One key goal you may have in life is to buy a house. Buying a home is a long-term goal and investment. If this is something you are ready to do, you should start the process by hiring a real estate agent. When you hire an agent to help you buy a house, you will not have to pay the agent for his or her work. If you did not know this, you might be wondering how the agent will get paid for helping you buy a house. Here is an explanation of how this works.
The Seller of the House Pays a Commission
People who are buying homes must spend a lot of money closing on the properties they purchase. Because of this, people selling homes often take the burden of the costs involved with selling homes. Sellers are usually the ones who pay the commissions for all real estate deals, which means that buyers do not have to worry about paying the fees.
When a person lists their home for sale, they hire an agent to do the work for them. When they close on the house, the seller pays a commission for the sale.
The Commissions Get Split
So, if another agent listed the house you want to buy, how does your agent get paid for helping you buy the property? Real estate commissions do not go directly to the listing agent only. Instead, the agency splits the commissions between two different parties:
- The listing agent
- The selling agent
In addition, both agents may be required to share a portion of their commissions with the agencies they work for.
For example, suppose the commission for the house you are buying is $10,000. The listing agent might receive $5,000, and the selling agent might receive the other $5,000. Each of these agents may have to pay a portion of this amount to the agency they work for.
Home Sellers Account for Commissions in Their Asking Prices
While you are not directly paying a commission, you should know that home sellers account for the commissions in their asking prices. If a homeowner expects to pay a $10,000 commission, he or she may bump up the asking price of the house by $10,000 to help cover the costs of this fee.
If you have questions about commissions or buying a house, talk to a local real estate agent to learn more.Share