Buyer Broker Compensation: The Four Ways It Gets Paid
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Buyer broker compensation is the fee your agent earns for representing you in a purchase. In New York, it’s paid in one of four ways: directly by you, through a seller credit, through a co-broke split from the seller, or under a separate seller-to-broker agreement. The seller funds it on most deals, at a customary 2% to 3%.
We’ve represented buyers since 2017 and set our compensation in writing on every deal. So these are the mechanics as they actually run in New York, not the national template.
The short version: the money almost always starts with the seller. What changed in 2024 is how it gets there, per REBNY’s own rule change.
| How is it paid | Who funds it | When you see it |
|---|---|---|
| Direct buyer payment | You | On the closing statement, as a buyer, charge |
| Seller concession toward the fee | Seller, capped like other credits | Negotiated into the contract |
| Co-broke split | Seller, via the listing broker’s total | The default on most NYC resales |
| Seller-to-broker compensation agreement | Seller, in a standalone document | For-sale-by-owner and off-market deals |
What is buyer broker compensation?
It’s the least glamorous line in the least glamorous document: your buyer agency agreement. That agreement names your agent’s fee and says where it can come from.
The fee pays for representation. Pricing advice, the offer, negotiation, coordinating your attorney and lender, and getting the deal to closing. In New York, an attorney still handles the contract itself.
The number is negotiable. There is no legal rate, and the national average has drifted toward 2.5% since the 2024 rules.
The four ways a buyer’s broker gets paid
Four doors, and the seller is holding three of them open.
- A co-broke split. The seller’s listing agreement covers the whole commission. The listing broker shares part of the listing with your broker. This is the default on most NYC resales.
- A seller concession. The seller credits money toward your agent’s fee as a term of the contract. It is capped like other concessions.
- A separate seller-to-broker agreement. On a for-sale-by-owner or off-market deal, the seller signs a standalone document agreeing to pay your broker. A one-time showing agreement is one version.
- Direct payment by you. If the seller offers less than your agreed fee, you cover the gap.
Our page on who pays the buyer’s agent commission works through each case.
How is compensation set now?
In a written agreement, before your agent shows you a home. Since the NAR settlement, the fee has to be a specific figure, a number, not a mood. A range or “whatever the seller offers” isn’t allowed.
REBNY made written buyer-broker agreements mandatory for NYC showings from January 13, 2025. It also removed all compensation fields from its listing service on August 1, 2025, so the offer no longer travels with the listing. This page is part of our guide to NYC commissions and rebates.
Financing and lender rules
If you pay your agent directly, the cost is not financeable. It sits outside your mortgage.
A seller-paid fee is treated differently. The underwriter wants to know exactly who put money on the table. Fannie Mae confirmed in 2024 that a seller paying the buyer-agent fee per local custom does not count against the interested-party-contribution limits. A seller credit toward the fee is capped at 3% to 9% of the price, depending on your down payment.
If you want the fee handled and a rebate on top, see what NestApple offers buyers, then run a real deal through our closing-cost calculators.
Where a rebate changes the math
New York lets a broker give part of its commission back to the buyer. The fee goes out, and a slice of it comes back to you.
The seller still funds the full buyer-side commission. Your broker then rebates a share of it. The IRS treats that rebate as a reduction of the purchase price, not as income. Our page on whether commission rebates are legal has the state-by-state rules.
What we see on our own closings
The buyers who read the clause never call us about it later. Those who skim it sometimes discover in the contract that the seller’s offer is below the agreed-upon fee, and the gap is theirs.
Two habits fix that. Read the compensation clause before you sign the agreement. And ask, in the first meeting, what happens if the seller’s offer falls short.
Common questions
Who pays the buyer’s broker in New York? The seller, on most resales, goes through a co-broker. If the seller offers less than your agreed-upon fee, or nothing at all, you cover the difference.
Can I finance the buyer-broker fee? Only if the seller pays it. A fee you pay directly is not financeable and does not appear on your loan.
Does a seller-paid commission count against concession limits? No. Fannie Mae confirmed in 2024 that a seller paying the buyer-agent fee per local custom is not an interested-party contribution.
How much is buyer broker compensation? Customarily, 2% to 3% of the price. It is negotiable, as stated in your buyer agreement, and has averaged closer to 2.5% since 2024.
Nicole Fishman Benoliel co-founded NestApple in 2017. She's a lawyer admitted to the New York bar - her law degree is from La Escuela Libre de Derecho in Costa Rica, with further study at IE Business School in Madrid and an LLM from Fordham in New York. She does not act in a legal capacity at NestApple; every client is referred to an attorney who handles real estate deals full time.
