How does a Realtor get paid?

One of my first time homeowners asked a really great question - How does a Realtor get paid? And another client, who had not purchased a home in quite a while, asked a similar question "Is a Realtor still paid by the seller? "

The majority of Realtor's work on commission. The rate of commission is determined, and agreed to in advance of a sale, or transaction, by the Realtor and their client. This should be a signed agreement so there is no confusion in the future!

Most Realtors are paid their commission by the seller's closing costs after the closing of a home. BUT, if a buyer of a home, and their buyer's agent, have agreed to pay their agent a certain commission, and the seller does not agree to meet that commission price, the buyer's closing costs may reflect the difference. The seller does not have the right to change the commission offered in the Multipe Listing Service (MLS), after an offer is made by a potential buyer.

Buyer's agents may work with For Sale by Owners (FSBO) in finding the right house for their client. In doing so many FSBO's may not pay a commission to an agent. This is when a buyer's agreement would kick in and the Realtor would be paid by the buyer's closing costs.

Realtors' are not allowed to be paid directly. Closing attorney's send all checks commission checks to the brokers, who in turn pays the agent.