How Do Real Estate Agents Get Paid?


In the beginning….

I remember when I was considering buying my first home I was concerned how I was going to afford an agent to get me started. Little did I know that an agent isn’t actually paid by the buyer and no one gets paid until the house is closed. It’s not as confusing as you may think but its certainly surprising if you don’t know how it works. Good news for you, is this episode has all of the details covered for you. 


Typically the sellers gives the listing agent percentage of the listing price as a commission. This is agreed to at the time the listing agent and seller signs the listing agreement. The amount can vary from agent to agent. Be sure to ask your agent what they are doing to earn that commission and get details on the expectations so you have no surprises. A cheaper commission will likely be reduced because the level of service is less. 


The listing agent will typically share their commission with a buyers agent, in return for bringing the buyer to the deal and representing the buyer through the process. The listing agent earns their commission by advertising, negotiations, answering questions from the seller and the buyers agent, and making sure the home closes as smoothly as possible. 

The buyers agent earns their portion of the split by guiding the buyer through the process, working with and scheduling inspections, insuring the buyers team of insurance and lenders are doing their part, answering questions from the buyers and overall doing their part to get the home to the closing. 


No agent gets paid until the home is closed and the deed is recorded. Sadly it happens, but it can be quite heartbreaking for everyone when a deal falls apart at the last minute. Lots of work goes into the process and many hours can be spent on getting a deal together, only to fall apart at the closing table.Its heart wrenching for everyone involved in the deal. 

A buyer rarely will pay the buyers agent directly and a seller doesn’t pay the agent unless the home actually gets sold. Sometimes a buyer will look at homes that are For Sale by Owner (EP85 & 35) and the buyer will refuse to pay the buyers agent. At that point the buyer will be required to pay the buyers agent for their work when the home closes. 

If you like the videos I’ll have some more out in the coming weeks. The previous episodes can all be found on my web site ( and 

Until next time….

Welcome Home

Chris Whitehurst 

Rose and Womble

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