There’s been a lot of conversation lately about who pays what in a real estate transaction—especially when it comes to broker commissions. While the rules about how fees are disclosed and negotiated have changed, the basic flow of money hasn’t.
To help clarify how the financial side of a deal actually works, I often use a simple, and surprisingly effective, analogy.
Think of a Real Estate Transaction Like a Poker Game
At this table, there are several key players:
- The Seller, who brings the “poker table”—the home itself.
- The Buyer, who brings all the chips—these represent the funds used to buy the home.
- And a handful of essential participants—agents, escrow officers, title reps—who bring no chips of their own, but help keep the game running fairly and smoothly.
Once the Buyer and Seller agree to play (i.e., they go into contract), the Buyer lays their chips on the table. Over the course of the “game,” those chips are redistributed:
- A majority go to the seller in exchange for the property.
- Some go to the real estate professionals facilitating the transaction.
- Others cover closing costs and necessary services like title and escrow.
At the end of the game, the Buyer walks away with the table (the home), and the Seller walks away with the majority of the chips.
So Who’s Really Paying?
No matter how the fees are labeled, the Buyer is the only party bringing new money into the transaction. Even if the contract includes a term that says the “Seller will pay X,” those funds originate with the Buyer—it’s just a matter of how the Buyer’s money is allocated.
That’s why it’s more accurate to say the Seller isn’t paying the Buyer’s agent, but rather agreeing to a distribution of the Buyer’s funds as part of the deal.
What Sellers Sometimes Ask (and Why the Analogy Still Holds)
Even with this analogy, some sellers raise valid points. Here’s how to think about them:
“But I’m netting less if I ‘pay’ the Buyer’s broker.”
Yes—how the Buyer’s funds are distributed does affect your bottom line. But you’re not writing a separate check to the Buyer’s agent. You’re simply agreeing to a price and terms that reflect the Buyer’s total offer. Most of the time, Buyers factor these fees into their offer price anyway.
“Shouldn’t the Buyer pay their agent directly?”
In theory, yes. But in practice, most Buyers roll these costs into the total purchase price so they can finance them. This keeps more cash in their pocket and simplifies the transaction. What matters is the total deal value, not how the chips are passed around.
“It sounds like I don’t bring anything to the game.”
Quite the opposite—you bring the most valuable item: the table itself. There’s no transaction without your home. But in terms of cash, it’s the Buyer who funds the exchange. That’s all the analogy is meant to illustrate.
“Why Is the Buyer’s Agent Fee Showing Up in the Offer?”
A lot of Sellers are surprised when they see a line item in the Buyer’s offer requesting that the Seller pay the Buyer’s obligation to compensate their agent. That’s because this wasn’t something Sellers used to see—Buyer broker compensation was typically built into the listing agreement and handled behind the scenes.
With the recent rule changes, that fee is now a negotiated term within the Buyer’s offer. It’s not something the listing agent is setting or negotiating—it’s simply part of the offer terms the Buyer is presenting. Like any other line item, you have the right to accept, counter, or decline. The key is understanding how those terms impact your net proceeds so you can make a fully informed decision.
The Bottom Line
Everyone at the table plays a role—but only one party brings the chips. Whether you’re buying or selling, understanding how the funds move through the deal gives you clarity, confidence, and the ability to negotiate from a place of knowledge.
Ready to Get Started?
If you’re ready to embark on the journey of buying a second home in Sonoma County, contact Tim DeBellis for the guidance you can count on. From luxury homes in Healdsburg, CA, to gorgeous Santa Rosa properties, Tim knows all the top tips for buying your second home as seamlessly as possible. Get started today!