How Do Home Buyers’ Agents Get Paid?

Closing a real estate deal can be a long and arduous process from the time a property is first listed for sale until everyone gathers at the settlement table to sign on the dotted lines. Some real estate agents specialize in bringing buyers to the table, helping them to negotiate the numerous steps involved in the purchase. But it’s the seller, not the buyer, who typically pays this agent’s commission.

-Most real estate agents are compensated with a commission that’s based on a percentage of the sales price.

– The seller typically pays the commission for the buyer’s and seller’s agent out of the sales proceeds.

– If you work with multiple buyer’s agents, only one of them will be paid commission—usually the one who helped you write the offer.

– Agents Work for Brokers

A few real estate agents are paid salaries by their brokers and they work as employees, but this is uncommon. Most agents work on a commission basis.

 

The seller effectively pays your buyer’s agent to negotiate on your behalf.

Compensation is typically made at closing when it’s deducted from the seller’s proceeds from the sale.

 

Procuring Cause

“Procuring cause” is the complex process that determines which buyer’s agent is entitled to the real estate commission when a buyer works with more than one agent.

 

– Some Buyer’s Agents Ask for a Buyer Broker Contract

A buyer broker contract is an agreement between the buyer and the buyer’s agent.

 

How Much Is the Buyer’s Agent’s Commission?

The industry average for buyer’s agents is somewhere between 2.5% and 3% of the sales price, depending on local custom and the seller’s wishes, but the exact amount the buyer’s agent receives depends on how his broker compensates him.

 

Dual Agency Concerns

“Dual agency” is a situation in which the same agent represents both buyer and seller.

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