And when you sold the house, the realtor was compensated from the proceeds of the sale received by the seller, not paid by the buyer. She seemed to be working for the buyer only because she didn’t want them to walk, she wanted the sale to go through.
Although the argument that the realtor is paid by the buyer is legitimate. It depends on whether or not you look at it as a percentage of the sales price, in which case the seller is typically considered the one who pays it. It’s also true that the seller is the one who signs the contract with the realtor to sell the house. That contract determines commission, subject to state statutes.
The negotiation process you describe is typical.