| How does the buyer pay a real estate agent?

How does the buyer pay a real estate agent?

Sara asked:


I’m going to be buying a house in the next six months and am preparing to call real estate agents. I’ve never owned a house (or even lived in one, for that matter), so I have no idea how they get compensated. Do they make a comission on the sale, or do they get paid by the buyer? I don’t know if I’ll end up with a “buyer’s agent” or a “seller’s agent”, I’m assuming the buyer pays a “buyer’s agent”, however. Please let me know!

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Comments

8 Responses to “How does the buyer pay a real estate agent?”

  1. maamu on April 18th, 2009 4:00 pm

    The seller pays the real estate company commission. In this area it is 7%.

    The buyer pays nothing (well, except for the house they bought–lol)

  2. smartyness on April 21st, 2009 1:59 am

    Okay, this is en easy one. The seller of the home pays commission to thier own agent - the sellers agent. Any agent representing the buyer is the buyers agent. The sellers agent will split the commission with your agent, you dont pay commission. Happy house hunting!

  3. ed on April 24th, 2009 9:48 am

    At closing, deducted from proceeds, from the seller, not the buyer.
    Commission.

    Agents claim to to represent the buyer. RARE!
    They get paid by the seller. They’re main source of income.

  4. Prophet 1102 on April 30th, 2009 8:33 am

    Their commission comes from the seller’s agreement with their agent. Typically, it’s 6% of the sale price.

    The seller’s agent and the buyer’s agent will then share 3% each. (Actually - the 3% goes to the Agent’s Broker - and the Agent gets 1-1/2 % or other amount depending on their agency agreement)

    The money is paid out at closing by the Title Company.

    Who is actually paying - that sort of depends? If the seller wants $100,000 for his house, and the Agent’sl cost is $6,000, he prices the house for $106,000. So if you pay the full price, you paid the Agent. If you pay $103,000, then you both shared the price of the agent. If you only pay $100,000, then the seller get’s to pay everybody. It’s called “negotiation”.

  5. heyteach on May 1st, 2009 5:51 am

    As a buyer, you absolutely should have a buyer’s agent. However, the seller of the house pays a real estate commission and typically the commission is split between the buyer’s agent and seller’s agent. However, you should be aware that when you sign with an agent (yes even as a buyer’s agent) that if you want to see property with reduced or non-existent commissions (FSBO, For Sale By Owner) they may be asking for YOU to make up the difference so they get to 3% of the sales price (a typical commission being 6%, but it is NOT carved in stone).

  6. Ralfcoder on May 2nd, 2009 6:27 pm

    The final source all of this info is your realtor, so you should ask them to be sure. But in my area, the seller pays the realtor’s commission, and that is split between the buyer’s and seller’s agents and agencies.

    Interview at least 3 different realtors before you select one, though. This is a major transaction - you want a person working for you that you trust, and that you can work well with. Get recommendations from friends and co-workers, go to open houses to interview the realtors there, and ask for references from the ones you consider. Follow up on those references, too. For a first time buyer, I’d recommend you go with an agent from one of the larger residential realtors in your area. They didn’t get to be that big by not doing the job well.

    I second the recommendation to sign a “buyer’s agent” agreement with your realtor. They still will be paid by the seller. In my area, the realtor that the buyer brings to the deal is legally representing the seller, unless you have this agreement. It seems crazy to me to go into a deal worth this kind of money with your closest adviser working for the other side.

  7. millers_exit on May 3rd, 2009 8:27 pm

    Normally, a real estate agent is only paid from one party–usually the seller. Most agents won’t charge you to go look at different homes because the sellers are paying the commission to their agents, and those agents in turn split the commission with the buyer’s agent. Also, be weary about signing a buyer’s agency agreement. There may be a clause in the agreement that says you will pay them if you buy any property–with or without their help.
    Feel free to email me with any other questions you may have, or if you need help finding a local Realtor.
    Melanie Miller
    Associate Broker/REALTOR
    EXIT Advantage Realty
    575-434-0300

  8. NevadaHomes on May 6th, 2009 10:47 am

    Hi Sara,

    Buyer’s real estate professional is usually compensated by the sellers. It may be wise to check your buyer’s brokerage agreement if there is clause indicating otherwise.