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How Do Buyer Agents Get Paid

Real Estate Agent with eXp Realty

This morning I was reading Tom Ferry's blog about how knowledgeable agents believe that they are explaining something to their clients, but they really are not.  The culprit of this miscommunication, as explained in the blog, is usually jargon (that age-old industry language that only people in the industry understand).

One such example the blog gave was answering the question of how agents are paid.  While I may be mistaken, I believe that the explanation that I provide during every buyer's consultation is very clear.  Nevertheless, correct me if I am wrong if it leaves you even more confused.  Read on as I explain 

How Do Buyers Agents Get Paid?

While going over the Buyer's Agency Agreement (which I never work without), this is what I say:

As your agent, in most cases the seller pays me.  For homes listed in the MLS (explanation provided), it is stated very clearly who is paying the commission and how much.  However, for homes not listed in the MLS, for example For Sale by Owner homes (FSBO), it may not be clear if the seller is paying the buyer's agent commission.  In which case, I would reach out to the For Sale by Owner to see if they are willing to pay a commission to the buyer's agent for bringing a buyer that result in a contract and ultimately a successful close.  (Note:  close or closing refers to the day where we all meet at the attorney's office to finalize the sale and the seller transfers the deed to the buyer).

If the For Sale by Owner is willing to pay the buyer's commission then I will have both of you sign a disclosure form indicating who will be paying my commission and how much.

If the For Sale by Owner is not paying a buyer's agent commission, then you will be responsible for paying my commission at closing.

In either case, I will make it very clear to you who is responsible for paying my commission so that everyone is clear.

Am I making sense?


Bill Salvatore - East Valley
Arizona Elite Properties - Chandler, AZ
Realtor - 602-999-0952 / em: golfArizona@cox.net

Thank you for sharing the real estate information.

Buyers and sellers in your area will benefit from your expertise.

Wishing you continued success. bill

Apr 14, 2022 06:12 AM
Charita Cadenhead
eXp Realty - Birmingham, AL
Serving Jefferson and Shelby Counties (Alabama)

Thanks Bill Salvatore - East Valley 

Apr 14, 2022 06:45 AM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Charita, that is exactly how I explain our payment as well.   Although, we are not seeing many FSBOs, thankfully.

Apr 14, 2022 07:17 AM
Charita Cadenhead

Joan Cox homes are in such short supply in the MLS and FSBOs have dramatically increased.  I have not had a situation yet with FSBO but eventually I probably will

Apr 14, 2022 09:18 AM
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Hi Charita - that is very clear and no jargon is in your explanation.

Apr 14, 2022 08:52 AM
Charita Cadenhead

Thanks Grant Schneider.  I try

Apr 14, 2022 09:19 AM
Richard Weeks
Dallas, TX
REALTOR®, Broker

Great information, thanks for sharing.  I hope you have a great day.

Apr 15, 2022 02:32 AM
Kat Palmiotti
eXp Commercial, Referral Divison - Kalispell, MT
Helping your Montana dreams take root

Yes, that is very clear. In most cases, the seller will pay the buyer agent commission, but there could be instances where the buyer will need to pay. And you are clear on when that might happen.

Apr 15, 2022 05:02 AM
Charita Cadenhead
eXp Realty - Birmingham, AL
Serving Jefferson and Shelby Counties (Alabama)

Thanks Richard Weeks and Kat Palmiotti. Thus far I have not had any instances where the buyer paid the commission, but it is definitely possible that it can and does happen.

Apr 18, 2022 06:24 AM
Debe Maxwell, CRS
Savvy + Company (704) 491-3310 - Charlotte, NC

You are spot-on, Charita! That is exactly how I am explaining it as well and lately, we are seeing more FSBOs here. We are having to negotiate with those sellers and most of the time, they are very fair. 

Jun 05, 2022 07:04 PM
Wanda Kubat-Nerdin - Wanda Can!
Red Rock Real Estate (435) 632-9374 - St. George, UT
St. George Utah Area Residential Sales Agent

Wanted to stop by and thank you for commenting on my page, Charita. Hope you get to blogging again, good to see you here!

Jan 17, 2023 05:52 PM
Charita Cadenhead

Thanks Wanda Kubat-Nerdin - Wanda Can!  Every now and again I make a faithful attempt to start blogging and I always get sidetracked.  Hopefully at some point I'll stay on track because I sure miss blogging and all of my AR friends.

Jan 18, 2023 04:24 AM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Charita, it was so nice to see you on my post, looks like you need to write some more.   You have been missed.

Jan 23, 2023 06:52 AM
Charita Cadenhead

Joan Cox hope you're doing well.  I know I miss y'all too.

Mar 16, 2023 10:03 AM