Now, How do realtors get paid? If they’re a real estate agent in the true sense of the word, those agents are working on full commission. That means if they don’t sell anything, they don’t make anything. Now, in most cases, across the United States, real estate agents will be making a percentage on whatever the final sales price is for that home.
How do realtors get paid
They might work for three, four, five, six months for you but if the home never closes, they never get paid. There are laws that restrict me from talking about the actual percentage that agents make, So I’m gonna leave that off to the side so I don’t get in trouble.
But, just know, that if you were to google, What do realtors get paid, you probably would find the most common answer. Now, here’s how this works in most cases, I’m just gonna talk broad brush strokes and general circumstances.
If you’re a seller, you’re gonna pay your listing agent a fee and you’re gonna pay the cooperating agent, or the buyer’s broker, a fee, as well. It’s on the seller to pay both of those fees, and that just comes from tradition back when there’s an only representation for sellers.
All agents involved in a transaction actually represented the seller, it’s kind of weird, there was not buyer agency. So, sellers just bore the burden of paying both of those real estate agents. Well, now that buyers can hire a real estate agent or a sign up to work with a real estate agent, sellers still compensate them in most circumstances.
If you’re working with an agent on a purchase, as a buyer, you should know that the fee that the agent’s making is coming from the seller. So, sellers almost always are paying both agents involved in the transaction.
Now, it doesn’t matter, if you’re a listing broker or if you’re a buyer’s broker. We actually call the buyer’s broker a selling agent, because they’re the ones selling the listing. But, I digress. The listing agent, and we’ll say for now the buyer’s broker, it doesn’t matter who you are, which one you are in that transaction, most of the time your compensation works this way.
Do Realtors get paid at closing?
The fee that you’re earning from that sale actually goes to your company. So, I work for a company called XYZ, and when I get paid, that check comes from the escort company, directly to my company. I don’t own the brokerage, I work, I hang my license at this brokerage, and they’re the ones that actually get paid, whether I’m a listing agent or a buyer’s agent.
I then have a contract with my company that says I get a certain percentage of that payment paid directly to me. It doesn’t matter whatever the commission fee is that I’m earning for a transaction. My company gets that, the whole amount and then they take their pound of flesh off, and give me the rest.
I then have to take all of that money and make sure that I set some aside for taxes, some aside for business expenses, some aside for operating expenses, and then I get to take whatever is leftover home to put food on the table. That’s how it works.
Sellers, typically, are paying the listing and the selling office fee to both agents. Agents’ companies get that check and cut some off send the rest to the agent and then the agent. It’s their responsibility to handle it however they want. Take it all home, use some to put back in your business, save for taxes, all of those things are smart, but you’re not obligated to do any of them. But, in the end, there you go.
Seller pays the fees to the brokerage, and the agent who works for that brokerage gets a portion of that check in the end. So, in case you didn’t know, now you know that is how real estate agents are compensated.
If you have any questions about how agents are paid, and I didn’t answer them and comment below, I will do my best to answer. There you have it, I hope you found this helpful.