Commission Origin-Traditional Model: When a seller lists their home, historically they agree to pay a commission to their real estate agent (the listing broker) as part of the listing agreement. This commission is usually a percentage of the sale price of the home. Sharing the Commission: The listing agent, with the seller's agreement to allow for “cooperation and compensation”, offers a portion of commission to buyer's agents as an incentive for bringing a buyer to the property. This split is usually predetermined and historically was displayed in the MLS (Multiple Listing Service) as a “guaranteed” payment to the Buyer’s Agent. But due to recent regulatory changes, the public display in the MLS is being prohibited as early as July 2024. A s the buyer, under this model you generally don't pay the commission directly out of pocket. It's the seller who pays the commission out of the proceeds of the sale either directly to the buyer broker, or to their Listing broker , who pays the buyer broker.
Closing Transaction: The commission is paid at closing. Once the property transaction is completed, the commission is disbursed as per the agreements to the respective brokers/agents.
Key Takeaway:
My role as your buyer's agent is to represent you and your interests in the home buying process, and this service, in a traditional setup, doesn’t add a direct cost to you as a buyer. The commission structure ensures that I am compensated for my efforts and services by receiving a portion of the commission paid by the seller to the listing brokerage. This setup allows me to focus entirely on your needs and interests, helping you find and purchase the ideal home.
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