Cherie Dabdoub -Latter & Blum

Whether you are a home buyer or seller, you’re likely to work with a real estate agent for your transaction. According to the National Association of Realtors’ 2013 Profile of Home Buyers and Sellers, just 9% of homeowners in 2012 opted to sell their home without the services of a real estate professional, and many of those “For Sale by Owner” transactions involved buyers and sellers who were rela

ted or already knew each other. On the buyers’ side, 88% of home buyers worked with a real estate professional. Unlike other professionals who bill their clients at hourly rates or present an invoice at the end of a project, real estate professionals are paid at the end of a sales transaction. If a real estate agent works with a buyer or a seller for weeks or months without a resulting transaction, they aren’t paid for their time. REALTORS® earn a commission based on the sales price of the home and receive that commission only after the transaction goes to settlement. Commissions are negotiable between listing agents and their clients. Some brokerages offer commission discounts for sellers, but a typical commission is 6% of the sales price. In many cases the commission is evenly split between the buyers’ agent and the listing agent, but sometimes the split is negotiated unevenly. For example, a seller could agree to pay a 5.5% commission divided so that the listing agent receives 3% and the buyers’ agent receives 2.5% of the listing.