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How will I pay my buyer agent, I've barely enough for a down payment?

Real Estate Agent with Realty ONE Group Advocates 484-237-2055 PA License - AB067198

There are many options to cover the buyer agent's fee, discover some in this post and what you should be looking for in an agent representing you.

There has been a lot of misleading commentary recently about how the real estate buying and selling processes are going to be changing due to several lawsuits, and how this will save consumers money both as sellers and buyers.

Well, let's discuss some facts.

Originally, both the listing broker and selling broker worked for the seller, that is why listing brokers shared commission with the broker bringing the buyer. That agent/broker was a sub-agent for the seller, representing the seller even though they brought the buyer. Then, because of confusion, many of those buyers had thought the agent taking them to the listings was working for them, buyer agency in many states was established.

Buyer agency established a fiduciary relationship between the buyer and the buyer broker/agent. The listing agreement establishes the same between a seller and the listing broker/agent. But this buyer agency agreement did not tackle how the buyer agent would be compensated, it was left as it was with the listing broker offering to share their fee. Although listing agreements for the seller spelled out how much was being charged by the listing broker and the seller could agree how much was offered to the buyer 's broker. All of this was negotiable, which is why every seller asks if they can get a lower commission to sell their homes. There is no standard fee, each brokerage charges what they can to pay the bills and hire good agents. The buyer agency agreement was changed later to include compensation, but most agents were willing to accept what was being offered by the listing broker.

Many different brokers offered different models. Some just offered to put a home in the MLS and gave no advice. Others only represented buyers and took no listings. Some offered flat fees for each stage in a menu type format. There was plenty of choice. In the middle was the MLS which had always been there to make sure agents knew what homes were for sale and to show what compensation was offered to a buyer broker. This used to be hidden, but recently was shown to buyers so they knew ahead of time what their agent was going to be paid.

If you are moving any distance, let alone to a new city, having a buyer agent is essential to understand the nuances of an area from the selling process to differences between townships. Along the Main Line, home prices can vary from street to street. Some areas may have brownfield sites nearby which it is good to know about when raising a family.

The proposed settlement lays out some changes for real estate, it still needs to be accepted by the court and the Department of Justice which has been investigating the process for several years. What the media has laid out is not always true.

So as a buyer there are still ways for you to work with a buyer agent representing you and protecting you even if you can barely afford the down payment.

As an aside, you do not need 20% down to buy a home, there are many options out there with smaller down payments. A good buyer agent can guide you to a mortgage broker who has plenty of options. Also, a buyer's agent may be able to help you find a home with an assumable mortgage at much lower rates than currently offered by lenders today.

Working with a buyers agent, you will need to sit down and negotiate the services that agent is going to provide and the maximum compensation they will charge. This can be renegotiated, if needed.

The listing broker is no longer going to be allowed to show compensation offered in the MLS. But they can do so on their own websites. The seller can decide if they want to offer compensation to the buyer broker.

How will you pay if you can barely afford a down payment, the seller can still offer a concession towards closing costs in the MLS. As a buyer you may use this towards the fees payable to your agent. These closing cost concessions are often limited by lenders depending on the type of loan you are using. Some lenders can also offer a closing cost concession which may result in you paying a higher rate of interest. A good agent can guide you through this.

You can also write an offer that includes a concession if the seller is not offering one, this may require a higher price to cover the concession.

Another option is for you to ask a relative to pay for the agent working with you.

Some media have suggested working with the listing agent, but remember that agent represents the seller, not you, they can give no advice, or limited advice if acting as a dual agent. Besides, you will have to call each listing agent yourself and set up an appointment at their convenience and in a limited inventory market you may miss a home before even seeing it.

Obviously, there will be many ways to tackle this new system once it is established. Working with an experienced agent as your buyers agent will be important as they can guide you through the process and explain the pros and cons of each option so you can make the right decision for you.

What should you be looking for in a strong buyer's agent:

1. Representation and knowledge of the process

2. Guidance and education of the process and the options.

3. Strong Negotiation Skills

4. Does the agent have access to legal advice if required

5. Personalized service, how accessible is the agent

6. Advance knowledge of new listings

7. Strong network of contacts for mortgages, contractors, inspectors, title providers, etc.

If you want to work with a strong agent who can offer these contact Nick Vandekar, Selling the Main Line and Chester County, with Realty ONE Group Advocates, office 484-237-2055, cell or text 610-203-4543, or email  Nick@VandekarTeam.com.

Posted by


Nick Vandekar
Nick is a Tredyffrin Easttown Residential and Commercial REALTOR selling The Main Line, Chester, Delaware and Montgomery Counties.

Giving you the confidence to make
the right decisions.

225 W Uwchlan Ave
Downingtown , PA 19335
Office 484-237-2055
Mobile: (610) 203-4543 [call or text me]
Email Me


My Blog


If you are buying or selling on or around
Tredyffrin Easttown or along the Main Line, 
I can help you, contact me.


Ricardo Mello
Manhattan Miami Real Estate - Manhattan, NY
Manhattan & Miami Real Estate Agent

Well, that's why I never work with first time home buyers! Stay away from them LOL


Apr 15, 2024 06:58 PM
Jeff Drew
Motto Mortgage Pinnacle MB1998648 - Bridgewater, MA
Massachusetts Mortgage Professional

Very good, detailed explanation on how to navigate upcoming changes. 

Apr 16, 2024 04:56 AM
Nick Vandekar, 610-203-4543
Realty ONE Group Advocates 484-237-2055 - Downingtown, PA
Selling the Main Line & Chester County

Patricia Kennedy I wrote it as if writing for my clients to explain their options.

Matt Brady I honestly think people know they are negotiable, they always ask if you can do better. But, they are not experienced negotiators and accept what ever response they get.

Sam Shueh every market is slightly different, real estate is not national but local.

Dr. Paula McDonald my guide was to write it as if explaining this to a client.

John Juarez that has always been our challenge, and yes, this will be a change and we need to adapt to it.

Apr 16, 2024 06:56 AM
Nick Vandekar, 610-203-4543
Realty ONE Group Advocates 484-237-2055 - Downingtown, PA
Selling the Main Line & Chester County

Joan Valverde we also have buyers agency and we need to do a better job, rather than just accepting what was offered in the MLS.

Ricardo Mello that is your choice and if it works for you that is great. Even some resale sellers have little equity.

Jeff Drew thank you, I wrote it as if writing to a client.

Apr 16, 2024 06:59 AM
April Swenson
Coldwell Banker Ocean Shores Brokers - Ocean Shores, WA
CRS and Managing Broker - Ocean Shores Real Estate
Thank you for your post. My answer is easy....ask the Seller to pay (for example) $17-20K of the Buyer's closing costs instead of (for example) $10K, so therefore the Buyer's Broker fee is paid.
Apr 16, 2024 08:22 AM
Nick Vandekar, 610-203-4543
Realty ONE Group Advocates 484-237-2055 - Downingtown, PA
Selling the Main Line & Chester County

A good suggestion April Swenson if it is allowed by the lender. It does look as if the mortgage types are adjusting to allow seller credits paid to a buyers agent not to be included in those limits.

Apr 16, 2024 08:24 AM
Ginger Harper
Coldwell Banker Sea Coast Advantage~ Ginger Harper Real Estate Team - Southport, NC
Your Southport~Oak Island Agent~Brunswick County!

WE are facing some mighty big changes to our industry.  I remember when the OTP was 1 page as well and the LA 

Times, they are a changing....

Apr 16, 2024 12:36 PM
Nick Vandekar, 610-203-4543
Realty ONE Group Advocates 484-237-2055 - Downingtown, PA
Selling the Main Line & Chester County

Ginger Harper nothing like change to keep us on our toes.

Apr 16, 2024 12:43 PM
RE/MAX Shoreline - Portsmouth, NH
Buying or Selling? Ann & Jim are the local experts

Nice post Nick. NAR recently reached out to Fannie Mae and Freddie Mac to ask for clarification on how "Interested Party Contributions" (IPCs) will be treated going forward. Their answer: "Based on the selling guides in use by the GSEs, property sellers are allowed to make financing concessions toward the borrower’s closing costs at a maximum amount of 2% to 9% of the property value. In their guidance issued on Monday, the GSEs note that “fees or costs customarily paid by the property seller according to local convention are not subject to these financing concessions limits.”

“Buyer agent fees have historically been fees customarily paid by the property seller or property seller’s real estate agent, and, as such, they are currently excluded from these financing concession limits,” according to the statement from Freddie Mac.

Moving forward, the GSEs say that if these fees continue to be “customarily paid by the property seller according to local convention, they will not be subject to financing concessions limits.”

Apr 17, 2024 04:29 AM
Jeffrey DiMuria 321.223.6253 Waves Realty
Waves Realty - Melbourne, FL
Florida Space Coast Homes

I do believe some sellers will try and opt out of paying a commission to the buyer side. In this case we can ask our buyers if they wish us to show them homes that commission is not paid by the seller (they will have responsibility to pay). If the buyer does not feel it is in their BEST INTEREST to see those homes, we can eliminate them from showing.

Apr 17, 2024 06:32 AM
Nick Vandekar, 610-203-4543
Realty ONE Group Advocates 484-237-2055 - Downingtown, PA
Selling the Main Line & Chester County

Jim Lee, REALTOR, CRS, ABR I had seen that after I wrote this, but good information, thanks for commenting.

Jeffrey DiMuria 321.223.6253 Waves Realty that is also another option as well.

Apr 17, 2024 08:09 AM
Pat Starnes-Front Gate Realty
Front Gate Real Estate - Brandon, MS
601-991-2900 Office; 601-278-4513 Cell

Excellent advice! Thanks for sharing. I am re-blogging as a reference.

Apr 17, 2024 10:29 AM
Nick Vandekar, 610-203-4543
Realty ONE Group Advocates 484-237-2055 - Downingtown, PA
Selling the Main Line & Chester County

Pat Starnes-Front Gate Realty thank you.

Apr 17, 2024 10:59 AM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Nick it will be interesting to see how FHA, Fannie Mae, Freddie Mac, VA, & USDA handle Seller concessions with the recent change.  Hopefully they will clarify it quickly.

Apr 17, 2024 01:05 PM
Nick Vandekar, 610-203-4543
Realty ONE Group Advocates 484-237-2055 - Downingtown, PA
Selling the Main Line & Chester County

George Souto till we actually have a ratified accepted settlement agreement I think the answers will be somewhat vague from all parties.

Apr 17, 2024 01:25 PM
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

Hi Nick:

You made good points in your post which also generated some good discussion. We still have to have a final approval, and the recent word from Fannie Mae as shared by Jim Lee, REALTOR, CRS, ABR in his comment is encouraging. 


Apr 17, 2024 05:27 PM
Gloria Johnpierre
Siven Premier Real Estate, Inc - Tampa, FL
Real Estate Broker- Selling Tampa Bay Homes

Very impressive article. Thank you for breaking it down for all to understand. We are all navigating this new world. May much success continue to be brought to you. 

Apr 18, 2024 01:32 AM
Gary J. Muccio, Associate Broker
Keller Williams of Central PA - Camp Hill, PA
Exceptional Customer Service!

Great post, Nick and summary of the upcoming changes and the benefits of a Buyer's Agent. I'm on the PAR task force looking at which PAR forms will need to be amended to comply with the NAR settlement agreement. We've been discussing several of the points you mention. It will definitely be a challenge for many if they can not explain the value they bring to a transaction. Continued success to you!

Apr 27, 2024 09:10 AM
Nick Vandekar, 610-203-4543
Realty ONE Group Advocates 484-237-2055 - Downingtown, PA
Selling the Main Line & Chester County

Jeff Dowler, CRS this will move ahead in steps as I believe now all the brokerages have settled, and the settlement has preliminary approval. There can still be other lawsuits approaching this from a different angle, such as the buyer lawsuits.

Gloria Johnpierre thanks for reading and for your comment. Glad it helped.

Gary J. Muccio, Associate Broker thank you, yes, I am sure some of our forms will need to be adjusted so we don't have any issues, however, many of the forms are laid out very well already.

Apr 27, 2024 11:00 AM
Karen Martin Real estate agent Safe Harbor Realty
Safe Harbor Realty - Westport, MA
Westport, MA Realtor Helping Home Sellers & Buyers

Great Blog thank you 

Apr 28, 2024 03:55 PM