Who Pays the Buyer’s Agent Commission in Sioux Falls?

Who pays the buyer’s agent commission in Sioux Falls?

In Sioux Falls, there’s no longer a single automatic answer. Since the National Association of Realtors settlement took effect in August 2024, sellers can no longer advertise a buyer’s agent commission on the MLS, and buyers must sign a written agency agreement — spelling out their agent’s fee — before touring homes. Commission is now negotiated separately on each side of the deal. Sellers still commonly offer to cover part or all of the buyer’s agent fee (South Dakota buyer-agent compensation averages about 2.88%, and total commissions usually run 5% to 6%), but it’s a negotiation now, not a default.

By Tyce Ortman — August 10, 2026

This is one of the most common questions buyers and sellers in the Sioux Falls area are asking right now, and for good reason. The rules changed in 2024, the headlines were confusing, and a year and a half later most people still aren’t sure who actually writes the check. Here’s how it really works in a Minnehaha or Lincoln County transaction today.

What changed — and what didn’t

For decades, the answer was simple: the seller paid a total commission, and the listing broker split it with the buyer’s agent. That split was posted on the MLS, so buyers rarely thought about it. The 2024 settlement ended that practice.

Two things are different now:

• The buyer’s agent fee is no longer advertised on the MLS. Sellers can still offer to pay it — they just can’t broadcast it through the listing service the way they used to.
• Buyers sign a written agreement before touring. In South Dakota, before an agent shows you a home, you sign a buyer agency agreement that states exactly what your agent will be paid and confirms the fee is negotiable.

What didn’t change: someone still has to pay the buyer’s agent, and in most Sioux Falls deals, that money still ultimately comes out of the sale. The difference is that it’s now an open conversation on both sides instead of a fixed number baked into the listing.

How it works if you’re buying

Before you tour your first home with an agent, you’ll sign a buyer agency agreement. Think of it as the buyer’s version of a listing contract. It spells out the services your agent provides and the fee they’ll earn — commonly around 2.5% to 3% of the purchase price here, though it’s negotiable and must be a specific, non-open-ended number.

That doesn’t mean you’re writing a separate check at closing. In practice, most Sioux Falls sellers still offer to cover the buyer’s agent fee, so it’s built into the transaction. Your agent’s job is to negotiate that coverage into your offer. If the seller covers the full fee, your out-of-pocket cost is unchanged from the old system. If they only cover part, the gap becomes a negotiating point — one more number to work through alongside price, repairs, and closing costs.

This matters most for your cash to close. A buyer’s agent fee can’t be rolled directly into your mortgage, so if the seller doesn’t cover it, you’d need to bring it in cash. That’s exactly why getting the seller to pay it — or credit it — is part of a well-built offer. If you’re mapping out your upfront costs, it fits right alongside your cash needed to buy in Sioux Falls and your loan’s closing costs.

A quick tip before you fall in love with a house: get pre-approved first. Knowing your numbers makes the commission conversation far easier, because you’ll know how much room you have to absorb a fee if a seller won’t budge. First-time buyers should also check the down payment assistance programs available in Sioux Falls — every dollar of help frees up room elsewhere.

How it works if you’re selling

Here’s the question I hear most from sellers right now: “Do I still have to pay the buyer’s agent?”

The short answer is no — you’re not required to. The longer answer is that most sellers still choose to, and there’s a practical reason why.

When you offer to cover the buyer’s agent fee, you widen your buyer pool. In a market where inventory is tight but buyers are watching every dollar — Sioux Falls sat around 892 active listings this summer, down roughly 30% from a year ago, with a median sale price near $335,000 — you want as many qualified buyers able to write a strong offer as possible. A buyer who has to come up with an extra 2.5% to 3% in cash for their own agent is a buyer with less room to compete on your price.

So the decision isn’t “pay or don’t pay.” It’s “what’s the smartest way to position this offer of compensation to net you the most at closing?” Some sellers offer full coverage up front. Others signal flexibility and let it come up in negotiation. The right move depends on your price point, your home’s condition, and how much competition your listing will face.

Whatever you decide, it flows straight into your bottom line. Commission is the single largest cost in most home sales, so it belongs in the same conversation as every other number when you calculate what you’ll actually net selling your Sioux Falls home.

The numbers, grounded in South Dakota

A few figures to anchor the conversation:

• Total commission: Typically 5% to 6% of the sale price in Sioux Falls when both agents are paid — all of it negotiable.
• Buyer’s agent share: Commonly 2.5% to 3%, averaging near 2.88% across South Dakota.
• On a $335,000 home: A 2.88% buyer’s agent fee is roughly $9,650. A full 5.5% total commission is about $18,400.
• Don’t confuse it with the SD transfer fee: South Dakota’s real estate transfer fee is separate and small — $0.50 per $500 of price, about $335 on a median home, paid by the seller. That’s a closing cost, not a commission.

Every one of these is a starting point, not a fixed rate. Commission is negotiable by law, and the right number depends on the property and the plan behind it.

Frequently asked questions

Do sellers still pay the buyer’s agent in Sioux Falls?

Often, yes, but it’s no longer automatic. Sellers can still offer to cover some or all of the buyer’s agent fee as a concession, and many do because it widens the buyer pool. It’s now negotiated in the listing agreement and the purchase contract rather than advertised on the MLS.

How much is a buyer’s agent commission in South Dakota?

Buyer’s agent compensation commonly runs around 2.5% to 3% of the purchase price, averaging near 2.88%, though it’s fully negotiable. Total commissions on a Sioux Falls sale typically fall in the 5% to 6% range when both agents are paid.

Do I have to sign a buyer agency agreement before touring homes?

Yes. Since August 2024, South Dakota buyers must sign a written buyer agency agreement before touring a home with an agent. It states exactly what the agent will be paid and confirms the fee is negotiable. You don’t need one just to talk to an agent at an open house.

Can the buyer’s agent fee be rolled into the mortgage?

Not directly. Loans are based on the purchase price, so the fee can’t simply be added on. The common workaround is asking the seller to cover it through a concession, which keeps it out of your upfront cash to close.

Is commission negotiable?

Always. There’s no set rate in South Dakota, and the written agreements now required for buyers specifically state that broker fees are fully negotiable. What matters more than the headline percentage is the strategy behind how the fee is structured and offered.

The bottom line

Since 2024, who pays the buyer’s agent in Sioux Falls is a negotiation, not a default — and getting that negotiation right can swing thousands of dollars for both buyers and sellers. The old fixed answer is gone; a smarter, deal-specific one has taken its place.

If you’re buying, grab my free Sioux Falls Buyers Guide — it walks through how commission, cash to close, and offers fit together. If you’re selling, this is exactly the kind of number I map out with clients before we ever set a list price. Either way, if you’re thinking through your own situation, I’m happy to walk you through the numbers. Reach out anytime.

About Tyce Ortman
Tyce Ortman is a residential real estate agent with the Jeff Merrill Team at eXp Realty, serving Sioux Falls, South Dakota and surrounding communities including Brandon, Harrisburg, and Tea. He works with both buyers and sellers, guiding them from first search or listing all the way through closing.