Understanding How Agents Get Paid
Money. Isn’t it always a delicate subject? I’ve found that one of things buyers often wonder about and are afraid to ask is, exactly how does an agent get paid? It’s not something you’ll see openly discussed with any frequency, so I thought I’d cover it here on my blog. I’ll answer those awkward questions here and save you the discomfort of having to ask.
First off, in 99.9% of cases, the seller pays the real estate agent’s commission. This means that as a buyer, you can have an agent represent you and not worry about having to pay the commission.
So how exactly does that work? Well, it’s simple. When a person lists their property for sale, they agree to pay the listing agent a certain percentage in commission. Then, the listing agent offers 1/2 of that commission to any buyer’s agent who sells the property. Both agents are paid the day the property closes.
Now that you understand how an agent is paid, let’s talk about some of the details of this.
The agent who represents you on the home you buy is the one who will earn a commission. This is why it’s super important to pick one agent to represent you and work exclusively with them. An agent may spend weeks if not months showing you properties and they don’t earn a dime unless you buy the property with them. Sometimes people think that the company an agent works for pays them a salary, but that’s not the case. The agent pays for everything out of their own pocket. When they work with you to find a home, they are the ones paying for gas, car maintenance, ect. They aren’t earning an hourly, weekly, or monthly salary. Nadda. Nothing.
On a personal note I will say that I’ve been blessed with some of the best, most loyal clients an agent could ever ask for. Most of my clients appreciate deeply the amount of time I spend helping them and stick with me through thick and thin. I can tell you first hand that if you want an agent to move mountains for you, let them know you are loyal and you appreciate them. I will go to the ends of the earth for clients like that!