Who pays the buyer's agent in Chicago? It can be the seller, the buyer, or a split between the two, and it is settled through negotiation. Since August 17, 2024, the amount is written into an agreement you sign with your agent before you tour a home. It is no longer advertised in the MLS.
Many buyers I meet have heard that agent compensation changed, and many worry they will now have to pay their agent out of pocket. This post explains how it actually works.
In my own business, I have been able to negotiate for the seller to pay my compensation in every buyer transaction I have closed since August 2024. That is not automatic, and a seller does not have to agree to it, but it shows how much comes down to negotiation.
The change came out of a national settlement involving the National Association of REALTORS (NAR). Two parts of it affect Chicago buyers directly.
According to the National Association of REALTORS, agents working with buyers must have a signed written agreement in place before touring a home with you. The agreement states what your agent will be paid.
NAR's consumer guide to written buyer agreements is a helpful read before you sign. It also notes that you do not need an agreement to attend an open house or to ask an agent about their services.
Offers of compensation to buyer agents can no longer be published in the MLS, so you cannot see the number by looking at a listing. Sellers can still choose to pay. NAR's consumer guide to offers of compensation confirms those offers can still be made outside the MLS, through flyers, signs, emails, and conversations between agents.
A seller was never required to pay the buyer's agent, before or after this change. Because the offer used to appear on every MLS listing, many buyers assumed it was a rule. It was always the seller's choice.
Because the number is no longer posted publicly, the agreement you sign with your agent is now the document that sets it.
There are three possible arrangements. Which one applies depends on the seller and on how your offer is negotiated.
Arrangement | How it works | How often I see it |
|---|---|---|
The seller pays | The seller approves compensation to your agent, paid at closing out of their proceeds | What I have negotiated in every transaction I have closed since August 2024 |
The seller pays part | The seller covers some of it, and the rest is negotiated in the offer | Possible. It would be handled inside the offer. |
You pay directly | You pay your agent per your agreement | Has not happened in a single one of my transactions |
Many sellers agree to pay because it keeps them competitive. Chicago's North Side has limited inventory and strong competition for well-priced homes, as I covered in my post on Chicago homes selling above asking. When a seller covers the buyer agent's compensation, more buyers can afford to make an offer.
A seller may also cover only part of it, or nothing at all, which is their right. If that happens, you can negotiate it inside the offer, pay the difference yourself, or walk away and find another home. Decide with your agent how you would handle this before you start touring, not after you find a home you love.
NAR states that compensation "is not set by law and is fully negotiable." That was true before the settlement and is still true now.
Four terms in a buyer agreement are open to discussion:
What you can negotiate | Why it matters to you |
|---|---|
The rate | Sets the ceiling on what your agent can be paid from any source |
The length of the term | A shorter term lets you change course if the fit is wrong |
Which properties it covers | Every home in the area, or only the ones your agent shows you |
What you owe if you walk away | Decides whether leaving early costs you anything |
A buyer agreement is a contract, and the first draft you receive is a starting point. You can ask for changes. NAR also has a consumer guide to negotiating written buyer agreements.
A short initial term lets you see how an agent works before committing for months. You can extend it if the relationship is working.
Some agreements cover every home you might buy in the area. Others cover only specific properties your agent introduces you to. Know which one you are signing.
Ask this before it comes up on a specific house. A good agent will explain how they handle the gap, and some will agree in writing to accept whatever the seller offers.
Ask what ending the agreement requires and whether you would owe anything.
When you work with me, I automatically add a clause to the agreement that lets you cancel at any time if, for any reason, you are not satisfied with my service. Other agents may handle this differently, but I do not want any buyer to feel trapped into working with me just because they signed an agreement.
If you pay your agent directly, that money has to come from your own funds, and lenders have rules about how it is handled. Your lender should confirm how it fits your loan. My post on closing costs for Chicago buyers covers what else is due at closing.
Before anyone signs, I go through the agreement with them line by line, including the parts that protect the buyer. We cover the term, what happens if a seller offers less, how to cancel, and how it affects cash at closing.
I work with buyers across Lincoln Square, Ravenswood, Lakeview, Lincoln Park, and the rest of Chicago's North Side. If you are interviewing agents, my post on how to find the best buyer's agent in Chicago covers what else to look for.
Not necessarily. Since the rules changed in August 2024, I have been able to negotiate for the seller to pay my compensation in every buyer transaction I have closed, but a seller does not have to agree to it. If a seller will not cover it and you are not able to pay it yourself, you can walk away and find another home. Your agreement should spell out what happens if a seller covers less.
Yes, if you are working with an agent. Since August 17, 2024, agents must have a signed written agreement in place before touring a home with you. You can still negotiate the terms of that agreement before you sign it.
Yes. NAR states that compensation is not set by law and is fully negotiable. The rate, the term of the agreement, and what happens if a seller offers less are all open to discussion before you sign.
Not through the MLS listing, because offers of compensation can no longer be published there. Your agent can find out by asking the listing agent directly, and that should happen before you write an offer on the property.
If it happens, it is negotiated inside the offer along with price and terms, and some agents will also agree in writing to accept whatever the seller offers. If the gap cannot be closed, you can pay the difference or walk away and find another home. Ask your agent how they handle it before it is ever a live question.
It depends on your loan program and how the payment is structured, and this is a question for your lender rather than for me. If you are paying directly, plan for it alongside your down payment and closing costs.
No. A seller chooses whether to approve it, and the listing broker must have the seller's prior approval before any offer of compensation is made. Many sellers still agree to it, because covering it widens the pool of buyers who can afford to transact.
You can. Be aware that the listing agent represents the seller's interests in that transaction, and you would be handling inspection negotiations, contract deadlines, and attorney review on your own. My post on how to buy a home in Chicago as a first-time buyer walks through those steps.
Most buyers sign this agreement without anyone walking them through what it says. You have the right to understand it and to negotiate it before you sign.
I start every buyer relationship with that conversation. My consultation takes about an hour, and it means fewer surprises later.
Start by learning more about how I work with first-time home buyers in Chicago, or take my free Chicago Buyer's Course. You can also schedule a complimentary and confidential consultation here, or call or text me directly at 773.719.0989.
This post is for general informational purposes only and is not legal, financial, tax, or lending advice. Agreement terms and compensation arrangements vary by brokerage and by transaction, and rules may change. Always review any buyer representation agreement with your attorney and confirm financing questions directly with your lender before making a real estate decision.
Dee Savic is a Realtor with Baird & Warner, a 24+ year real estate professional, and a 27+ year Chicago resident with 300+ closed transactions. She specializes in helping buyers, sellers, downsizers, and relocation clients across Chicago's North Side.
Dee Savic
Realtor® | Baird & Warner
4553 N. Lincoln Ave, Chicago, IL 60625
773.719.0989
[email protected]
deesavic.com
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