Who Pays the Realtors Commission?

Buying a home is a significant financial investment, and it's essential to understand all the costs involved. One of the most common questions that real estate buyers have is who pays the realtor's commission. In this blog post, we'll provide some clarity on this issue.

Typically, in a real estate transaction, the seller pays the realtor's commission. The commission is a percentage of the final sale price of the property and is usually split between the listing agent and the buyer's agent. The commission is paid out of the proceeds of the sale of the property, which means that the seller is responsible for paying the commission to both agents.

As a buyer, you don't typically have to pay your realtor's commission. However, there may be some circumstances where you may be responsible for paying a commission to your realtor. For example, if you're working with a buyer's agent who's not offering their services for free, you may be responsible for paying a commission to them. It's crucial to clarify this with your realtor before you start working with them.

It's also important to note that while the seller is responsible for paying the commission, the cost of the commission may be factored into the final sale price of the property. This means that as a buyer, you may indirectly pay for the commission in the form of a higher sale price. It's essential to consider this when setting your budget for buying a home.

It's worth noting that realtor commissions are negotiable. While the typical commission rate is around 5%, it's possible to negotiate a lower rate with your realtor. This is particularly true if you're buying a high-end property where the commission could be substantial.

In conclusion, typically in a real estate transaction, the seller pays the realtor's commission. As a buyer, you don't typically have to pay your realtor's commission, but there may be some circumstances where you may be responsible for paying a commission. The cost of the commission may be factored into the final sale price of the property, so it's important to consider this when setting your budget for buying a home. Realtor commissions are negotiable, so it's worth discussing this with your realtor to see if they're willing to work with you on the commission rate.