How Does An Agent ''earn'' Their Commission? When Do I Pay Them?

Lets face it: no one likes to pay commission. It is important to realize, however, that a real estate agent can sometimes obtain a higher selling price than an owner can. Apart from this financial benefit, an agent can also make your selling process easier and ease your mind during the sale–but it doesn’t come free. The most often overlooked value of a real estate Broker is the benifit of keeping you out of legal trouble by their knowledge of the sales forms, documents, and contractual language, educating you on the current laws and regulations as well.  Another value that a professional Broker can bring is their negotiating skills, especially when you have multiple offers, a highly skilled negotiator can help earn you thousands of dollars if this is handled properly, making the commission the earn a small price to pay for the benefits you receive. 

When signing the initial listing, a percentage or amount of money will be agreed upon for the commission. That varies from state to state, but most commissions are around six percent. If the home or property never sells, the real estate Broker will get no money at all, and if it does sell, the Broker will get their commission at closing.  The Broker takes all the risk, especially one that isn't shy about spending their time and money to acheive maximum results for you. 

When the property is ready to close, you will go to the title company and sign papers. As the seller, it won’t take very long to do this. This is usually a couple days before the actual closing date which is when keys are exchanged between your listing agent and the selling agent, so they can give them to the new owner. The title company will explain how all the proceeds from the sell were dispersed and then give you your check. The Broker will receive the commission after the deal is completed and the home has recorded at the county offices. Most people are pleased with the results, and feel the commission was money well spent.