45.5% of Home Sellers Didn’t Know Who Paid the Buyer’s Agent

Blog posted On March 28, 2019

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If you’re in the market for a home, or if you’ve bought or sold a home, you probably know that the Realtor or real estate agent does not get paid commission until the transaction is complete.  A new report from Clever Real Estate, an online platform that connects home buyers and sellers with agents, had some startling results.  Out of 1,000 homeowners selling their home around the country in 2019, an astounding 45.5% thought the home buyer paid the buyer’s agent’s commission.  

During the sale of a home, the selling agent represents the homeowner who is selling their home and the buyer’s agent represents the home buyer.  In some cases, the seller may choose to sell the home themselves as “For Sale By Owner” or FSBO, but there are distinct advantages to working with an agent.   Real estate agents have a stronger local network, experience with complicated paperwork, and access to potential buyers far beyond potential prospects who may pass by your home.  Some home sellers may also have a separate listing agent and selling agent.  In most transactions, the listing agent is paid commission by the seller once the home sale is complete.  They may sign an “exclusive right-to-sell” listing with the seller to ensure the agent or their brokerage is entitled to the compensation through an exclusive bilateral agreement between the agent and the seller. 

A buyer’s agent is also compensated by the home seller.  The home seller pays the listing brokerage.  The listing brokerage then pays both the listing agent and the buyer’s brokerage.  And then, the buyer’s brokerage pays the buyer’s agent.  When buying a home, many home buyers may assume that their agent’s fees are wrapped up in the closing costs.  There are some cases when the buyer might pay their agent’s brokerage directly, if they are buying a FSBO property with no commission offered, for example.  However, in most circumstances the seller is paying all of the agent’s involved. 

Some home buyers and sellers think they can save money on the transaction by not using a Realtor or real estate agent.  However, the National Association of Realtors (NAR) found that the average FSBO sales price was an overwhelming $60,000 less than the price of a home represented by an agent in 2016.  Working with a professional Realtor or real estate agent means you don’t have to worry about marketing, pricing, staging costs or paperwork.  

If you are buying a home in 2019, please let me know.


Sources: Apartment Therapy, the Balance, the Balance,