Disclosure must still show the full amount paid to it. Some states restrict the arrangement. Florida prohibits dual agency and presumes licensees act as transaction brokers, while Texas allows a broker to act as an intermediary. Any reduced fee has to be negotiated in your agreement; nothing makes it automatic.
That depends on your agreement, not on the closing documents. Commission is typically paid from proceeds at closing, so if there is no closing, there is usually no settlement to pay it from, but listing and buyer agreements can contain their own terms. Read the compensation and termination clauses before signing, and ask a real estate attorney if a dispute arises.
Not comparing Section H with the agreements until closing day. A buyer who assumed the seller would cover the whole fee may find a balance in the borrower-paid column, and a seller may find a contribution larger than intended. Check the figures when the Closing Disclosure arrives, and ask the settlement agent to explain any administrative fee listed separately.
This article is informational and does not constitute legal, financial, tax or insurance advice.
