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On a weekly basis we bring up to date current information about the real estate market in Medford, Eagle Point, Pheonix and the surrounding areas of Jackson County and Josephine County Oregon.!

Sep 21 2013

How Do Real Estate Agents Get Paid?

Who Pays Real Estate Agents?

Vic Nicolescu The Alba Group

Vic Nicolescu, Owner Broker

Many people do not realize how real estate agents get paid. If you are a home buyer it is likely that the home owner has negotiated the real estates compensation in the listing agreement. Many home sellers do not realize that real estate commissions are negotiable.

Real estate agents get paid out of the sale proceeds. The commission is added to the purchase price of the agreement. The seller has a seller’s agent and the buyers usually have their own agent. There will be an agreement between the two agents brokerages to determine how the commission will be split before you actually see the property.

Real estate agents are not able to work independently. Every real estate agent works for a broker. They receive their checks directly from their broker. Brokers decide the commissions they charge for properties marketed and sold through that brokerage. The commission .is always negotiable, the national average ranges between 4 – 8 percent. The commission is split between the broker and the agent based on an agreement that has been negotiated between the broker and the agent.

A seller signs a listing agreement for a specific length of time. The agreement states that the broker will receive a certain amount of commission upon the sale of the house. The buyer’s agent or sometimes called a selling agent actually procures the sale by attracting the buyer for the property. Although the commission is split between two sides of the transaction it is not always an equal split. Sometimes it is 50-50 but it could be 60-40 or 70-30. There are no set standards. If the same brokerage represents both the buyer and the seller than the brokerage will receive full commission.

Are you confused yet? Here is an example. If a home is sold for $200,000 and the commission is 7% and if the commissions are split 60% for listing broker and 40% for selling broker than the listing broker will receive $8,400 and the selling broker would receive $5,600. Each of those figures would be split between the respective agents as agreed upon prior to the sale of the property. However, the commission is not paid until the home is sold.

If you are interested in learning more about sell your home or buying a home I would be available to answer any of your questions.

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