How are Agents Paid? How does The Commission Get Distributed?

How Realtors Are Paid…

As a consumer in the real estate market, you will benefit from the services of an experienced Realtor throughout the selling or buying process. Therefore, it is important that you understand how real estate agents are paid.  Agents are "Independent Contractors".  They pay their own expenses, insurance, taxes, social security, etc.

Basically, the seller pays a commission to the listing broker based on a percentage of the selling price. The listing broker then shares this commission first with the broker representing the buyer and then with the listing agent.

My firm's agents are paid the same regardless of whether a buyer purchases a home listed internally (by my firm) or with another firm.

As your agent, I represent you and owe a fiduciary responsibility to you.  This applies whether or not I am representing you as a listing agent or as a buyers’ agent.

Real estate agents are self-employed and receive no salary.  We have no paid vacation, company car, as re-imbursement assistant compensation, materials reimbursement or expense accounts.  We have ongoing out-of–pocket expenses similar to those of any business.  Agents do NOT get paid until the deal closes.

Commission Distribution Breakdown

Seller pays 100% of the commission to the listing broker

The percentage "split" between the buying and selling brokerages is determined by the listing brokerage.

 Roughly 40-70% is retained by listing broker         Roughly 30-60% is paid to buyer’s broker

Listing agent is paid by listing broker                     Buyers agent is paid by buyer’s broker