Who Pays Agent Commissions?
Being a real estate agent is not an easy job. Agents will handle many tasks, including:
- Doing a market analysis to properly price a home
- Provide advice on preparing a home for sale
- List the home on the local Realtor listing service and dozens of internet sites
- Coordinate showings
- Screen, qualify and advise buyers on showings
- Market the home
- Conduct negotiations
- Write contracts and associated documents
- Transaction processing with involved parties (buyers or sellers agent, lender, title insurance agent, closing company, surveyor, inspectors, appraiser, home insurance agent, etc.)
- Coordinate inspections
Real estate agents don’t work for free. When an agent agrees to help someone sell their home, they will negotiate a commission for their services. This commission is usually split 50/50 with an agent who brings a buyer (buyers agent). As such, a buyer is not responsible for paying any commission. This arrangement represents the vast majority of agent-assisted sales.
There are situations, however, when a buyer may be responsible for paying a commission. When a buyer is interested in purchasing a For Sale By Owner (FSBO), the agent will help them negotiate the sale. Most times, the seller is happy to pay a commission to the buyers agent for their assistance and access to their buyers. There are instances where a FSBO owner will not pay a commission (not enough money or not enough motivation to sell). In these rare cases, the buyer would need to pay a commission to the agent for their assistance.