Does the Buyer or the Seller Pay an Agent’s Commission?

We’re back for another edition of “You’ve Got Questions, We’ve Got Answers.” Today’s question is: Who pays the commission in a real estate transaction?

Many buyer’s agents lead people to believe that because the seller is offering the commission amount, the seller is paying the commission. Then, the listing agent says that because the buyer is bringing the money to the table, it’s really them that is paying the commission. So, which one is it really?

If you think of a transaction as a pie, there’s a sliver of that pie that goes to the listing agent and listing company. There’s also a sliver that goes to the buyer’s agent and the buyer’s broker. That money comes funded from the transaction of the sale, so it ends up being the buyer who is actually paying for it. 

In effect, the buyer who brings the money to the table exchanges money for the property and that's where the commission comes from. However, the seller does technically offer the amount to the agent who brings the buyer, so it’s a little bit of both.

If you have any other questions, don’t hesitate to give me a call or send me an email. I look forward to hearing from you.

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