When selling a home in Memphis, most homeowners expect to pay some type of real estate commission. But what many don’t realize is that part of those costs often go toward the buyer’s agent, not just their own listing agent.
Understanding buyer’s agent fees, how they work, and how alternative sales methods—like cash offers—can help you avoid them, is essential for maximizing your net proceeds.
This guide breaks down buyer vs. seller agent fees, shares a real Memphis example with a net sheet, and explains how sellers can reduce or eliminate these costs without sacrificing a successful closing.
What Are Buyer’s Agent Fees?
In a traditional real estate transaction, there are usually two agents involved:
- Listing Agent – Represents the seller, helps market the property, manages showings, negotiates offers, and guides the seller through the process.
- Buyer’s Agent – Represents the buyer, shows them homes, writes offers, and negotiates on their behalf.
The seller typically pays the commission for both agents. This is usually a 5%–6% commission on the sale price, which is then split between the listing agent and the buyer’s agent.
For example, if you sell your Memphis home for $300,000 with a 6% total commission, you’d pay $18,000 in commissions. If the listing agent gets 3% and the buyer’s agent gets 3%, that’s $9,000 to each side—all paid by you, the seller.
While it may seem counterintuitive to pay someone who’s technically representing the other party, this structure has been the industry standard for decades.
Why Buyer’s Agent Fees Matter for Memphis Sellers
Buyer’s agent fees directly reduce the net amount you walk away with at closing. Even if you receive a full-price offer, the final figure you pocket will be lower once commissions and closing costs are subtracted.
Here’s why this matters in Memphis:
- Older housing stock often requires inspection repairs, further cutting into proceeds.
- Sellers sometimes offer higher buyer’s agent commissions to make their listings more competitive, especially in slower markets.
- Unlike closing costs or repairs, commission percentages are often locked in when you sign the listing agreement—so they can’t easily be changed later.
These factors make it critical for Memphis homeowners to fully understand what they’re paying and why.
Buyer’s vs. Seller’s Agent Commission: Key Differences
| Feature | Listing Agent | Buyer’s Agent |
|---|---|---|
| Who they represent | Seller | Buyer |
| Paid by | Seller | Seller |
| Typical Memphis fee | 2.5%–3% | 2.5%–3% |
| Role | Markets home, negotiates for seller | Finds home, negotiates for buyer |
| Who benefits | Helps seller get best deal | Helps buyer get best deal |
As you can see, the buyer’s agent commission is essentially a marketing expense paid by the seller to attract buyers. In some cases, buyers’ agents may steer clients toward homes offering higher commissions, which is why sellers often feel pressure to keep the buyer’s side competitive.
Real Memphis Example: Traditional Sale vs. Cash Offer
Consider this real-world comparison between a traditional agent sale and a direct cash buyer offer for the same Memphis home:
| Category | Traditional Sale | Cash Buyer Sale |
|---|---|---|
| Sale Price | $300,000 | $285,000 |
| Listing Agent Commission (3%) | -$9,000 | $0 |
| Buyer’s Agent Commission (3%) | -$9,000 | $0 |
| Closing Costs (2%) | -$6,000 | $0 |
| Repairs | -$4,000 | $0 |
| Net to Seller | $272,000 | $285,000 |
| Timeline | 45–60 days | 7–14 days |
Even though the cash offer was $15,000 less than the traditional offer price, the seller netted $13,000 more by avoiding commissions, repair costs, and extended timelines.
Many homeowners choose to work with cash home buyers in Memphis to achieve this kind of simplified sale.
How Cash Buyers Eliminate Buyer’s Agent Fees
Cash buyers typically don’t use buyer’s agents. They purchase properties directly, often for investment or resale purposes. Here’s why this matters:
- No buyer’s agent commission: You’re not paying someone to represent the buyer, because the buyer is a company or individual investor dealing directly with you.
- No listing agent needed: In some cases, sellers skip listing agents entirely and work directly with the buyer.
- No marketing costs: Because the buyer is direct, there’s no need for MLS listings or buyer incentives.
- No inspection or appraisal delays: Cash buyers often purchase as-is, which removes the risk of repair negotiations or financing setbacks.
This approach can dramatically reduce transaction costs and timelines—especially for sellers who prioritize net proceeds and speed over holding out for the highest offer price.
Legal & Market Context in Tennessee
In Tennessee, commissions are negotiable, but the structure of seller-paid buyer’s agent fees is deeply ingrained in the market. Sellers sign a listing agreement that specifies commission rates, and most brokers follow industry norms.
The Tennessee Real Estate Commission oversees agent licensing and consumer protection, ensuring transparency in how fees are disclosed. Sellers have the legal right to negotiate commissions, but many don’t realize it’s an option.
Recent legal cases nationwide have challenged traditional commission structures, which could affect how buyer’s agent fees are handled in the future. For now, though, Memphis homeowners typically remain responsible for these costs in conventional transactions.
FAQs About Buyer’s Agent Fees in Memphis
Q1: Do sellers have to pay buyer’s agent fees?
In most traditional transactions, yes. It’s customary for sellers to cover both listing and buyer’s agent commissions.
Q2: Can I negotiate the buyer’s agent fee?
Yes. You can offer less than the standard 2.5%–3%, but keep in mind it may affect how competitive your listing is with agents representing buyers.
Q3: Do cash buyers involve buyer’s agents?
Usually not. Cash buyers typically purchase directly, eliminating this cost entirely.
Q4: What happens if I don’t use a listing agent?
You can sell by owner or directly to a cash buyer, but you’ll need to handle marketing, legal paperwork, and negotiations yourself if not using professionals.
Q5: Will commission structures change soon?
There are national lawsuits and evolving policies that may impact commission rules, but as of now, traditional structures still apply in Tennessee.
Final Thoughts
Buyer’s agent fees are a significant but often overlooked cost of selling a home in Memphis. By understanding who gets paid, how commissions are split, and how these fees affect your net proceeds, you can make smarter financial decisions.
Traditional sales have their place—especially for homeowners who want to list widely and attract retail buyers. But for sellers who value speed, simplicity, and higher net proceeds, cash buyers offer a powerful alternative. By bypassing agents and working directly with buyers, you can often close faster and keep more of your home’s value.
Author Bio
Written by Sarah Thompson, Lead Acquisition Specialist at Your Neighborhood Home Buyers. With over 15 years of experience in Memphis real estate, Sarah helps homeowners navigate commission structures and choose the best selling strategy. Learn more about our team.