If you’ve started looking at homes in Sioux Falls this year, you’ve probably run into a form you didn’t expect: a buyer agency agreement that asks you to agree — in writing, up front — to pay your agent.

That form is new for a lot of buyers, and it raises a fair question. If you’re already paying a mortgage, a down payment, and closing costs, are you now on the hook for a real estate commission too?

Here’s the short version. In most Sioux Falls transactions, the seller still ends up covering your agent’s fee. What changed is that the payment is no longer guaranteed and hidden in the background — it’s negotiated openly, and you need to understand how it works before you write an offer.

Let me walk you through it the way I walk my own clients through it.

What changed in August 2024 — and what didn’t

For decades, the seller paid one commission — usually 5% to 6% — and the listing broker split it with the buyer’s agent. Buyers rarely saw a bill, because the whole thing came out of the seller’s proceeds at closing.

A national legal settlement changed the mechanics starting August 17, 2024. Two things are different now:

  • You sign a written agreement before touring homes. Your buyer’s agent has to have a signed buyer agency agreement with you before showing you a property. That agreement states exactly what the agent will be paid — a percentage, a flat fee, or how it’s calculated — and it says you’re ultimately responsible for making sure your agent gets paid.
  • The buyer’s-agent fee is no longer advertised on the MLS. Sellers can still offer to pay your agent, but they can’t post that offer on the multiple listing service anymore. It gets communicated and negotiated separately — often as part of your offer.

Here’s what did not change. Sellers can still — and frequently do — agree to pay the buyer’s agent. In South Dakota, most sellers still offer a buyer-agent concession because it widens the pool of buyers who can afford their home. So the money often flows exactly the way it always did. The difference is that now it’s spelled out and negotiated in the open instead of assumed.

What a buyer’s agent actually costs in Sioux Falls

Total real estate commission in South Dakota averages around 5.5% of the sale price, split between the listing side and the buyer side. The buyer’s-agent portion typically runs 2.5% to 3%.

On the mid-2026 Sioux Falls median of about $345,000, that looks like this:

  • 3% = about $10,350
  • 2.75% = about $9,500
  • 2.5% = about $8,625

That’s the number written into your buyer agency agreement. It is not automatically a bill you pay out of pocket — it’s the fee your agent has earned, and the agreement’s job is to make sure that fee gets covered from somewhere at closing.

The rate is negotiable. Nothing in South Dakota law sets it, and you and your agent settle on it before you start looking. What you don’t want to do is sign an agreement without reading the number and the term length — because that number is what determines your exposure if a seller won’t cover the full amount.

If you want to see how this fits alongside everything else you’ll owe at the closing table, I broke the full picture down in my guide to buyer closing costs in Sioux Falls.

Who actually pays — four scenarios you’ll see

This is where it gets practical. Your agreement says you owe, say, 3%. What happens next depends on the seller. Here are the four situations that actually come up in the Sioux Falls market.

1. The seller offers to pay the full amount. This is still the most common outcome here. The seller’s agent tells us up front that the seller will cover 3% for the buyer’s side. Your agreement is satisfied, and you pay nothing toward commission. This happens on a large share of resale listings in Brandon, Harrisburg, Tea, and around Sioux Falls.

2. The seller offers less than your agreement. Say the seller offers 2.5% but your agreement says 3%. That leaves a 0.5% gap — about $1,725 on a $345,000 home. You can pay that gap out of pocket, ask your agent to reduce their fee to match, or write the gap into your offer as a seller concession and let the seller decide.

3. The seller offers nothing. In a tight seller’s market — and Sioux Falls has been running around a three-to-four-month supply — some sellers with strong leverage decline to offer anything. Now the full fee is on the table for you to solve: cover it yourself, negotiate your agent down, or ask for a concession in your offer and risk a weaker position against competing buyers.

4. You ask for it in your offer. The cleanest tool you have is the offer itself. You can ask the seller to pay your agent’s fee as a concession right in your purchase agreement. It’s negotiated like price, closing costs, or a repair credit. On a home that’s been sitting, sellers often say yes. On a fresh listing with three offers, they may not.

The takeaway: you’re rarely writing a separate check to your agent. In almost every Sioux Falls deal I see, the fee still gets covered by the seller or folded into the transaction. But you need an agent who negotiates that up front, because the days of assuming it are over.

One more South Dakota detail worth knowing — buyers here don’t pay the state transfer fee either. That’s the seller’s cost under SDCL 43-4-21, running $0.50 per $500 of value. And South Dakota closings run through a title company, not an escrow company like you’d see out west. If you’re weighing the seller’s side of the commission math, my breakdown of what it costs to sell a house in Sioux Falls shows where every dollar goes.

New construction plays by different rules

If you’re touring new builds in the Tea, Harrisburg, or northwest corridor, the commission conversation shifts.

Builders like Allen Homes, Van Buskirk, and Cordes typically pay the buyer’s agent out of their marketing budget — but only if your agent is registered on your first visit to the model or sales office. Walk in alone, and you can forfeit representation while the builder’s on-site rep, who works for the builder, handles the deal for both of you.

The fee still comes from the builder in most cases. The catch is timing. I cover the full playbook in do you need a realtor for new construction — read it before you set foot in a model home.

Frequently asked questions

Do I have to sign a buyer agency agreement in South Dakota?

Yes, if you want a licensed agent to show you homes. Since August 2024, an agent has to have a signed buyer agency agreement with you before touring a property. Read the compensation amount and the length of the term before you sign — both are negotiable.

Can I negotiate what my buyer’s agent charges?

Absolutely. No law in South Dakota sets the rate. You and your agent agree on it — a percentage, a flat fee, or a set amount — before you start looking. A good agent will explain exactly what you’re getting for that fee.

What happens if the seller won’t pay my agent?

You have three options: pay the difference out of pocket, ask your agent to reduce their fee, or write the fee into your offer as a seller concession. Most Sioux Falls sellers still offer to cover the buyer’s agent, so this comes up less often than the headlines suggest — but you want an agent who raises it before you fall in love with a house.

Does the buyer pay closing costs and commission both?

Buyers pay closing costs — typically 2% to 5% of the price in Sioux Falls — but commission is separate and usually covered by the seller. Buyers also don’t pay the South Dakota transfer fee; that’s the seller’s cost. So in a typical deal, your out-of-pocket is your down payment plus closing costs, not a commission check.

Is it cheaper to buy a home without an agent?

Rarely, and it’s riskier than it sounds. The seller’s agent represents the seller, not you, so going unrepresented means negotiating price, inspection, appraisal, and title deadlines against a licensed professional with no one on your side. The seller’s listing agreement often already accounts for a buyer-side fee, so skipping an agent doesn’t automatically put that money in your pocket.

The bottom line

Do buyers pay their agent in Sioux Falls? Usually not directly — the seller still covers it in most deals. But since the 2024 changes, nothing is automatic, and the buyer agency agreement you sign means you need an agent who negotiates that fee up front and in writing.

That’s exactly the conversation I have with every buyer before we tour a single home, so there are no surprises at the closing table.

If you’re starting your search and want to understand what you’ll actually owe — and what the seller should cover — call or text me at 605-201-2846, or reach out through siouxfallsgreathomes.wordpress.com. I’ll walk you through the numbers for your situation before you write an offer.

About Jeff Merrill

Jeff Merrill leads The Jeff Merrill Team, powered by eXp Realty, serving Sioux Falls and the surrounding South Dakota communities of Madison, Mitchell, Canistota, and beyond. He helps motivated buyers, sellers, and new agents cut through the hype in real estate with honest guidance, hands-on mentorship, and a track record of real results. Connect with Jeff at siouxfallsgreathomes.wordpress.com or call 605-201-2846.