Don't go blindfolded to the bargaining table.

Everyone knows realtors earn commissions for the homes they sell, but many people don't realize who pays them and how the final amount is determined.

When a seller enters into a listing agreement to sell their home through a real estate broker, the listing agreement spells out how much compensation will be paid by the seller to the listing broker upon a successful close of escrow. This is one of the costs of selling a home.

The listing agreement also spells out how much of that total compensation will be shared with another broker whose agent brings the buyer. If the buyer is represented by their own agent, the buyer's agent will receive the compensation published in the MLS listing that was agreed upon by the seller and the listing broker.

If the listing broker represents the buyer, unless otherwise agreed to at the time of the listing, the listing broker will receive the full compensation and will not have to share it with another agent.

The listing agent has a responsibility to look out for the seller's best interest and bring them the highest possible sales price. A buyer should also have someone looking out for his best interest to negotiate the best possible price, terms and conditions on his behalf.

Many buyers don't know that the services of a professional realtor are free to them. In order for a buyer's agent to earn a commission they must meet prospective buyers, build a relationship with them and must do a good job to earn their trust. Buyers should have the confidence in their agent to negotiate a successful contract on their behalf and look out for their best interests throughout the transaction.

In California, what is referred to as "dual agency" is perfectly legal. The listing broker can first represent the seller, and then if a buyer comes along, that same agent can represent the buyer too. Although legal, it is a slippery slope when it comes to whose best interest is really being considered and sometimes it may not be easy to differentiate because everyone involved has a different perspective.

There are some people that believe they will get a "better deal" buying directly through the listing agent because the seller won't have to pay the buyers agent commission. Remember, the seller has agreed to pay a commission to the listing broker, irrespective of agency relationships. The listing broker may or may not reduce his commission, and he may or may not reduce the sales price by that amount, and he may or may not disclose seller's true bottom line. A lot depends on the integrity and honesty of the listing agent. Buyers are leaving a lot of grey areas wide open.

Finding a home is only one step in the entire home buying process. Why not take time to also search out a good realtor? After finding an agent that fits, stick with him and let him not only help find a home and look out for your best interest at the bargaining table.

But don't give the agent blind trust. Ask questions, conduct investigations, and seek out all of the information before making any major decision.