How Do I Get Paid?

Real Estate Agent with Buyer's Advisors

This is a typical initial question people ask me.  "As my Buyer Agent, how do you get paid?"

Basically, as a Buyer Agent in NJ, I get paid the same way traditional real estate agents get paid. 

When a home buyer purchases a property with my help in NJ, the real estate commission: 

  • is due and paid at the closing on home, 

  • is always included in the asking price for a listed property,

  • averages between 5% and 6%.  For example, when a Buyer purchases a condo for $400,000, 5% (or $20,000) of the purchase price is the total real estate commission,

  • is typically paid 50% to the real estate office that listed the property and who works for the Seller (the Seller Agent) and 50% to the real estate office that brings and represents the Buyer (in my case, I am acting as my Buyer's Exclusive Buyer Agent).

  • is a negotiable percentage between the Seller and their Agent at the time the Selling Agent lists the Seller's property for sale (and, as I said it typically ranges between 5% - 6%).  However, it can be more, or less, or even include a bonus.

  • and, is only 3% for a property I help a home buyer buy that is a "For Sale By Owner" property (a property which is not listed by any real estate agency and is sold directly by the Seller or Builder without the aid of a Seller Agent). 

What I find most people do not understand is that they are going to pay the same total real estate commission using an agent who does not even work for them as they will pay if I help them purchase the same property.   However, there is a big difference because as their Buyer's Agent I work exclusively for my Home Buyer's best interests. I never work for the Seller, a Builder or a Developer against my client.

Moreover, by negotiating the best price, terms and conditions for my client, as well as helping them find favorable financing rates, terms, and closing fees, then they may actually end up pay less working with me and yet getting full representation.

Comments (5)

Doug Patterson
Keller Williams - Upstate Realty - Greenville, SC

Thanks for the reminders. This is information we need to tell our clients up front. I have been skirted before by buyers (customers, not clients) who run me all over the mountains and then quietly go directly to the listing agent expecting to save half the commission.

I have some of these pearls of wisdom on my web site. The more we can educate people up front, the better.

Aug 30, 2008 01:48 AM
Michael Almeida
Pillar To Post - Professional Home Inspection - North Arlington, NJ
Licensed New Jersey Home Inspector

You work hard...

You act professional and ethically... 

You should be compensated accordingly!

Nov 26, 2008 09:47 PM
Demetria Scott, Baltimore, MD -- SRES, ABR
Long & Foster Real Estate - Baltimore, MD

Great explanation on how we are compensated in a transaction!  Often, I find that it is much easier to help Buyers understand how we get paid during an initial office consultation.  It helps to set the professional tenor for the working relationship and build trust between you and the new buyers.

Nov 26, 2008 10:20 PM
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Good information for buyers. Many do not have an idea of how we get paid.

Nov 27, 2008 07:53 AM
Paul Howard
Paul Howard, Broker, Paul Howard Realty 856-488-8444 - Cherry Hill, NJ
Paul Howard Realty, 856-488-8444


I get paid based on what is in my buyer agent agreement.  I don't really care what the "offer" of compensation is in a listing. 

Recently I had an agent call regarding an offer my buyer placed. It provided for the seller to pay my commission (as provided by the buyer broker agreement) of 3 % of the purchase price.

The agent pointed out that the MLS offering was for 3.5 % so why was I giving up .5%.  They don't usually question it when I give up a higher percentage or a 'bonus' when my buyer makes an offer excluding them. 

Funny,  I almost always get a little resistance when my buyer conditions the offer on 3% if the MLS offering was only 2.5 or 2%.

Paul Howard

Dec 05, 2008 03:14 AM