Does the Buyer or the Seller Pay an Agent’s Commission?

We’re back for another edition of “You’ve Got Questions, We’ve Got Answers.” Today’s question is: Who pays the commission in a real estate transaction?

Many buyer’s agents lead people to believe that because the seller is offering the commission amount, the seller is paying the commission. Then, the listing agent says that because the buyer is bringing the money to the table, it’s really them that is paying the commission. So, which one is it really?

If you think of a transaction as a pie, there’s a sliver of that pie that goes to the listing agent and listing company. There’s also a sliver that goes to the buyer’s agent and the buyer’s broker. That money comes funded from the transaction of the sale, so it ends up being the buyer who is actually paying for it.

In effect, the buyer who brings the money to the table exchanges money for the property and that's where the commission comes from. However, the seller does technically offer the amount to the agent who brings the buyer, so it’s a little bit of both.

If you have any other questions, don’t hesitate to give me a call or send me an email. I look forward to hearing from you.

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What to Do If Your Home Failed to Sell

Welcome to our latest series, “You’ve Got Questions, We’ve Got Answers.” The question we’re answering today is this: “My house was on the market before. It didn’t sell. What should I do?”

Hire us. Seriously. If your home was on the market and didn’t sell, there are several possible causes. The most likely is that you hired the wrong agent, hired the wrong company, or the price wasn’t right.

If you want to avoid the same mistake, you need to correct those mistakes. To price your home correctly, you'll need to work with an agent who knows what they're doing and is backed by a company that supports them. They will also need to be aware of where the market is at and where it's headed in the future. Very rarely does a market remain at equilibrium for an extended period of time.

Recently, interest rates have gone up. When that happens, the number of buyers goes down and so do the prices of homes. It also causes homes not to sell.

When the market goes down, so should your asking price. The gap between your home's price and where the market is at needs to be minimal. Pricing at market value should allow you to get a buyer within 30 days. If that doesn't turn out to be the case, you seriously need to reconsider your options. You have to react to the market, the market is not going to react to you.

If you have any questions for us or want to know exactly what your home is worth in this current market, don’t hesitate to give us a call or send us an email. We look forward to hearing from you soon.

Looking to sell your home? Get a FREE home value report
Looking to buy a home? Search all homes on the MLS

Interested in a career in real estate? Let's meet!