How Real Estate Agents Are Paid

Once you find your home and the deal is sealed, your agent is most likely paid by commission. Typically, the seller pays the commission, making realty services "free" to the buyer. The listing broker, for whom the listing or seller's agent works, typically requires that sellers pay five to seven percent of the sales price. Because most real estate transactions involve two agents-the agent who finds the buyer and the agent who finds the seller-the commission is usually split 50-50, between the two brokerage offices. Then, within each office, the agent who handled the transaction gets a share, usually half of the 50 percent or about 1.5 percent.

There are a few exceptions to the commission method of payment. If you use a buyer's agent, the contract you could be required to sign may or may not require a fee for services or a fee in addition to the commission. Most buyers' agents, however, simply split the commission 50-50 with the listing agent. In any event, the buyer's agent contract stipulates that the agent works exclusively for you and is more likely to work with your best interests at heart.