Tennessee guide

Compensation Disclosure Obligations for Tennessee Licensees

In Tennessee, your real estate agent has to tell you in writing how they are getting paid before you close on a home.

Reading as buyer.

TL;DR

In Tennessee, your real estate agent has to tell you in writing how they are getting paid before you close on a home. Your buyer representation agreement spells out the exact amount you have agreed to pay your agent for their work. If the seller's side is also chipping in toward your agent's pay, your agent has to explain how that money interacts with what you owe so there are no surprises at closing.

Before you start — 7 things to know

  • In Tennessee, you have a legal right to know exactly how your buyer's agent is being paid, and any hidden compensation can be a violation of the agent's duty to you under .

  • Your written buyer representation agreement must state the specific dollar amount or percentage you have agreed to pay your agent, so read that line carefully before you sign.

  • Since August 2024, offers of compensation from the seller's side are no longer posted in the , so your agent has to find out and tell you in writing if the seller is contributing toward your agent's fee.

  • If the seller's contribution does not cover your agent's full fee, you are on the hook for the difference out of pocket, and your agent has to explain that gap to you before closing.

  • If your agent gets a referral fee from a lender, title company, or home warranty provider they send you to, they must disclose that payment to you in writing under Tennessee law.

  • A buyer's agent who accepts payment from anyone other than you without telling you can face discipline from the Tennessee Real Estate Commission, even if the payment is legal under federal rules.

  • Every compensation disclosure your agent gives you in Tennessee should be in writing and kept in the transaction file, so ask for a copy for your own records.

The timeline — step by step

  1. Before you tour homes with an agent in Tennessee, you sign a written buyer representation agreement that lists the exact compensation amount you have agreed to pay.

  2. When you find a house you like, your buyer's agent contacts the listing side to find out if any seller-paid compensation is being offered, since this information is no longer published in the .

  3. Your agent gives you a written disclosure showing how much the seller is offering and how that amount lines up with what your buyer representation agreement says you owe.

  4. If there is a gap between what the seller offers and what you have agreed to pay, you and your agent decide whether to ask the seller to cover the difference in your offer or to pay it out of pocket.

  5. Before closing, your agent discloses in writing any referral fees, bonuses, or other compensation they will receive from lenders, title companies, or third parties tied to your purchase.

  6. At closing, the final settlement statement lists exactly how much your buyer's agent is being paid and by whom, and you should compare it against the disclosures you signed earlier.

Common questions

How do I find out how my buyer's agent is being paid in Tennessee?
Your buyer representation agreement is the first place to look, because Tennessee requires it to state the specific compensation amount you have agreed to pay your agent. Your agent then has to tell you in writing if the seller's side is contributing any money toward that fee.
Do I have to pay my buyer's agent directly in Tennessee?
Sometimes yes, and sometimes the seller covers part or all of it. Your buyer representation agreement sets the amount, and if the seller's contribution falls short, you owe the difference out of pocket unless you negotiate a seller credit into your offer.
What happens if my agent does not tell me about a referral fee they are getting?
In Tennessee, an undisclosed referral fee from a lender, title company, or other settlement provider can violate the Tennessee Real Estate Broker License Act and TREC conduct rules. You can file a complaint with the Tennessee Real Estate Commission, which can discipline the agent.
Can my buyer's agent take a bonus from the seller without telling me?
No. Tennessee licensees have an affirmative duty to disclose any compensation they receive in a transaction, including bonuses offered by the seller or listing brokerage. The disclosure must be in writing and given to you before closing.
Why is buyer-agent compensation no longer listed in the MLS?
After the settlement that took effect in August 2024, offers of buyer-agent compensation cannot be published in the . In Tennessee, your buyer's agent now contacts the listing side directly and discloses the result to you in writing.
Should I ask for my compensation disclosures in writing?
Yes, and your Tennessee agent should already be giving them to you in writing as part of their duty of disclosure. Keep copies of the buyer representation agreement, any seller-contribution disclosure, and any referral-fee disclosures in your own records.

Glossary

3 terms
RECAD — Real Estate Consumer's Agency and Disclosure
The form that lays out, in plain terms, the agency relationship between you and the agent — whether they represent you, the seller, or both.
NAR — National Association of Realtors
The national trade group for real-estate agents. The 2024 NAR settlement is the legal deal that changed how buyer's agents get paid.
MLS — Multiple Listing Service
The shared database agents use to list and find homes for sale. Most homes you'll see online started here.

Sources

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