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
English style of architecture characterized by carving and paneling and flattened arches. ...
Half oval window. It is usually small and placed over a doorway serving a decorative purpose. In some case, the window may be mounted with a hinge at either end to a permit opening for ...
Note having more than one maker, if one or more of the makers default on the note, all makers are sued jointly, rather than just one or all, to make restitution ...
The willingness of a lender to give a mortgage to a mortgagor. A mortgage commitment will give a time period the mortgage will be given and an indication of the interest rate to be charged ...
An organized group of ethical behavior guidelines governing the day-to-day activities of a profession or organization. ...
Certificate of an officer stating that a sworn statement is genuine stating when, where and before whom the statement was sworn. A jurat commonly appears at the bottom of an affidavit. ...
The clear, open and active occupancy of real estate. For example, notorious possession is one of the tests for adverse possession. ...
Group of investors pooling their money to purchase real estate. ...
An adjustment to the internal rate of return (IRR) computation so as to improve this measure. This uses a risk-free after-tax rate and a customary rate for money reinvestment. ...
Have a question or comment?
We're here to help.