Understanding How Real Estate Agents Get Paid: What Every Buyer and New Agent Should Know
Navigating the real estate market can feel overwhelming, but one thing is certain: having an experienced Realtor by your side is a game-changer. Whether you’re buying or selling, it’s essential to understand how real estate agents are compensated, so you can make informed decisions throughout the process.
The Role of Real Estate Agents: Independent Contractors
First things first: real estate agents are Independent Contractors. That means we’re self-employed, covering all of our business expenses, insurance, taxes, and even social security. We don’t get the typical perks like paid vacations, company cars, or expense accounts that employees often enjoy. Every marketing flyer, tank of gas, and insurance premium comes out of our own pockets. So, when we say we’re dedicated to helping you close the deal, we mean it – we don’t get paid until that happens!
How Commissions Work: A Quick Breakdown
Traditionally, the seller covers the real estate commission, which is a percentage of the home’s sale price. This commission is then split between the seller’s listing brokerage and the buyer’s brokerage. Each brokerage, in turn, divides that commission between their respective agents – the listing agent and the buyer’s agent.
But the real estate landscape is changing, and so is how buyer’s agents are compensated. Nowadays, sellers can either offer to pay the buyer’s agent directly or provide a credit to the buyer at closing, which the buyer can use to compensate their agent. In some cases, the buyer may need to pay their agent themselves.
What This Means for You as a Buyer
At my firm, we believe in transparency and fairness. Whether you choose a property listed by us or by another firm, our agents are paid the same. You’ll always receive the full support and expertise of your agent, regardless of where you find your dream home.
The Fiduciary Duty: We Work for You
As your agent, my primary responsibility is to represent you. Whether you’re buying or selling, I owe you my complete loyalty, confidentiality, and commitment to securing the best possible outcome. This fiduciary duty remains constant, no matter if I’m acting as your listing agent or your buyer’s agent.
A Day in the Life of a REALTOR: The Reality of Self-Employment
Being a real estate agent isn’t just about showing homes and closing deals. It’s a full-time commitment. We handle everything from marketing and advertising to managing showings and negotiations. And remember – we’re self-employed. Every expense, from professional photography to postage stamps, comes out of our own pocket.
So, while we may make it look easy, there’s a lot that goes on behind the scenes. And the bottom line? We only get paid when your deal closes.
Questions? Email Debbie
