How Do Real Estate Agents Get Paid?
The Simple Answer: Sales Commission.
That's right, Real Estate agents are paid when they sell a home. It seems that much of the public is unaware of how Real Estate agents earn their living, this blog post is intended to bring simple clarification to this matter.
Typically Real Estate agents will enter into a signed contractual agreement with a home owner and in that agreement the home owner agrees to a certain percentage or commission that will be given to the Real Estate agent(s) when their home is sold and closed. Once the agreement is signed the Real Estate agent begins their listing duties of posting the home to the MLS (in which they have paid a lucrative amount to join), advertising with all of the important Real Estate marketing avenues, holding open houses, alerting other agents about the listing, and so forth and so on all in the hopes that the home will sell resulting in them being paid their promised commission. If the home that the Real Estate agent has listed does not sell, the agent in the vast majority of cases, does not receive any compensation no matter the extent of their prior investment.
Some of you may be buyers and are wondering how it works for you. The answer is simple, if you buy a home through your Real Estate agent and the home is listed with a Real Estate company, your Real Estate agent will be paid by the seller. This means that your Real Estate agent's services are free to you. The services in which your Real Estate agent will provide to you is locating and showing homes to you, advising you and helping you through your offer and negotiations, assisting you through the inspection processes, processing your paperwork with the attorneys and lenders to ensure a successful closing and so forth. Please keep in mind that no matter how many hours your Real Estate agent invests into your home search and negotiations they will not be paid unless you purchase and close on a home with them. One of the hardest pills for a Real Estate agent to swallow is having spent hours invested with a buyer who ultimately purchases with another agent, buys a "for sale by owner" property, etc. Keep in mind that if you are working with a Real Estate agent they can call and negotiate "for sale by owner" homes for you. Often these by-owner sellers will compensate your Real Estate agent for you if you purchase their home.
Having a better understanding of how Real Estate agents are paid will hopefully bring about better customer and client loyalty. I have often said that Real Estate agents work when everyone else doesn't: nights and weekends. Please be considerate of our hard work and time spent away from our homes in an effort to find or sell your home!
Final Point: Hire an experienced agent that will work hard for you, be honest with you, give you their best in loyalty and in return you be loyal to them.
Buying or selling around the Greater Atlanta area? I would appreciate the opportunity to work for you!
Written by:
Amie Bozeman, Realtor
Better Homes and Gardens Real Estate Metro Brokers
Greater Atlanta
http://amiebozeman.com
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