In a real estate transaction, the payment of commissions typically involves both the buyer’s agent and the seller’s agent. Here’s a breakdown of how these commissions are typically handled: 

Seller’s Agent Commission: 

The seller’s agent, also known as the listing agent, is the real estate agent hired by the seller to represent them in the sale of their property. 

The seller and the listing agent negotiate the listing agreement, which includes the commission rate that the seller agrees to pay upon the successful sale of the property. 

The standard practice is for the seller to pay the entire commission, which is then split between the listing agent and the buyer’s agent. 

Buyer’s Agent Commission: 

The buyer’s agent is the real estate agent who represents the buyer in the transaction. 

When the buyer hires a buyer’s agent, they agree upon the commission that the buyer will pay to the buyer agent. Typically, the seller will agree to compensate the buyer’s agent through the commission offered by the seller in the listing agreement. If the seller is not offering to pay the buyer agent commission, then the buyer is responsible for the buyer agent commission. 

The commission amount is usually a percentage of the final sale price and is agreed upon between the listing agent and the seller and the buyer agent and the buyer. 

Cooperating Broker’s Commission: 

The commission paid to the buyer’s agent is often referred to as the cooperating broker’s commission. 

The cooperating broker’s commission is usually split between the buyer’s agent and the listing agent as stated in the Local Multiple Listing Service by the listing agent. 

Buyer’s Agent Paid by Buyer: 

The buyer will pay the buyer’s agent directly as per the agreement between the buyer and the buyer’s agent in the Buyer Brokerage Agreement.  

Generally, the buyer’s agent is compensated through the commission offered by the seller as posted by the listing agent in their Local Multiple Listing Service. Should the buyer agent commission not be offered, it is the buyer’s responsibility to compensate their agent. 

It’s essential for both buyers and sellers to be aware of the commission structure and terms outlined in the listing agreement as well as the buyer brokerage agreement. Real estate commissions are negotiable, and the specific details can vary based on local practices, market conditions, and individual agreements between parties involved in the transaction.