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Wednesday, May 01, 2013

Home Buyer Tips - How do real estate agents get paid?

First time home buyers often are confused by the home purchase process.  One area of confusion seems to be about who pays THEIR real estate agent.

As a home buyer you do not pay YOUR real estate agent.

So, how do real estate agents get paid? 

When a home is listed for sale the listing real estate agent (the one who has the sign out front) includes in the listing agreement the compensation terms.   Although it is variable and negotiable, it is most often a percentage of the selling price.  The seller's agent then (normally) splits that designated amount with the buyer’s agent.

Here is a key point about how any real estate agent gets paid.... Because real estate agents do not get paid unless a purchase/sale is made one of the first things any real estate agent will do is qualify the customer.  (Yes, ask a lot of questions.)
  • If the customer is a buyer this involves having the prospective buyer get pre-approved for a mortgage or provide proof of funds if they are cash buyers.
  • If the customer is a seller then part of the listing interview involves qualifying the seller's motivation.   Marketing a property requires a monetary investment as well as lots of energy.  If a seller is not motivated to sell (competitive price, ready to prepare the property, cooperate with showing requests, etc.) then there is little reason to go through the motions.
As a Realtor® working with buyers and sellers in Florida, I do not make anything unless a transaction happenseither I help you buy or sell. 
When you are ready to buy or sell a house in Brevard County, Florida, please give me a call to discuss how I can work with you.  If you prefer, send me an email.

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