There are theoretical arguments that debate whether the buyer or the seller is actually absorbing the fee. That becomes a matter of perspective. Is the cup half empty or half full? Some state that the buyer pays since he/she brings the dollars to the table. Others say, the seller pays. The HUD closing statement lists it on the seller side. I say that the transaction pays the fees, and that neither buyer or seller will participate unless the net number is acceptable. When the transaction makes sense to the parties, a deal is made.
In practicality, the seller pays the fees to both the listing broker and buyer broker, and generally those commissions are earned at contract presentation, but paid at closing.
Buyers often work under contract with their buyer agents. The fee that the buyer agrees to pay their buyer agent may be more than your offer of co-op compensation. If so, an offer may sometimes include that additional fee. It is similar to a buyer asking a seller to pay closing costs or some other transaction cost. If that happens, simply look at your net number, your likelihood of getting another contract at a higher net, and determine whether the transaction makes sense
Commission is always negotiable, and the Department of Justice even condones it as good competitive behavior among agents. The seller does pay the commission that covers both agents. But in a way, the buyers also pay for it since commission rates are typically accounted for in the selling price.
Many agents are willing to be flexible on commission rates, but it's not something they like to advertise. And most clients are not very capable or comfortable negotiating rates.
At UpNest (http://www.upnest.com), we created an online marketplace where home sellers can confidentially submit their homes, and multiple top local agents will compete to obtain your listing. Some agents lower their commission rates to stand out, and every agent that submits a proposal is an experienced agent, so it's not the same as working with a low grade discount brokerage.
Hope that helps!
Many Buyer's agents will refuse this offered compensation to avoid any inference of compensation being paid directly from the Seller, especially since offered compensation is normally in the form of a percentage of the agreed upon sale price. A good Buyer's agent may be able to negotiate a better price for you, and would consequently reduce his commission. In this case, your buyer's offer should be written to respectfully refuse the compensation offered by the Seller, and:
(a) propose a fee to be paid from the sale proceeds by the Buyer, as a convenience to the sale, or
(b) separately agree to a figure to be paid directly from the Buyer at the closing in a seperate contract.
If this is the case in an offer you receive for your home, your agency may return the portion of the offered compensation directed towards the Buyer's agent to help balance your transaction costs, since it is no longer needed to compensate the cooperating Agency.
In either case, the homes market value should not be affected by the change, and your net proceeds as a Seller remain relatively constant.
One way to look at it is this:
The buyer is supplying the money to purchase your property. So in essence they are paying for everything!
Actually, then, if you want to look at it that way, the buyer is supplying the money for you to distribute to the listing broker.
Techinically, the proceeds from the sale are held in an escrow account until all the appropriate paperwork is completed, then "everyone receives their payment". And the buyer receive the grant deed for the property (and hopefully the keys and garage door opener).
The best way to see this is to ask your Realtor for an "Estimate of Seller's Net Proceeds", which will list in detail, line by line, what happens to the proceeds from the sale. You can ask for this BEFORE you put your home on the market.
Hope this helps.