In Utah, who pays realtor fees depends on what the buyer and seller write into their contracts. The long-standing default is that the seller pays the full commission at closing and that payment covers both agents. Since the National Association of Realtors settlement took effect on August 17, 2024, that outcome is no longer automatic. Buyers now sign written agreements committing them to pay their own agent a specific amount, and if the seller doesn’t agree to cover it in the purchase contract, the buyer pays the difference out of pocket.
The Traditional Seller-Pays-Both Model
For decades the pattern was simple. A seller signed a listing agreement setting a total commission, often 5% to 6% of the sale price. The listing brokerage kept part of that and offered the rest to whichever brokerage brought the buyer. Both agents got paid, and the money came entirely from the seller’s side of the closing table.
That model still exists and is still common. Per-side rates in Utah currently run roughly 2.5% to 3% of the sale price, though flat-fee and discount arrangements show up more often than they used to. No Utah law sets a minimum or maximum commission, and no rule forces a seller to offer any particular amount to a buyer’s brokerage. Everything is negotiable.
What Changed in August 2024
The NAR settlement reshaped how buyer-agent compensation gets communicated and committed. The key practice changes took effect on August 17, 2024, and they apply to every MLS-listed property in Utah.1National Association of REALTORS®. National Association of Realtors Provides Final Reminder of August 17 NAR Practice Change Implementation
Listing agents can no longer advertise any offer of compensation to buyer’s agents on an MLS platform.2National Association of REALTORS®. NAR Reaches Agreement to Resolve Nationwide Claims Brought by Home Sellers Before the settlement, a listing might openly state “2.8% offered to buyer’s brokerage.” That line is gone. A buyer’s agent doesn’t know from the listing whether the seller is willing to pay them anything at all.
Compensation now has to be worked out off the MLS, either through direct contact between brokerages or as a term written into the buyer’s offer.3National Association of REALTORS®. Communicating Offers of Compensation The practical effect is that who pays the buyer’s agent is now an explicit negotiation on every transaction instead of a quiet assumption built into the listing.
Buyer-Broker Agreements and Buyer Liability
Under the settlement, a buyer’s agent must have a signed written agreement with the buyer before showing homes. Utah already required written agency agreements, and the settlement added a hard requirement that the compensation amount be a specific number rather than an open-ended range.4Utah Office of Administrative Rules. Real Estate Licensing and Practices Rules Most agreements use a percentage of the sale price or a flat dollar amount, and they must carry a definite expiration date.
The buyer’s obligation under this agreement is real. If the seller doesn’t contribute enough to cover the buyer’s agent fee, the buyer owes the rest. The agreement acknowledges that a third party, including the seller’s brokerage, may satisfy the obligation, but if nobody else pays, the buyer is contractually responsible.5Utah Association of REALTORS®. Real Estate Brokerage Compensation Agreement The agreement also caps total compensation: a buyer’s agent cannot accept more from all sources combined than the amount specified in the buyer-broker agreement.
If you’re planning to tour homes with an agent, read the compensation section of that agreement carefully before you sign. The percentage or dollar figure in there is what you’ve personally agreed to pay if no one else covers it.
How It Gets Settled in the Purchase Contract
Utah’s standard Real Estate Purchase Contract has a dedicated section for buyer’s agent compensation. Section 4.3(e) lets the buyer and seller agree on a “Seller’s Compensation Contribution” to the buyer’s brokerage, entered as either a percentage of the purchase price or a flat dollar amount.6Utah Department of Commerce. Real Estate Purchase Contract If neither box is checked and no amount is entered, the seller hasn’t agreed to pay anything toward the buyer’s agent, and the buyer owes the full amount under the buyer-broker agreement.
This is where almost all of the real negotiation around commission now happens. A buyer’s agent will typically include a request for a seller contribution as part of the offer. The seller can accept it, counter it, or reject it the same as any other term. In a competitive market, asking the seller to cover your agent weakens the offer. In a slower market, sellers often offer it proactively to pull in more buyers.
The contract also blocks double-dipping. Any seller contribution, combined with any payment flowing from the seller’s brokerage, cannot exceed the amount the buyer agreed to in the buyer-broker agreement.7Utah.gov. New Approved REPC Language 4.3 Fees/Costs/Payment Obligations The compensation provision survives closing, so a payment dispute can be pursued after the deal is done.
One note for anyone looking at for-sale-by-owner listings: the same contract provision applies, but there’s no listing agent in the picture. The only commission at issue is what the buyer owes their own agent, and FSBO sellers sometimes refuse to contribute. If you’re shopping and some of your targets are FSBO, work out with your agent in advance how you’ll handle a seller who won’t pay.
How the Money Moves at Closing
Commission payments are processed during settlement, usually by a title company or escrow officer, and they appear as line items on the Closing Disclosure. Both parties see exactly what’s being paid and to whom.
If the seller agreed to a compensation contribution, that amount comes out of the seller’s proceeds. If the buyer owes their agent directly, the fee shows up on the buyer’s side of the settlement statement as an additional closing cost. In most transactions you’ll see both: the seller pays the listing brokerage under the listing agreement, and the seller also pays some or all of the buyer’s agent fee under the purchase contract.
Utah law routes those payments through each agent’s principal broker rather than directly to the agent. Under Utah Code § 61-2f-305, an associate broker or sales agent generally cannot accept payment from anyone other than the principal broker they’re affiliated with, with a narrow exception for a payment instrument prepared by the title company under the principal broker’s written instructions.8Utah Legislature. Utah Code 61-2f-305 – Restrictions on Commissions The title company disburses to each brokerage, and each brokerage pays its agent under their internal split.
VA Loan Buyers
Veterans using VA loans face different rules. VA regulations have historically prohibited veterans from paying real estate brokerage charges. After the NAR settlement removed MLS-based compensation offers, the VA issued a temporary variance allowing veterans to pay reasonable buyer-broker fees in markets where listing brokers can no longer set buyer-agent compensation through the MLS.9Veterans Benefits Administration. VA Circular 26-24-14
Two limits matter. Buyer-broker charges cannot be rolled into the VA loan amount, so the veteran either pays them separately at closing or negotiates for the seller to cover them. And when a seller does cover the buyer-broker fee for a VA buyer, the VA does not count that payment as a seller concession, which means it doesn’t eat into the VA’s cap on seller concessions for other closing costs.
Tax Treatment for Both Sides
Whoever pays the commission gets some tax recognition for it. For sellers, real estate commissions are selling expenses that reduce the taxable gain on the sale. IRS Publication 523 lists sales commissions as costs that lower the amount realized from a home sale.10Internal Revenue Service. Publication 523 (2025), Selling Your Home Sell for $500,000, pay $28,000 in total commission, and the amount realized drops to $472,000 before you compare it to your adjusted basis.
For most homeowners the capital gains exclusion ($250,000 for single filers, $500,000 for married couples filing jointly) already wipes out any tax on the sale. But for sellers with heavy appreciation, investment property, or a short holding period, every dollar of deductible selling expense counts. Keep the closing statement.
Buyers who pay their own agent don’t get an immediate deduction, but the amount may be added to the cost basis in the home, which can reduce a future capital gain when the home is sold.