Some people think Realtors make a lot of money for very little work. This simply isn’t true. Yes, real estate can be a lucrative career for those who work hard at it full time. But there’s a whole other side of this career that people don’t see. They don’t see the many weeks and sometimes months a Realtor® works with a client to find them the perfect home, the hours they spend driving from property to property, the money they spend on photography and listings, the time out of their own lives at night and on weekends.
Sometimes, the deals go seamlessly. Other times, deals fall through and months of hard work go unpaid. Just like a lawyer, a Realtor doesn’t get paid until they make the sale and all is said and done at closing. Most real estate agents earn their living through commissions. They don’t get paid a salary from the real estate company they represent. This motivates them to work hard for their money, because without that hard work there is no compensation.
Commissions are payments made to Realtors for services they provided in the selling or buying of a piece of property. It’s typically a percentage of the selling price. The National Association of Realtors 2020 Profile of Home Buyers and Sellers says 77 percent of sellers pay the real estate agent’s compensation.
How Commissions Work
When a home is sold, the seller is the one who usually pays the total commission at closing. The commission paid by the seller is typically split between the agent and the company or broker they represent. What this split is exactly is different in every company and for every agent. In a typical real estate transaction, commissions can be split four ways:
- Listing agent—the Realtor who took the listing from the seller
- Listing broker—the company that employs the listing agent
- Buyer’s agent—the Realtor who represents the buyer
- Buyer’s agent broker—the company that employs the buyer’s agent
Sometimes, the listing agent gets even less, for instance if they pay a referral fee to another agent for connecting them with the listing in the first place. As you can see, what the agent ends up with is not what many people assume! They work hard for their money as they help buyers and sellers with their real estate needs, with no guarantee of getting paid in their efforts.
Contact Berkshire Hathaway Premier Properties
We are transparent about all our Realtor commissions and would be happy to let you know the percentage you can expect when you partner with us for buying or selling. Please contact Berkshire Hathaway Premier Properties at 713-862-0000.