If you’re buying or selling a home, you may wonder about additional costs beyond the price. The question many people ask is, “how do realtors get paid?” If you’re a homebuyer, you can relax, because buyers usually don’t pay realtor fees. It’s generally the responsibility of home sellers to pay realtor fees. So if you’re selling your home, keep reading to understand the process better.

By Julie Bawden-Davis | February 17, 2020

When are realtor commissions paid?

To answer the question, “how do realtors get paid,” it’s important to understand when they get paid first. Real estate agents get paid only after the home sale closing. “Commission payments are a line item on the closing statement. The brokerage disburses these fees once the sale records with the Registry of Deeds,” says Kate Ziegler, a Realtor with Arborview Realty in Boston.

“Sellers pay a percentage of the sale price as a commission split between the agents representing the buyer and the seller/listing agent,” says Ziegler. “No up-front payments or hourly fees exist. Agents receive payment when the deal is done.”

Why sellers pay commission costs

According to Ziegler, the intention of not having a buyers agent fee is to reduce the financial burden of buyers.

“Sellers pay all commissions in a residential sale. That way, buyers aren’t adding agent fees to their list of closing costs,” says Ziegler. “With down payments and closing costs, buyers already put up a large investment to buy. Sellers, in theory, expect some proceeds from the sale. And they can use those proceeds to pay commissions at closing.”

However, it’s essential to keep in mind that commissions come from a percentage of the home sale price. That means both the listing agent and their seller work for the best possible price for the property.

“If you’re the buyer and have a tight budget, think about working with your agent to get creative,” suggests Ziegler. “It’s possible to save money other ways, such as with a quicker closing timeline.”

Continue to SuperMoney for the full overview.