How the typical Realtor is paid:
A Realtor is paid by the seller. Unless the buyer has a special arrangement with their real estate agent, they do not pay Realtor fees. Several real estate outfits rebate a portion of their commission to the buyer. They have a different business model from traditional real estate agents. From my understanding, their agents are paid a salary and a small commission for a successful closing. Representing the seller, I have been in escrow with several, and the buyers got precisely what they didn’t pay for.
At the time a Los Angeles County homeowner lists their home for sale, they agree to pay a commission which is usually five to six percent. Commission rates typically vary based on the marketing plan and service offered.
In closing, the listing agent is not reimbursed for expenses such as professional photography, property brochures, advertising, etc. When more than one brokerage is involved in the transaction (one representing the buyer and one representing the seller), the commission is split between the two. Each broker keeps a portion of the commission, which pays for advertising, operational expenses, etc. The broker then pays their agent based on their split. Top-producing Realtors generally have higher splits than new agents. (Brokers earn more income from new agents).
