How Do Real Estate Agents Get Paid? Hello, I’m John Conde Orlando Realtor with
ORC and today I’d like to talk about how real estate agents get paid on a traditional listing.
Unlike other professionals who bill their clients at hourly rates or present an invoice
at the end of a project, real estate professionals are paid at the end of a sales transaction.
If a real estate agent works with a buyer or a seller for weeks or even months without
a resulting transaction, then they just aren’t paid for their time.
Realtors earn a commission based on the sales price of the home and they only receive that
commission only after the transaction goes to closing.
Commissions are negotiable between listing agents and their clients. Some brokerages
offer commission discounts for sellers, but a typical commission is between 5 and 6 percent
of the sales price. Most of the time, the commission is evenly
split between the buyers’ agent and the listing agent, but sometimes the split is
negotiated unevenly. For example, a seller could agree to pay a
5.5 percent commission divided so that the listing agent receives 3 percent and the buyers’
agent receives 2.5 percent. So it all depends what they agreed on.
So, Who Pays the Commission? Technically, the total commission is always
paid by the seller at the closing table, where the fee is subtracted from the proceeds of
the home sale. The commission is split at the settlement
table between the listing agent’s brokerage and the buyers’ agent brokerage; then the
agents themselves are paid by their brokers. Now if it’s a short sale property, then it
works a bit differently and I’ll be talking in detail about that in my next video. “How
Do Realtors Get Paid on a short sale” Thanks for watching!