Agents helping people buy homes often get paid in one of two ways

From the time a property goes up for sale until the time the settlement table is reached and the final paperwork is signed, the real estate closing process may be long and tedious. There will be no settlement until a buyer has made an offer, and that won’t happen until an offer has been made. Some real estate agents focus on helping clients find the right home by showing them several options until they find the one, and then guiding them through the maze of paperwork and negotiations that follow. Yet, in most cases, the commission for this agency will come out of the seller’s pocket, rather than the buyer’s.

Employers of Agents are Brokers.

Although it is true that some buyers believe that the brokerage that their representative works for compensates them, this is not always the case.

It is against the law for clients to pay real estate agents commissions in cash. As a result, the whole commission is paid to the selling agent’s brokerage (the seller’s agent) and then sent to the buyer’s agent’s brokerage (the buyer’s agent). The real estate licence of an agent must be subordinated to that of a broker. As per their broker’s licences, the great majority of real estate agents are independent contractors. 3

Sometimes, brokers may pay their real estate agents a salary and treat them like employees, but this is quite the exception. To a large extent, agents earn their living via commissions.

When and how does the cash exchange hands?

A buyer’s agent is a third party that acts on a buyer’s behalf during negotiations and is compensated by the seller. A buyer may pay the brokerage directly in cases when no commission is being paid since the seller is handling the sale of the property themselves. The listing agency often receives a commission, which is typically paid by the seller. The listing brokerage and the broker of the agent who brings an offer share the fee in some kind. You should really know who pays the buyer’s agent.

Normally, payment is made at the close of a deal, and is deducted from the seller’s net proceeds. Buyers have no say over the amount of commission paid by the seller and are relieved of the responsibility of making immediate restitution to their representatives. The commission, in this case, is paid by the seller. Once again, the buyer cannot pay the agent directly, but they are allowed to propose a higher purchase price in exchange for a higher commission paid by the seller. They could do this if they want to increase the value of the offer they had made on the house.

Determine the Reason

It is expected that if you hire a buyer’s agent to show you houses, you would employ that same firm to submit an offer on a home. Whenever a buyer uses more than one agent, the process of “procuring cause” determines who, if anybody, should be paid a commission on the sale.


The agent who creates the offer is often the one who receives payment. A real estate agent is someone you may hire to hang out with you on the weekend and show you around potential properties and provide advice. The next step is to see the home of your desires with yet another real estate agent. This agent will write the offer on your behalf after you’ve determined this is the house you want to buy.