How Are Real Estate Agents Compensated?

Recently, I’ve had some people ask me how real estate agents are compensated for their work. The basic answer is that we get paid based on commission, but there’s a little more to it than that. Let’s talk about it. 

Every agent has access to a multiple listing system, also known as an MLS. Every listing on the MLS has a section dedicated to compensation for the agent. So when a buyer I’m working with asks me how much I charge, I let them know that my commission is provided through the listing. 

It’s also important to remember that most real estate transactions have two agents involved: a buyer agent and a seller agent. Both agents are paid through the listing price, so at the most basic level, agents’ commissions come from that. 

Commission-based income is common throughout the entire sales world, so it came into the real estate business from there. If your agent tries to charge you before the sale, think twice about who you’re working with. 

If you have any questions about today’s topic, please call or email me. I am always willing to help.