Who Pay’s The Commission?


Many buyers are confused about how buyer’s agents get paid. It is confusing in some sense. Real Estate agents are prohibited from being paid a commission directly by the consumer. All commissions are first paid to the agent’s broker, and then the agent’s broker pays the agent. Each agent works as an independent contractor, for the most part and operate under the license of their Broker.

Buyer’s Agents Usually Do Not Work for Free

When you ask a buyer’s agent to show you property, you are implying that you will eventually give an offer through that buyer’s agent. If you have no intention of ever giving the buyer agent you are working with an offer, you are taking advantage of that agent. The agent does not get paid unless they get to the closing table with the buyer and seller.

Understanding Procuring Cause:

It is a complex process finding a home. Who is entitled to the real estate commission when a buyer works with more than one agent? Generally, the agent that presents the offer is the agent that will get paid. Therefore, if you ask an agent to spend weekends driving around, sharing their expertise and knowledge helping you to select a home, it is only fair to be loyal to that agent, as that agent will be loyal to you.

Why a Buyer’s Agent will ask for a signed Exclusive Right to Represent: A buyer broker contract is an agreement between the buyer and the buyer’s agent. The basic buyer broker agreement is the Exclusive right to represent agreement: an exclusive buyer broker agreement binds that buyer’s agent to you and you to that buyer agent for a specific period of time, noted in the contract. This time frame could be one day, one property, one month, six months or even a year. The buyer cannot buy a property without owing a commission to that agent. So if for some reason your agent is away for the weekend, and you look at a property with someone you called for the first time, they show you, you like it and place an offer – your buyer agent is entitled to the commission – not the agent that showed you the property.

Many times buyers hesitate to sign an exclusive right to represent with one agent. And many times agents are less than assertive about getting these documents signed. Agents are so set in their ways of working and running around with buyer’s they don’t think about protecting their own pay. They’re uncomfortable asking for the buyer to sign this document in fear of rejection. I really believe that buyer’s hesitate to sign this form, because they don’t understand it.  If explained correctly and discussed, it’s a no brainer.

I like to use the analogy, when agents list homes they sign an Exclusive Right to Sell, and the agent is loyal and they follow their  fiduciary responsibility.  The owner can’t go and list that house with another broker. Only one broker to list your house at a time. Well it’s the same with a Buyer, they should only hire one agent at a time. When a buyer signs an exclusive right to represent, the agent is now responsible for fiduciary duties to that buyer, just the same as the agent with the listing is responsible for fiduciary duties to that seller. Each side needs representation in order to close the deal successfully and without any issues.

So the Question is: Do Buyers or Sellers Pay the Buyer’s Agent?
This has caused a great deal of confusion in the real estate industry and with consumers. Generally, a listing agreement between the seller and the seller’s listing agent will specify how much the listing brokerage will pay the selling brokerage for  bringing the buyer. The MLS sheet will clearly state the commission that is offered to the Buyer’s agent. What’s on that sheet is the number the buyer agent will receive. The listing office commission is not visible on the MLS sheets, only what the owner is offering for the sale of their property to the selling agent.
Yes, you read that correctly. The seller, in effect, pays your buyer’s agent to negotiate on behalf of the buyer, not the seller. I also use the analogy – when you sit at a closing table, what does the seller put in the bowl? “Answer” KEYS and DEED. What does the buyer put in the bowl “answer” THE MONEY.  So in realty the seller accepted an offer that incorporates the commission, and the buyer is paying the commission as it is incorporated within the price they agreed to pay for the house and the owner agreed to accept.

Happy Buying – it’s a great time to live the American Dream!  Buy a Home Today.

Let us work with you as you Buyer’s Agent.

Buyers, the price of a buyer’s agent is usually built into your purchase price…and paid for by the seller. Why not use a Buyer’s Agent to work for you and with you? Call me!


About Toni Chrystal

Little About Terri Crozier and Toni Chrystal As business partners, identical twin sisters, and friends; Terri and Toni have an incredible synergy. To ask them where this comes from, they'd tell you it's just what happens when you combine their unique personalities and hard work ethic they both have. The passion for real estate and the compassion to educate and consult their seller and buyer clients is their first goal when listing or selling a home. They are both tech saavy with extensive computer and internet experience. Born and raised in White Plains, two veteran agents with a combined 35 years experience as Professional Realtors. Let "The Twins" Empower You with Knowledge and Information For each and every client their goal is to empower you with up to date information about current market conditions. Their approach has earned them the respect of collegues and clients throughout Westchester Counter and especially in their marketplace "White Plains". If you speak to Toni she would tell you "with over 93% of the consumers searching on line today; it is essential to be a tech saavy agent and be able to market for today's consumer on line." "We Listen" It's not about us ... it's about "YOU" whether a Seller Client or Buyer Client we appreciate your business and respect your goals and needs. As your real estate professionals our job is to "LISTEN" as well as "COMMUNICATE" to you so we all arrive at the closing table with a successful experience. Allow our expertise and guidance to take you through the priocess of selling or buying your next home. Contact us: Toni and Terri for all Your Real Estate Needs Full Time Professional Real Estate Associate Brokers Listing and Selling Homes for the Houlihan Lawrence White Plains Branch Office. Assist sellers and buyers with their real estate needs. Consult sellers on marketing conditions and pricing their property to sell. With a customized marketing plan and pricing strategy proven successful for getting homes sold in a timely manor. With a superb follow up system keeping sellers constantly updated with information necessary to achieve a successful and timely sale. Our goal is to provide such an amazing service that you "The Seller" can sit back and relax knowing you have competent agents working on your best behalf. Consult "buyers" on finding their dream home. Providing information and disclosures needed to make an informed decision to purchase a home that they can afford. Working with buyers to locate and educate them from the day we meet to the day we close, and continue to be your real estate agent for life. Proficient with technology and love computers and the internet. Skilled marketing properties on line for enhanced exposure around the world. www.tonichrystal.com
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