How do real estate agents work?
In most real estate sales transactions the seller pays the commission, the buyer’s agent gets part of the total commission. In effect that makes the agent’s services free to the buyer. There are still closing costs that both sides have to pay, but the commission is usually paid by the seller. The dollar amount of the commission may seem a bit high, but there is a lot of work that goes into a real estate deal. When someone offers a discounted commission rate you have to ask what it is that they’re NOT doing for you, compared to a higher-rate commission. The listing agent is responsible for marketing the property, and that’s usually where the discounters cut corners. Agents’ commissions also pay the overhead at the broker’s office, and no one will stay in business very long charging 1% for listing and marketing a house. For example, in my office, for the first 5 months of this year, the average property was on the market 68 days when the sale was made. The closest competition was 85 days
