How Does A Realtor Get Paid?

How does a Realtor get paid? I get this question so often, especially from first time home buyers. Many people think that we get paid by the hour or are on a salary. The answer: straight commission. 

When a seller lists his house, he signs a listing agreement with a Realtor to pay a commission - normally a percentage based on the final selling price. That commission is split up between the listing Broker and the cooperating Broker. For example, if a seller lists his home with Century 21 for 5% commission and it sells for $250,000, he would pay a total commission of $12,500. If an agent from Coldwell Banker represented the buyers in this transaction, Century 21 would cut a check to Coldwell Banker. The Brokers then split the commission with their agents, based on their commission agreements.

As a buyer, you don't pay any fee or commission to a Realtor. A buyer's Realtor gets paid from the sellers' side of the transaction. Same with a rental transaction. 

The only time a Realtor gets paid is at a closing. Otherwise, no one reimburses us for any of our marketing expenses, gas or any other business fees. 

This is why we appreciate your loyalty as well as your referrals!