How Does a Real Estate Agent Get Paid?

Our first-time buyer clients typically ask us plenty of questions about the process of purchasing a home. The one question that gets asked every. single. time?

How does a real estate agent get paid?

And a common follow-up question is, “What do you actually do for me?

A real estate market couldn’t survive without property, right? So here’s how it works. A homeowner (or landowner) wants to sell. The property gets put on the real estate market at a specified price, with an agreement to pay any real estate agents involved in the transaction a percentage of the final sales price. In essence, the buyer is paying the seller for the property, and the seller then takes some of that money and pays the listing firm, who shares a portion with the buyer’s broker.

Here’s an example:

John Doe chooses Zach Koops (of your favorite real estate team in Harrisonburg, of course!), who is part of the larger brokerage, Kline May Realty, to be his real estate agent. Zach shows John a number of properties, and John then decides he’d like to buy 123 Main Street. Zach helps John write up a contract, with a purchase price of $150,000. The seller accepts, and the contract is signed by all parties (bonus vocabulary lesson: this is also known as ratification). A bunch of stuff happens between the signing of the contract and the closing table, such as home inspections, radon tests, loan processing, etc., and when the day finally arrives that John Doe gets the keys to his new property, he pays the seller his $150,000, and Seller pays his own listing broker, who shares a specified portion of the total brokerage fee with Kline May Realty. The brokerages then pay their agents (so, Zach from Kline May) a pre-determined percentage of their cut.

As for what buyer’s agents actually do for their clients? Well, we can’t speak for every agent out there, but we can explain what we do:

  • First of all, we’re a team of agents, so our clients work with a specific agent (Zach in the example above), but our whole team works to provide the best service to our clients. [Read more about how a real estate team works.]
  • We search a number of sources for properties that match the buyer’s criteria.
  • We keep an eye and an ear open for “secretly listed” properties.
  • We schedule showings and walk through properties with our clients.
  • We write up contracts while carefully explaining each section to our clients so that they fully understand what they are signing.
  • We use our excellent and proven successful negotiating skills to get a fair deal for our clients.
  • We set up any tests and home inspections that need to be done on the property.
  • We send all applicable documents to the parties involved in the transaction, like the mortgage broker and settlement agent.
  • We handle all of the details from contract to closing and beyond, to make it a smooth, worry-free process for our clients.
  • We sit at the closing table with our clients, and get to shake their hands afterwards with warm congratulations!
  • We follow up after our clients are all moved in and settled to answer any questions and make sure they are satisfied with their purchase.
  • We keep up with our clients throughout the year, because oftentimes, they become our friends. (Just another reason we love what we do!)

Are you thinking of purchasing a home in Harrisonburg or Rockingham County? Check out more reasons why you should choose us, get to know us a bit better, and let us know how we can assist you in your real estate endeavors — whether it’s your first time, last time, or somewhere in between. We’re thrilled to get to know you and help you accomplish real estate success!

About Lisa Oates

Lisa is the creative mind behind The Harrisonburg Homes Team, providing streamlined content management, quality authorship, and graphic design for Harrisonblog. She's passionate about blogging, enjoying life, and a good cup of coffee.