I often get asked by home buyers “how do you get paid?” Some buyers mistakenly believe they have to pay directly for the services of a Real Estate agent.
As a licensed Realtor, my fee is nearly always paid by the seller of the property, not by the buyer. Most sellers choose to work with a professional REALTORS® when selling their home, and REALTORS® who are members of the Oklahoma City Metropolitan Association of REALTORS® (OKMAR) agree in advance to share the fee equitably between both Realtors to sell the home. The fee is only paid after a successful sale of a home.
If a real estate agent works with a buyer or a seller for weeks or months without a resulting transaction, they aren’t paid for their time. REALTORS® earn a commission based on the sales price of the home and receive that commission only after the transaction goes to settlement.
Commissions are set by the listing agent and their client. In many cases the commission is evenly split between the buyers’ agent and the listing agent, but sometimes the split is negotiated unevenly.
Who Pays the Commission?
Commissions are always paid to the agents at the settlement table, out of the seller’s proceeds. In some cases there is a small transaction fee however, if that occurs, the buyer is always notified in advance.
Typically the commission is split at the settlement table between the listing agent’s brokerage and the buyers’ agent brokerage; then the agents themselves are paid by their brokers. The good news is that the commission comes from the seller, not the buyer.
Buyer Broker Service Agreement
When I begin to show you homes, I will ask that you sign a Buyer Broker Service Agreement with me. This is a standard Oklahoma Real Estate Commission document that spells out my duties to you, the buyer, and defines in writing how I get paid. This way you know in advance what my duties are to you and how my commission is paid by the seller, not the buyer. It also clarifies our relationship so that if I spend my time and effort in finding and showing you homes, you agree to use me in the purchase of the home you ultimately choose.
For Sale by Owner – FSBO
Some sellers choose to sell their home without the assist of a REALTOR®. Buyers are free to purchase a home directly from the owner but without the assistance of a professional REALTOR® many feel uncomfortable in committing to such a large financial commitment. If you choose to purchase directly from a FSBO, you may still want to use my services. In that case we can negotiate a price directly and you can still pay my fee at closing.
In some cases, FSBO’s choose to list their home by themselves, but compensate a REALTOR® who brings sellers to show their home. In that case, they will record the offered compensation in the MLS and if it is sufficient for me to do my normal job, then I may agree to show the home with the understanding that if you choose that home, I will accept the commission offered by the seller.
The Benefit to Buyers of Working with a Realtor
There are many benefits to buyers who work with experienced REALTORS® like me. We understand the market and the area, and we visit dozens of homes every month. I work with buyers every single day and understand how each buyer is different, yet how most buyer’s needs are similar. I understand contracts, I know how to negotiate with sellers, and how to ensure your home is inspected by a professional before purchase. I have many satisfied home buyers over many years in business and know what it takes to make your home buying experience easy and stress-free.
And best of all, it doesn’t cost you any money directly from your pocket!