How to Justify Your Commission (2026): Where the Money Comes From, and What the Concession Rules Allow

The old version of this page told you to say a specific sentence to buyers: that if the seller pays more than your agreed fee, the extra comes back to them. It is not true. The rule is a cap on what your brokerage may receive, and nobody, not NAR, not any MLS, not any regulator, has said the excess belongs to the buyer. It was a promise scripted for agents to make out loud, and it is gone.

So this is a rewrite. Justifying your fee in 2026 is not a speech, it is knowing where the money can lawfully come from: what the MLS lets a seller advertise, what the buyer's loan programme lets them pay, and what your agreement has to say before any of it works. If you want this as a programme rather than a page, that is what my real estate coaching is for.

What the rule actually does with money above your fee

Start here, because this page carried the wrong version of it.

NAR's rule is that an MLS Participant may not receive compensation for brokerage services from any source that exceeds the amount or rate agreed to in the agreement with the buyer. Read what that is: a prohibition on your brokerage receiving. It is not a statement about who owns the difference.

Settlement FAQ 39 asks directly whether a buyer broker can accept a bonus on top of the offered compensation. The entire answer is the receipt prohibition again, saying nothing about where the excess goes. The California Department of Real Estate framed it the same way in December 2024, as the maximum the agent may receive from any source.

The two compliant routes

If the seller is willing to contribute more than the number in your agreement, there are two ways to capture it and both are negotiations rather than rights.

• Amend the agreement upward before you receive anything. FAQ 74 confirms a buyer agreement may be amended, and an amended agreement has to meet the same requirements as the original. Raise the agreed amount, get it signed, then receive. The order matters.
• Or agree in the purchase contract where the surplus goes. If the contract says the credit applies to the buyer's closing costs and prepaids, there is no surplus to argue about. I found no authority blessing this route specifically, so treat it as ordinary contract drafting rather than a sanctioned mechanism, and have your broker look at the wording.

Neither route is uncontroversial. Monestier argues the cap should mean the amount in the initial agreement and treats amending it upward to absorb a larger seller payment as circumvention. The amendment route looks defensible to me where the buyer genuinely agrees before receipt, but a serious critic disagrees and you should not present it to a client as settled.

What you must not do is take more than the agreement says and sort it out afterwards. The prohibition bites at receipt.

Sources: NAR Written Buyer Agreements 101; NAR Settlement FAQs 39 and 74, 8 August 2024; California Department of Real Estate guidance, 12 December 2024; Tanya Monestier, Report on Buyer Representation Agreements Post NAR Settlement, August 2024; Consumer Federation of America, February 2024. Read 3 September 2026.

Nobody can tell you the average buyer agent fee

The second thing this page used to do was quote a national average. Four other posts on this site quoted the same one and a fifth quoted a different one, which means an agent reading two Jamil Academy pages in one sitting got two numbers to say to the same client. Both of those are worse than admitting the truth, which is that no source supports a national average buyer agent fee.

• Redfin's figure is Redfin's own book. It is drawn from transactions a brokerage sees, not a national sample, and Redfin competes with you for the listing.
• Clever's figure is an opinion poll of its own partner agents. The underlying panel is 533 agents in Clever's referral network, asked what rates are typical in their market rather than what they themselves charge. Clever sells referrals. That single panel is where the widely repeated 2026 total commission figure and most of the state by state tables come from, republished until the origin disappears.
• The Federal Reserve work measured advertised offers, not what was actually paid, and the series ends in August 2024, the month the practice changes took effect. It cannot tell you anything about the market you are working in now.
• NAR does not publish it. The 2025 Profile of Home Buyers and Sellers, 6,103 responses at a 3.5 percent response rate, contains no buyer agent fee data at all.

The most transparent post-settlement work I found is none of those. Stephen Brobeck and Wendy Gilch interviewed 281 buyer agents at major brokerages across 26 metropolitan areas between July and September 2025, posing as prospective buyers, and report a stated sample, geography, window, method and limitations.

Their finding is uncomfortable in both directions. 95 percent of those agents quoted between 2.5 and 3 percent, with nearly three times as many quoting 3 as 2.5, and the share quoting 3 percent rose from 40 to 64 percent against a comparable 2022 study. In 12 of the 26 cities at least 90 percent of quoted rates were the same. But of the 254 agents who answered the question, about two thirds said they would accept less than they first asked for, and nearly 40 percent would take 2 percent or below.

Which is the point. Quoted, agreed and paid are three different quantities and the study measures the first only, by its authors' own account. Any article treating them as one number is wrong whichever number it picks. Note also that the quoted range sits above both vendor figures, so the vendors are not simply inflating.

So the honest position is that nobody knows, and the useful position is that it does not matter. What you charge is what your buyer agreed to in writing. The comparison a client cares about is not a national average, it is what you will do and what it costs, which is the argument made properly in my guide to what agents actually do for buyers.

Track your own realised fee across your last twenty closings instead. That number is real, it is defensible, and it is the only one you can stand behind in front of a client.

Sources: Redfin published commission data; Clever Real Estate agent survey, 533 partner agents; Federal Reserve research on advertised buyer broker compensation through August 2024; NAR 2025 Profile of Home Buyers and Sellers; Stephen Brobeck and Wendy Gilch, The Homebuyer Experience: Commissions and Contracts, November 2025, 281 agents in 26 metropolitan areas interviewed July to September 2025. Read 3 September 2026.

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The concession, and the sentence that makes it non-compliant

Offers of compensation left the MLS on 17 August 2024. Seller concessions did not, and the concession is now the ordinary route by which a seller contributes to what your buyer owes you. Bright moved early, launching concession fields on 11 June 2024 and removing the compensation field on 14 August.

The permission comes from paragraph 58.xiii(b) of the settlement agreement, and it has a condition attached. Sellers may offer buyer concessions on an MLS, for example for buyer closing costs, so long as those concessions are not limited to or conditioned on the retention of or payment to a cooperating broker, buyer broker, or other buyer representative. FAQ 92 repeats it.

One distinction that gets lost. Offers of compensation were not abolished, only their appearance on the MLS. FAQ 30 says it plainly: offers of compensation continue to be an option consumers can pursue off-MLS through negotiation and consultation with real estate professionals. So a listing broker may still offer, and you may still ask, away from the MLS. What you cannot do is put it in the MLS or condition an MLS concession on it. The channel changed, not the possibility.

One nuance that causes arguments. Bright does have a buyer broker costs concession type, but only in the closing side fields, as a record of what a closed deal contained. It is not available at listing entry and cannot be used to advertise. If you were trained on the May 2024 announcement rather than on where the fields ended up, that is the distinction you are missing.

The workable shape is simple. The MLS concession is general purpose and unearmarked. What the buyer then does with the credit, including paying you, is governed by your agreement. Who pays whom, and how that changed, is in my guide to how real estate agents get paid.

Sources: NAR Settlement Agreement paragraph 58.xiii(b); NAR Settlement FAQ 92, 8 August 2024; Bright MLS concession policy as republished by the Southern Maryland Association of REALTORS, 3 July 2024; Real Estate News reporting of Bright's field changes, 30 May 2024. Bright's own rules are not publicly retrievable, so the policy text here is a member association's republication and should be confirmed with your broker. Read 3 September 2026.

What the buyer's loan lets the seller pay

Here is the constraint agents skip and loan officers have to break to them later. A seller can only contribute what the buyer's loan programme permits, and the ceilings differ by programme. Whether your own fee competes for that room is the next section's question, and the answer depends on which programme it is.

Sources: Fannie Mae Selling Guide B3-4.1-02, section published 7 May 2025; HUD Handbook 4000.1 II.A.4.d.iii(G); VA Circular 26-24-14; USDA HB-1-3555 chapter 6. The FHA handbook text was read from a mirrored copy because hud.gov would not serve the section, so confirm it against the agency. I could not read the VA Lender's Handbook M26-7 at all, which is why no VA percentage appears in this table. Read 3 September 2026.

Three things follow that agents get wrong. The conventional percentage is taken against the lower of price or appraised value, so a low appraisal shrinks the ceiling at the worst moment. Breaching a conventional cap is not simply declined: the excess is reclassified as a sales concession and deducted from the sales price, re-sizing the loan. And on FHA, anything over 6 percent is an inducement to purchase that cuts the Adjusted Value dollar for dollar.

There is also a limit on what the money may be used for. Conventional contributions may not fund the down payment, the reserves or the minimum borrower contribution; they cover closing costs and prepaids, plus HOA assessments for up to twelve months after settlement. FHA is the same on the key point: contributions may not be used for the minimum required investment, so a concession cannot pay an FHA down payment.

The VA row needs its own paragraph, because the number everyone quotes is the wrong tool. You will see a 4 percent VA seller concession limit repeated everywhere. I could not read it in the VA Lender's Handbook, which would not serve, and the only corroboration I found was from lenders who originate VA loans, so I am not going to print it as a rule. More to the point, it does not govern your fee either way.

What does govern it is Circular 26-24-14, which I did read. Paragraph 4.c states that VA does not treat the seller's payment of buyer broker charges as a seller concession. So whatever the general VA concession limit turns out to be, seller payment of your fee sits outside it. An agent who sizes the ask as though the fee eats the allowance under-asks by the amount of their own fee.

The same circular carries two consequences worth knowing before you write an offer: the charge cannot be included in the loan amount, and it counts in deciding whether the veteran has enough liquid assets to close. Your fee directly reduces a VA buyer's qualifying cash.

The contested joint: where that exclusion is conditional

There is a live instability underneath all of this, and it is worth understanding because it is the thing most likely to change under you.

A seller paying the buyer's agent would ordinarily be an interested party contribution and would count against the ceilings above. In April 2024 Fannie Mae and Freddie Mac said it does not: where a seller or the seller's agent continues to pay the buyer's agent commission in accordance with local common and customary practices, those fees are excluded from the financing concession limits. FHA said something similar in FHA INFO 2024-12 on 28 March 2024.

Two programmes are cleaner. The VA excludes buyer broker charges unconditionally under Circular 26-24-14, and USDA's handbook does the same in its text. On conventional and FHA the exclusion is conditional, and conditional on a fact about the market that is actively changing.

And the settlement is not a finished subject. The Department of Justice called an earlier proposed rule change cosmetic in its Nosalek statement of interest in February 2024, because the modified rule still gave sellers and listing brokers a role in setting buyer broker compensation. It was still filing in December 2025, in Davis v. Hanna Holdings, saying association rules are not automatically exempt from the rule against horizontal price fixing. Build on your own agreement, not on the assumption that this arrangement is the last one.

What that means for you is practical. Do not assume the seller's payment of your fee sits outside the cap on a conventional or FHA file. Ask the loan officer, on that file, in writing. If the exclusion is unavailable, your fee lands inside the ceiling and starts competing with the buyer's closing costs for the same room.

Sources: Fannie Mae Selling Notice, Real Estate Commissions and Interested Party Contributions, 15 April 2024, and the joint GSE language of the same date; FHA INFO 2024-12, 28 March 2024; VA Circular 26-24-14, paragraph 4.c; USDA HB-1-3555 paragraph 6.2.C. Read 3 September 2026.

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Asking for it, and how to word the contract

The ask is unremarkable once the mechanics are straight. Ask early, ask for the right thing, and put it in the right document.

Ask the listing agent for an unearmarked seller concession toward the buyer's costs, sized to what the loan programme allows. Do not ask for a contribution to your commission: that is the thing the MLS may not advertise, and it puts the listing agent in an awkward position for no gain.

Sequence it properly. Confirm the fee first, then get the programme position from the loan officer, then size the ask, then write it into the contract. Agents who do this backwards find at closing that the concession cannot be applied as intended. The conversation that sets the fee belongs in my guide to the buyer broker agreement script.

One drafting note that saves the deal. If there is any chance the concession exceeds your agreed fee, say in the purchase contract where the surplus goes, because the settlement rule stops your brokerage receiving more than the agreement says and nobody has ruled on who owns the difference. Deciding it in the contract turns an unanswered question into a term.

And if the seller says no, that is a normal answer. It means the buyer pays you from funds to close, which they agreed to in writing, and on a VA file it means checking their liquid assets again because the charge cannot be financed. The seller-side view of this same negotiation, and why a seller might reasonably refuse, is in my guide to commission objection handlers.

What Virginia requires in the agreement itself

Virginia imposes its own requirements on the agreement, independently of anything NAR or any MLS says, and one of them changed in 2025.

Va. Code 54.1-2137(C)(2) requires a written brokerage agreement to state the amount of the brokerage fees and how and when such fees are to be paid. Not a range, not a reference to a schedule. The amount, and the mechanics of payment. That is the subsection your concession planning has to survive, because if the fee can be paid three different ways depending on what the seller agrees to, the agreement still has to say so.

The same section requires a definite termination date, failing which the agreement terminates automatically 90 days after the date of the brokerage agreement. An agreement with no end date does not run forever. It runs for 90 days.

Read the trigger from the statute rather than from a summary. Virginia requires the written agreement before brokerage services are provided, and the 2025 amendments at chapters 479 and 495 tightened when that bites. The NAR practice change is a separate obligation with a separate trigger, binding MLS Participants working with a buyer who tours, in person or on a live virtual tour. Two duties from two sources, and only the Virginia one is law. Check the current text of 54.1-2137 before you rely on either summary, including mine.

Sources: Va. Code 54.1-2137, subsection (C)(2) and the termination provisions; 2025 Acts of Assembly chapters 479 and 495. Read 3 September 2026.

How it shows up at closing, and what nobody has specified

Real estate commissions appear on the Closing Disclosure in the Other subheading of the Other Costs table, Section H on page two, under 12 CFR 1026.38(g)(4). The official interpretation says the costs disclosed there include all real estate brokerage fees.

One detail decides what your client sees. The Other Costs table carries columns for borrower paid, seller paid and paid by others, so the same fee appears in a different column depending on who funds it, and the (h) totals roll those columns up separately. The column, not the line item, is what a buyer looks at when they ask what they paid you.

The interpretation also requires the amount to be the total paid to any real estate brokerage as a commission. I found no authority requiring the buyer's Closing Disclosure to break the listing broker's commission out from the buyer broker's, and no authority saying it may be combined either. That is an open question rather than a permission, so do not promise a client their statement will show your fee on its own line until you have asked the title company.

On a VA file the position is more specific than anywhere else. Circular 26-24-14 says no invoice is required for veteran paid buyer broker charges, but the amount must appear on the Closing Disclosure, and Change 1 of 5 August 2024 directs that the total paid by the veteran be recorded in Section H, Other. If you work with veterans, that is the one file type where you can tell the client in advance exactly where to look.

Sources: 12 CFR 1026.38(g)(4) and (h) and the Official Interpretations; VA Circular 26-24-14 Change 1, 5 August 2024; searches of CFPB TRID compliance resources and Regulation Z updates. Read 3 September 2026.

What you may not say about your fee

The last piece is the language, and it is short. The old version of this page told you to say you were quoting the going rate. Two other posts on this site correctly call that a legal problem, which is a good illustration of why a site needs one answer rather than five.

NAR's own fourth requirement for a written buyer agreement is that it disclose in conspicuous language that broker commissions are not set by law and are fully negotiable. If your agreement has to say that in conspicuous type, you cannot spend the consultation implying the opposite.

The background is older than the settlement. The FTC and DOJ reported jointly in 2007 that brokers compete less on price than would be expected in a competitive market, and that the available data suggested rates may be sufficiently inflexible to cause commission fees to move in tandem with housing prices. That is a claim about rates tracking prices rather than competing, and language describing a rate as standard, going, typical or customary is the language that keeps it that way.

Say what is true and specific instead. This is my fee, here is what it covers, it is negotiable, and here is what changes if we change it. That is a stronger position than an average you cannot source, and the wider settlement context is in my guide to the NAR settlement explained. Getting comfortable saying your own number out loud is most of what my real estate coaching works on.

Sources: NAR Written Buyer Agreements 101, fourth required element; FTC and DOJ, Competition in the Real Estate Brokerage Industry, April 2007, at page 30. Read 3 September 2026.

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Frequently asked questions

If the seller pays more than my agreed fee, does the extra go to the buyer?

Nobody has said that it does. The NAR rule is that an MLS Participant may not receive compensation from any source that exceeds the amount or rate agreed with the buyer, which is a prohibition on the brokerage receiving rather than a statement about who owns the difference. Settlement FAQ 39 answers the bonus question with that prohibition and nothing else, and I could find no MLS rule or regulator guidance addressing the excess. Do not promise a buyer a refund. Amend the agreement upward before receipt, or direct the surplus in the purchase contract.

Can the MLS listing say the seller will pay the buyer agent fee?

No. Paragraph 58.xiii(b) of the settlement agreement permits MLS concessions only so long as they are not limited to or conditioned on the retention of or payment to a cooperating broker, buyer broker or other buyer representative, and FAQ 92 repeats it. Field design is a matter of local discretion under FAQ 87, so read your own MLS rules. Bright, the MLS for this market, goes further: its published policy, republished by a member association because Bright does not publish to non-subscribers, is that compensation cannot be entered in any field including remarks. Ask for an unearmarked concession toward buyer costs instead.

How much can a seller actually contribute?

It depends on the buyer's loan. Conventional interested party contributions are capped at 3 percent above 90 percent loan to value, 6 percent from 75.01 to 90 percent, 9 percent at 75 percent or below and 2 percent on investment property, measured against the lower of sales price or appraised value. FHA and USDA each allow 6 percent of the sales price. I have deliberately not printed a VA percentage: I could not read the VA handbook, and in any event Circular 26-24-14 says VA does not treat seller payment of buyer broker charges as a seller concession. Confirm every number on the file with the lender.

Does the seller paying my fee count against those caps?

Not on paper, but the exclusion is conditional on conventional and FHA files. Fannie Mae and Freddie Mac said in April 2024 that seller payment of buyer agent commissions is excluded from financing concession limits where it accords with local common and customary practices, and FHA's version in FHA INFO 2024-12 adds that the fees be reasonable in amount. The settlement exists to end that custom, and no agency document says what happens when it is gone. VA and USDA exclude buyer broker charges unconditionally.

Can a VA buyer finance my fee into the loan?

No. VA Circular 26-24-14 authorises a temporary local variance letting veterans pay reasonable and customary buyer broker charges, but states those charges are not included in the loan amount. They are also considered in deciding whether the veteran has sufficient liquid assets to close, so your fee reduces their qualifying cash position. On a VA file, settle the fee and the concession plan before you write an offer.

What does Virginia require the agreement to say about my fee?

Va. Code 54.1-2137(C)(2) requires a written brokerage agreement to state the amount of the brokerage fees and how and when they are to be paid. The same section requires a definite termination date, and without one the agreement terminates automatically 90 days after execution. Since the 2025 amendments at chapters 479 and 495, the written agreement is required before showing property, expressly including live virtual tours.

What is the average buyer agent commission in 2026?

No source supports a national average. Redfin's figure comes from its own brokerage transactions, Clever's comes from an opinion survey of 533 agents in its own referral network and is the origin of most of the state tables in circulation, the Federal Reserve work measured advertised offers and ends in August 2024, and NAR's 2025 Profile publishes no buyer agent fee data at all. Your fee is what your buyer agreed to in writing, and NAR requires the agreement to say in conspicuous language that commissions are not set by law and are fully negotiable.

Educational content only. Not brokerage, legal, tax, lending or financial advice. The author is a licensed real estate agent, not an attorney and not a loan officer. Jamil Academy is not affiliated with, endorsed by, or sponsored by any company or agency named in this article, and company and product names are trademarks of their respective owners used only to identify what is being discussed. This page carries no affiliate links, no commissions and no sponsored placements, though it does link to the author's own paid products. Statutes, regulations, agency handbooks, association policies and MLS rules were read from the sources named on 3 September 2026 and change without notice; some agency handbook text was read from mirrored copies because the agency sites would not serve it, and is flagged where that is so. Loan programme concession limits are summarised for planning and are not an underwriting determination. Nothing here substitutes for advice from your broker, the lender on the file, or your own attorney. Views expressed are the author's own opinion. If you believe anything here is inaccurate, tell us and we will correct it.