Who Pays The Real Estate Agent?
Now that you’ve learned how much does a real estate agent make, you’re wondering who pays the real estate agent?
Get ready for a non-answer. Or a super-answer. It’s a half-full/half-empty situation.
The thing is that both the home buyer and the home seller pay the real estate agents involved with the sale of a property but if you want to get too technical and literal, it’s the home seller.
Confusing? Ok, let’s go step by step of a sale and after we’ll comment and set things straight:
If Home Buyer Sam and his agent Steve close the deal with Seller Diane and her agent Roxanne, Home Buyer Sam pays up Home Seller Diane, who is obligated to give Agent Roxanne her real estate commission of 6%, that will be, then, split 50-50 with Agent Steve.
So, as you can see, the 6% commission is included in the payment done by the buyer and passed on by the seller. It’s a matter of point of view if you want to look at it as one specific party paying for that commission. And, of course, many greedy people see it this way: home buyers complain they could have spent less for the property if it wasn’t for the real estate commission and home sellers complain they could keep more of the money in their pockets if it wasn’t for the real estate commission.
But the truth is that they are both wrong. What is positively correct is the exact opposite: going about a house sale by way of a For Sale By Owner with no real estate agent involved will make you lose money. Whether you are the seller – by pricing it below (or even worse: above!) its true market value potential – or if you are the buyer – by not knowing how to detect and negotiate through the pitfalls of real estate and failing to avoid problems with paperwork and home inspection that will come to haunt you later and cost you lots of money.
Contact one of our local real estate agents right now so you don’t have to worry who pays for the real estate agent. Actually, you know what? We’re adding another answer to the question of who pays for the real estate agent! It’s not the seller or the buyer or the combination of the two… if you think about it, the agent actually pays for himself through the great work and return over your investment in hiring him! Do it!
Popular Real Estate Questions
Popular Real Estate Glossary Terms
(1) Temporary and symbolic payment showing good faith and obligating two or more individuals until a final transaction takes place. The binder is typically returned if the final agreement ...
Insurance or maintenance policy taken out by a buyer of real or personal property. ...
Large heavy piece of wood or other material generally running horizontally through a building providing support for other parts of the structure. The stringer usually runs in the direction ...
Interest rate on a mortgage that moves up or down based on some variable such as an index of lender's cost of funds, inflation rate, or prime rate. ...
Claim by a real estate broker that his or her actions were the principal cause of the completion of a property sale between two parties. A successful procuring cause claim would entitle a ...
provision in a written agreement allowing the prospective purchaser the right to cancel the contract if occupancy requirements are not satisfied as of a specific date. ...
Period of time interest rates are guaranteed by lock-in-clause. The guarantee period of time is longer during stable economic periods with low rates of inflation. ...
Amount paid back or credit given because of an overcollection or the return of property sold. Also called refund. Unearned interest refunded to a borrower if the loan is paid off before ...
Unimproved property. It has no utilities, sewers, streets, or structures and usually must be cleared. ...
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