Home Buying in Corona>Question Details

J, Home Buyer in Corona, CA

When does a real estate agent or broker receive their commision during the buying process?

Asked by J, Corona, CA Thu Jul 17, 2008

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Please see Elise Timpe's answer it is correct and very complete.
0 votes Thank Flag Link Mon Sep 22, 2014
The broker receives the commission check from the title company at the closing of the transaction.
0 votes Thank Flag Link Sun Sep 21, 2014
Amazing how many wrong answers are posted here. Elise Timpe's answer is the correct one.
0 votes Thank Flag Link Wed Aug 21, 2013
Real Estate Agents/Brokers receive their commission only after the transaction has successfully closed. The commission check is not given directly to the agent/broker but paid to their company who then issues a check after having deducted the companies portion.

We earn no salary, and no other income and this is why 80% of the people who get a real estate license are out of the business within the first two years.
0 votes Thank Flag Link Fri Aug 9, 2013
Real estate agents receive their commission check when escrow is funded at the closing table. The check is then given to broker of their office, deposited and normally within a week receives their portion (or split) of the commission.
0 votes Thank Flag Link Fri Aug 9, 2013
In California, commissions are received by the brokers after the sale closes. The escrow company disburses funds after the closing. Closing usually takes place the day after funding. The commission is disbursed to the brokers of the buyers and seller's agents, who then give the agents their portion. Sometimes, this takes up to a week or so if the check has to go through corporate offices of the broker to get divided up. There are also times when the check is further withheld from the agent by the broker because the paperwork is incomplete.

Buyer broker agreements are becoming more common. They state that the buyer will ensure that their agent receives a certain percentage of the sales price as their commission or "salary" when the home closes. That means that if the listing agent and seller are offering less than that negotiated buyer brokers commission, the buyer makes up the difference. This frees up the buyer's agent to show FSBO homes and other's that they wouldn't normally be able to work with. As stated above, that commission is collected and disbursed by escrow after the sale closes.
0 votes Thank Flag Link Fri Aug 9, 2013
The title company pays the brokers office of agents and the sponsering brokers pay the sales agents.
0 votes Thank Flag Link Wed Jul 17, 2013

"I'm sure" J also wondered about your fellow agents answer on:
-- "Some people do not realize that buyers pay absolutely nothing for the services of a Realtor.."

Your misconception is with them...

0 votes Thank Flag Link Tue Aug 19, 2008
Hi J,

The contract between the seller and the listing broker defines when, how, and under what circumstances a broker’s compensation is earned. Until the recent few years, most listing contracts held that compensation was in the form of a commission and contingent upon producing a buyer. From earlier answers on this thread, most agents here are working on a contingency commission contract that has the Broker being paid a closing.

In recent years, we have seen the entrance of several alternative real estate business models providing sellers many choices. Sellers are often interested in saving fees and one way sellers can do this by paying flat fees upfront for partial or complete compensation to the broker who will represent them. There are many new models emerging that have a payment components at the beginning, middle and end of the transaction. There are also models where the listing broker fee is paid at the time a listing is taken, but the buyer broker fee is paid at closing. Fee compensation may be in the form a flat pre-determined amount, or a commission.

Buyer agency agreements are becoming increasingly common, and we are just beginning to hear more about retainers paid to buyer brokers. For those who view the buyer as the one paying the Brokerage fee, a retainer agreement can be quite acceptable.

It is still common for many brokers who are working on a contingency to receive their entire commission at closing. Commissions are often deemed earned when a ready, willing, and able buyer is presented to the seller. Although often deemed earned before that point, Brokers generally wait until closing to receive a contingent commission. The settlement agent (title company, broker, escrow agent, or attorney) will cut the checks to the Broker from proceeds at closing under this arrangement. Payments are made to the Broker, not the agent. Brokers then pay the agents based upon the contractual or employment agreement that exists between the brokerage and the agent.

While most answers on this thread stated that the Broker was paid at closing, and that has been common for many years, we are an industry in transition. While the contingent commission at closing remains the most common, it should not come a surprise to you if someone approaches you with an alternative business model or proposal.

Deborah Madey - Broker
Peninsula Realty Group - New Jersey
0 votes Thank Flag Link Tue Aug 19, 2008
Deborah Madey, Real Estate Pro in Brick, NJ

I didn't read in J's question an invitation to debate who pays the commission. I did read J ask when does a real estate broker receive their commission.


Please excuse the dialog with Tman. My apologies to you. Answering your question next.

0 votes Thank Flag Link Tue Aug 19, 2008
Deborah Madey, Real Estate Pro in Brick, NJ
J, good morning...

Contrary to what some agents might want consumers to think ... buyers *do pay* the commission on the sale of a home, anything else is just a false statement ...

This is a small excerpt from Mr. Michael Daly being refreshingly honest and candid yesterday:

-- "Oh no, Mr. Buyer, you dont pay our commission, it is paid by the Seller"
As the buyer writes the check to the seller that the seller uses to pay the commission...
....and we wonder why the consumer doesn't trust us...

That said .. depending on what state, most agents get a check at the closing table ..

0 votes Thank Flag Link Tue Aug 19, 2008
The Real Estate Agent does not get paid until escrow closes.
0 votes Thank Flag Link Tue Aug 19, 2008
Also, I noted that you asked about the "buying process". Some people do not realize that buyers pay absolutely nothing for the services of a Realtor. The seller pays the entire commission and only if and when a property sells and actually closes escrow. Then the payment distribution process begins. Many Realtors can work months and months without a paycheck, especially in a market like this where offers are not accepted, buyers lose their pre-qualification status due to changing lending laws, homes fall out of escrow due to short sale problems or foreclosure issues. I'm often curious when I find that the public has some great misconceptions about the process. So I'm really glad you asked this question so I can talk about it a little bit. Thanks. Good Luck. Cindy Vedder, Prudential California Realty, Riverside
0 votes Thank Flag Link Tue Jul 22, 2008
Commisions are paid to the agent's broker at closings who will then compensate the agent. That's how it is done in GA.
0 votes Thank Flag Link Thu Jul 17, 2008
Commisions are paid to the agent's broker who in-term will compensate the agent.
0 votes Thank Flag Link Thu Jul 17, 2008
Generally, the Broker receives the commission check at the close of escrow. The agent is then paid according to the Brokers policy after the commission check is processed through the Brokers accounting system and deductions are made for any Brokerage fees charged to the agent, referral fees and the payment is adjusted for the commission split.
0 votes Thank Flag Link Thu Jul 17, 2008
Shortly after close of escrow.


Broker Associate
Prudential California Realty
0 votes Thank Flag Link Thu Jul 17, 2008
Escrow gives the commission to the Broker after the transaction records and all monies are accounted for. Each Broker, in turn, has their own requirements to meet before they will release the commission to a real estate agent. Usually, it takes anywhere from 3 days to two weeks.
0 votes Thank Flag Link Thu Jul 17, 2008
Dear Just Looking,

Typically, the real estate agent receives their commission 2-4 days after close of escrow. Escrow has to close out the file and issue all the checks. Then the check gets sent to the broker who takes their cut and then reissues a check to the agent (unless escrow already took care of this). I have been paid as long as 1 week after close of escrow. An agent makes nothing until escrow closes.

I hope this answers your question.

Thank you!
Joan Patterson, B.A., A.S.P., G.R.I., Realtor
Keller Williams Realty
8250 White Oak Avenue, Ste 102
Rancho Cucamonga, CA 91730
0 votes Thank Flag Link Thu Jul 17, 2008
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