Have you ever wondered how a real estate agent gets paid when you hire them? You’re not the first one to ask this question and the truth is, you’ve probably heard that they make “a lot” of money. So, who has thousands of dollars just sitting around to hire an agent?!
There’s power in knowledge, so I want to help break this down in hopes you don’t try selling or buying a property on your own because it’s a nightmare without a professional.
Most Realtors® follow the same pay structure, but it’s always important to ask the agent you work with. A Realtor® only gets paid when the transaction is completed and closed successfully.
Not ONE dime goes to your agent until the closing day takes place. When an individual decides to sell their home and hire an agent, the agent will communicate with the client of what their commission rate is. Based on firms and even the cities you live in, there are some standard rates, but this can be negotiable.
The commission rate is generally a percentage of the home sales price. So based on what they sell your home for, they could make 7% of the sales price. From that commision, the seller’s agent will typically pay the buyers agents commission and the firm they work for, takes a percentage.
In most cases, your agent also pays for photography, marketing, etc. So that commission check is being put to good use to help sell your home to the highest potential buyer for top dollar.
See how nice this is for the buyers? They aren’t paying commission out of their pocket because the listing agent covers the buyers agent paycheck.
Now, not every single firm follows this structure, but MOST do. When you’re the buyer and you have meetings with your Realtor® or they show you 50+ properties, you aren’t paying them for each property. They don’t get paid until they get you in a house and 99% of the time the seller’s agent will pay that commission! Amazing, right?!
I honestly love this pay structure because clients now have the support and guidance they need without coming up with thousands of dollars and the agent is only rewarded once a sale is closed. This is important because everyones needs are being met.
I know I’ve developed a lot of patience since becoming a real estate agent because you never know exactly when you’ll be paid, but it’s worth every minute of it and I find pride in serving my clients throughout the entire process (and long after they’re in their home)!
If you have questions about paying your agent or any other real estate related questions, I’d love to answer them for you! Comment below or shoot me a text at 719-985-1593.
If you are looking to buy or sell in Colorado Springs, Colorado…I’d be honored to help you! If you live out of state and need an incredible Realtor®, I’m connected to a network of top producing agents that will take excellent care of you. I’d love to help you get in touch with the right agent that’ll work for you! Text me and I’ll help you get connected.
Tell me in the comments, would you enjoy a commission based job or HATE it?