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
Not sure about something such as suspecting the truthfulness of statements made by a real estate agent. Stipulation in a deed giving the grantor some retained privilege or right in the ...
Loan in which two or more lenders participate in the total financing of a single mortgage. The lenders in a piggyback loan do not necessarily have equal shares. ...
A strong piece of lumber at least two-by-four. It is used for studs and beams to hold a building or structure up. The structure is in effect, attached to, or built onto the structural ...
The addendum definition is an attachment, clause, or section added to an agreement or contract specifying additional terms, conditions, or requirements to the original agreement or ...
See estoppel. ...
As a legal term, abandonment defines a deliberate renunciation of rights to an asset or a business relationship. What does abandonment mean in real estate? In real estate, abandonment, ...
Net operating income (NOI) of property relative to its market value. If rental income property worth $1,000,000 results in NOI of $100,000, the overall return is 10%. NOI compared to ...
The definition of abatement is a reduction of penalties or a tax deduction for individuals or businesses. It can often be accessed upon an overpayment of taxes, if the company or individual ...
Also called interim financing. A mortgage that provides the funds necessary for the building or construction of a real estate project. The project can be a residential subdivision, a ...
Have a question or comment?
We're here to help.