How to Pay the Real Estate Agent





If you’re buying or selling a home, you will likely work with a real estate agent. It’s

important to know how they are paid so you can negotiate with them. Usually,

agents are paid through commission. This is a percentage of the home’s sale price

and is typically split between the seller’s agent and the buyer’s agent. Some agents

also charge a flat fee for their services.

Generally, a real estate agent’s compensation is based on the sales transaction.

However, there are exceptions to this rule. Real estate agents may charge a flat fee

for their services, or they may offer a rebate to the client once the closing process is

completed. These types of fees are often associated with discount brokerages and

can be quite attractive to sellers.

The majority of real estate professionals are compensated through a commission

structure. Real estate agents are paid a commission if they represent the seller of a

property to list the home, or if they represent the buyer in a purchase transaction. A

typical commission percentage is 6% of the home’s sale price.

As a seller, you can typically negotiate the real estate commission percentage with

the agent and broker you’re working with. Keep in mind, though, that the

commission percentage is only paid when a sale is closed and ownership of the

property has transferred. Regardless of how you negotiate the commission, it’s

crucial to understand the total sales price that is represented in the final sales


It’s also common for real estate agents to charge a referral fee. This is a fee that’s

agreed upon between the agent, broker and referrer that’s taken out of the total

commission before it’s split amongst everyone. The average referral fee is about

25% of the gross commission.

Real estate agents are also often required to pay a brokerage fee to their employer,

which is part of the total commission they’re receiving. The brokerage fee is usually

around 40% to 60% of the total commission, and it’s based on factors like how many

deals an agent closes and their track record with the brokerage. Read also:

In addition to the brokerage fee, real estate agents are also sometimes required to

pay for marketing expenses and other operational costs. This can add up quickly,

and it’s important to consider these additional costs when negotiating the total sales


Some brokers also require their agents to pay a franchise fee on every deal. This is a

fee that’s negotiated between the agent and broker to cover the cost of being

affiliated with the brokerage and the brand. Franchise fees aren’t common, but they

do exist and they can be significant.

Real estate agents aren’t paid as frequently as other professions, but they do have

the opportunity to earn substantial money throughout their careers. The amount of

time an agent spends on the job and the number of deals they facilitate are what

ultimately determine how much they make by the end of the year.