Essential Things To Know Regarding Real Estate Agent Commission Payment Terms
There are many real estate agents that are working in the country. A real estate agent is a person that represents the buyers interest in a transaction that involves real estate property. The responsibilities of real estate agents is to locate the property and bargain the cost for the buyer. There has been a misunderstanding on who is the right person that is supposed to pay real estate agents. Thus to answer this question there is need to get a clear understanding on the terms and payment of buyers real estate agents.
Commission is the amount of money that a real estate agent receives from the brokerage after closing a deal. An agent is a person that works under a broker. Therefore the buyer works with the agent through the permission of a broker. It is against the law for an agent to work directly with a client without a broker. Therefore the buyer is supposed to pay the broker who in return pays the agent. Even though agents have a different body with the brokers that must work together. Some are even regular employees that receive salaries from the brokers.
The channel of payment is usually long. This is because many people are involved in the process before closing a real estate deal. There is a procedure that is required in the procurement process. The seller of the property pay is the seller’s brokers. Secondly, the sellers broker then pays commission to the sellers agent. The third one is that the sellers broker pays the buyers agent broker. Then the buyers broker pays the buyers agent. If at all two agents are involved there is need to find the procuring cause. The agent that writes the offer is the agent that receives the commission.
There is also another one that is known as the double agency. This is whereby the same agent represents both the sellers and the buyers. In this case, the agent receives all the pay. Some states do not allow dual agency. Thus, when seeking for the services of real estate agents they should ensure that they only hire the sole companies. Working with the same company might bring conflicts since one’s interest are not represented well considered that it is the corresponding agency.
The amount of commission that the buyer’s agent receives is determined by various factors. The commission can be an average of 4% of the price of the property. The money is usually shared between both the brokers. It is also possible for the seller to sell the property without involving a sellers real estate agency. When this happens the seller of the property should include that the owner is selling the property.
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