ding How Buyer Clients Pay Realtors: A Closer Look – It’s Not What You Think :)

Understanding How Buyer Clients Pay Realtors: A Closer Look – It’s Not What You Think 🙂

How many truly understand how buyers agents get paid?

Honestly, I didn’t even know. Until I had my first transaction. I remember my clients wondering how they were going to be able to pay me for all my services I was providing them. I had to call my BIC (broker in charge) to ask her how it went. So now I want to be able to explain to ya’ll how it goes. That way, if your ever looking to buy a home, you won’t have to worry how to pay for our services. 🙂

Buyers typically do not directly pay their real estate agents; instead, the compensation for real estate agents, including buyer’s agents, typically comes from the seller’s proceeds in a real estate transaction. Here’s how it works:

1. Seller-Paid Commissions: In most real estate transactions, the seller is responsible for paying both their own listing agent (the seller’s agent) and the buyer’s agent. This is usually structured as a commission that is calculated as a percentage of the final sale price of the property. The commission is agreed upon in the listing agreement signed by the seller and their listing agent.
2. Co-Brokerage Agreement: The commission that the seller pays is typically shared between the seller’s agent and the buyer’s agent. This division of the commission is outlined in a co-brokerage agreement between the listing agent and the buyer’s agent. The specific split of the commission can vary, but it is typically negotiated before the property is listed.
3. No Direct Payment by the Buyer: The buyer, in most cases, does not make a direct payment to their real estate agent (the buyer’s agent). The commission paid to the buyer’s agent is deducted from the total sale proceeds, and the buyer does not incur an additional cost for their services.
4. Alternative Payment Structures: In some cases, there may be alternative payment structures agreed upon between the buyer and their agent. For instance, some buyers may choose to work with an agent on a flat fee or hourly rate basis. In these situations, the buyer pays the agent directly for their services. However, this is less common and typically only occurs when a buyer and agent agree on such terms in advance.

It’s important for buyers to understand that the commission paid to the buyer’s agent does indirectly affect the overall cost of the transaction. While the seller pays the commission, this cost is factored into the property’s pricing, which can influence the price negotiations and the buyer’s financing.

Buyers should also be aware that the compensation structure can vary based on local market norms and regulations, and it’s essential to have clear communication with their agent regarding any payment arrangements. Ultimately, for most buyers, the services of a buyer’s agent are typically covered by the seller’s commission, making it a valuable and cost-effective resource when purchasing a home.

I hope this covered the material for ya’ll! If you have any questions, don’t hesitate to reach out!

XOXO, carolinalivingwithalli