Agent commission and making an offer

[Sam M.]

How does agent commission work now?  Haven't bought a property in awhile.

If I submit an offer, does the offer include the commission or not?  

If the seller is on a 2.5% with their agent and I'm at a 3% with my agent as a buyer, would the seller's agent ask for 3%?  Or vice versa.  

The commission can vary by agent.  I don't see the commission posted as it used to be on Redfin/Zillow.  (Am I missing something?)

What is the standard?  3% per agent, is 2.5% doable? 

Edit: For SFH

[Gregory Schwartz]

@Sam M. Great question. The world of commissions has changed lately and here in Texas they keep us on our toes by rolling out new contract forms monthly. A few things to know:

- The seller will pay the seller's agent whatever they have negotiated. I don't see a scenario that you'd be paying their agent 

- There are 4 ways your buyer's agent gets paid (at least here in TX):
  1. The seller pays extra compensation to the listing agent who then splits it with your agent (this is the way most transactions were done before 2024. We now use a form call the "Compensation Agreement Between Brokers for this. Ask to see this form before you submit your offer)
  2. The seller directly pays your buyer's agent. 
  3. The seller pays you via seller concessions and you use that money to pay your agent
  4. You pay your agent at closing (think of it as an additional closing cost) 

Depending of the situation and of these options can be used by you and your agent to negotiate with the seller. Your buyers agent should be asking if the listing agent or the seller is offeringd buyer's agent commission split. Sometimes they have a pre-determined amount they are willing to share, sometimes they say they are willing to pay but the amount must be negotiated. 

You want to look at paragraph 12 of the Texas purchase contract, called the 'One to Four Family Residential Contract'. This is how you ask for the seller to pay your buyer's agent commission via the offer. 

Some agents are struggling to understand this new way of negotiating for commissions. If your agent can wrap their head around this you might want to look for new representation.

Good luck!