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Who Pays the Real Estate Commission?
Home » Who Pays the Real Estate Commission?

How Does a Real Estate Agent Get Paid?

To understand who pays real estate commissions -- whether it's sellers or buyers or both -- first take a look at how real estate agents are paid and how they share cooperating commissions. Don't be embarrassed if you don't know how commissions work because I've had clients who didn't know, even though I had sold their home, represented them to buy a new home and then later listed that home for sale.
Listing Information

How Real Estate Commissions Work

  • Real estate agents work for a real estate broker.
  • All fees paid to a real estate agent pass through the broker.
  • Only a real estate broker can pay a real estate commission and sign a listing agreement with a seller.

How Are Real Estate Agents Compensated by the Broker?

Divisions vary.

New agents can receive as little as 30% to 50% of the total commission received by the brokerage. From that amount, other fees may be deducted such as advertising, sign rentals or office expenses. Top producing agents might receive 70 to 90% and pay the broker a desk fee. transaction fee, franchise fee and office expenses. Everybody else falls somewhere in between.

Listing Agents' Fees

The most common type of listing agreement between a seller and her agent gives that agent's broker the right to exclusively market the home. In return for bringing a buyer to the table, the seller agrees to pay a commission to the broker. Typically, this fee is represented as a percentage of the sales price and is shared between the listing broker and the broker who brings the buyer.
Listing Information

Co-Broker Splits

Divisions of fees among brokers is not always fair or equal, just like life. For example, a seller could sign a listing agreement for 7% that stipulates the listing broker will receive 4% and will co-broker 3% to the selling broker. It's not always a 50/50 split. In a buyer's market, sellers might want to consider asking the broker to give a larger percentage to the buyer's broker. In a seller's market, the buyer's broker might receive less.
There is no set formula
Keep in mind that your listing agent bares the expense of marketing the sale of your home. If your listing
agent does not sell it he/she does not get paid.
If your listing agent does not have money, you are not going to get much advertising.
Best vet hire a full time professional, as offered in this website.
You can not go wrong with The Keyes Home Team...
Listing Information

Buyer's Brokers

    Seller Pays the Buyer's Commission

    Under a Buyer's Broker arrangement, the named brokerage and agent represent the buyer. The fee paid to the broker most commonly is paid by the seller. Some buyer broker agreements contain clauses that will compensate the brokerage for the fee it is due less the amount paid by the seller.
    For example, a cooperating listing might offer to pay a broker only 2.5% of the sales price, whereas the brokerage operates at fees of 3%. The difference of .5% could be paid by the buyer if the broker chooses not to waive that amount.
    Buyer Pays the Commission Directly
     
  • The seller is then not obligated, under most listing agreements, to compensate the listing broker for more than the listing side or portion of the commission.
  • Often sales prices are reduced to reflect the amount the buyer is paying.
  • Sellers can also credit the buyer the commission and the buyer, in turn, credits the brokerage.

Fact: 97% of homes sold are sold by realtors.
At the Keyes Company we understand what it takes to not only sell the home or property but how to get it to the closing table.

Inquire about listing your home or property with The Keyes Company Today :
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014
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