You want to buy your first home, but don’t want to use part of your hard earned deposit to pay a Realtor to help you find one. Set that worry aside because as a buyer you are usually not required to pay any of the Realtors, buyer or seller. No, seriously, it’s true. Here is the rundown on how it works.
Real estate commissions
Real estate commissions, the money paid to Realtors for their services, always sound high, but they are typically shared among several people. Depending on whether your agent works for a broker or not, the commission paid is typically split between the listing agent, the agent who took the listing from a seller, the listing broker, the company employing the listing agent, then your agent, and the company who employs your agent. It may involve less people if one or the other (or both) are independent agents or if the listing agent finds the buyer.
Despite how many agents are involved, the commissions are paid from the proceeds of the sale, from the money that will be due to the seller. That means the seller is responsible for paying any and all agents. That doesn’t mean they pay a higher percentage of the sale if there are multiple agents. The agents share the commission in the listing agreement. For instance, if the listing agreement has a 6% commission, which is pretty typical, then the seller’s agent gets 3% and buyer’s agent gets 3%. If there are brokers involved, the percentage the agent/broker gets depends on the agreement between them.
So as a buyer, you aren’t responsible for payment to the agents, yours or theirs. So start your search and jump into the home ownership fray!