How Do Home Buyers’ Agents Get Paid?
In order to have a better understanding of a home buyer’s agents’ pay scale and methodology, we need to understand the exact stages of the transaction and the traditional fee structure involved in the process all the while. Most real estate agents earn the better half of their salary through commissions, although there are other ways they get paid as well. A commission is a percentage fee of the purchase price of the home or real estate sold by the agent. The percentage amount is primarily set by the seller or owner of the property or by the listing agent. The commission fee can be divided into three essential parts:
- The stipulated amount of charge for the broker who lists the property and helps in the marketing.
- Fee for the broker who brings in the clients. He is the cooperating broker.
- If the agent gains a client without the aid of the cooperating broker, he gets to keep the entire commission.
The main fee for an agent is the real estate commission. As agents and brokers are licensed salespersons, they work under an allocated senior broker. All the commissions earned are paid directly to the lead broker, who then splits the commissions to the agents/brokers working under him/her. A document called the listing agreement decides the conditions of the contract, i.e., detailing the amount of commission and other criteria.
A co-brokerage fee is also another method of earning commission wherein two parties, a broker and a real agent, split the entire fee equally. As mentioned above, listing agent fees is another effective method by which a real estate agent can earn a commission. This particular gig includes listing the property and marketing it until the agent gets potential clients.
The amount of money earned by an agent depends on several factors, such as the amount paid to the brokerage, the agent’s commission after spiting with the sponsoring broker, and also the number of transactions completed.