In a home purchase, who pays the realtors involved, that is, the buyer's and seller's?

Asked by Deed, Arroyo Grande, CA Fri Aug 24, 2012

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Chasity Good…, Mortgage Broker Or Lender, Bakersfield, CA
Fri Aug 24, 2012
It is customary for the Seller to pay the real estate commissions however you have the ability to offer to relieve the Seller of some of those costs in an effort to make your offer more appealing than competing offers.

If you’d like more information on how to qualify for the purchase, feel free to call me.

Best wishes,

Chasity Goodson
Loan Officer at Pacific Funding Mortgage Division, PFMD
Phone: 661-343-8469
DRE License # 01877009
NMLS License # 317122
0 votes
Lance King, Agent, San Francisco, CA
Fri Aug 24, 2012
As pointed out below, the seller almost always pays the commission. However, there are some exceptions:

1. Auction - buyer would have to pay his/her agent/broker to advise, although most won't represent this kind of transaction because of liability.

2. FSBO (for sale by owner) - although a majority of these sellers will pay a buyer's agent, some won't, in which case the buyer would have to.

3. Some developers do not pay realtors in the initial offering phase. In this case the buyer would have to pay.

Please note however these are rare exceptions.

Best Regards,

Lance King/Owner-Managing Broker
DRE# 01384425
0 votes
Dee Oliver, Agent, Bakersfield, CA
Fri Aug 24, 2012
in 30 plus years of being a real estate agent, I have personally never had a buyer pay my commission. It could happen under some of the scenarios as set forth in the other responses, however.
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Arely Kuehl, Agent, Bakersfield, CA
Fri Aug 24, 2012
The bank or the sellers will pay for the realotors commission when the property is sold.
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Arely Kuehl, Agent, Bakersfield, CA
Fri Aug 24, 2012
The bank or the sellers will pay the realtors commission when escrow closes.

Arely Kuehl
Keller Williams
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Steve Quinta…, Agent, Albuquerque, NM
Fri Aug 24, 2012
The general rule is the seller pays the realtors involved in the deal. When this rule is followed, the money the buyer pays to the seller is usually the source of the money the seller pays to the realtors. In this case the price of the property is set and the realtor fees calculated on that price.

Another method is that the buyer will agree to pay the realtors. This can drive the total cost of the transaction down. In this case the property cost will be X, the fees Y, both to be paid by the buyer. This situation is not common.
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Valerie Ulrey, Agent, Bakersfield, CA
Fri Aug 24, 2012
This does not require a long answer, the fact is that the seller pays the commissions for the Realtors involved in a transaction.

As a buyer, you don't pay commission out of pocket.

Have a great day,
0 votes
Sally Lawren…, Agent, Tehachapi, CA
Fri Aug 24, 2012
Eric and Steve have both given you the short and typical answers. The longer version is that who pays the commission depends on a number of factors.

First, keep n mind that all commissions are negotiable in every transaction. Please don't interpret that to mean that brokers WILL agree to discount their commission.

As others have said, typically the commission offered is negotiated between the seller and the listing brokerage when the property is listed for sale.

There are also times when all or part of a commission may be paid by a buyer. If you enter into a Buyer-Broker Agreement with your agent it will include provisions for commission to be paid by the buyer. Again, all commissions are negotiable. Just be aware that there are some very good reasons for a buyer to agree to pay all or part of a commission.

Hope this helps.
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Steven Ornel…, Agent, Fremont, CA
Fri Aug 24, 2012

Typically, in CA, the Seller functionally pays the Buyer's Agent out of the sale proceeds.

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