One of the most common questions we come across when working with credit-challenged home buyers under our Buyer Investor Match program is this: Will I have to pay the real estate agent commission? The question makes sense because the realtor commission can amount to thousands of dollars in a home deal. It is usually up to six percent of the sales price, so if a home is sold for $200,000, the realtor will make $12,000. But before we discuss who pays the commission – whether the buyer or the seller or both, let’s first take a look at how it works:

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The process

When a home is put on the market for sale, the seller has the option of hiring a realtor to list the property. The listing agent will conduct a comparative market analysis (CMA), come up with an asking price and list the property on the area’s Multiple Listing Service (MLS) to promote the listing to others agents and buyers. The listing agent will also market the property through other methods also such as online marketing and an open house.

As a buyer, you will usually hire a different real estate agent. Your real estate agent will help you find a home, negotiate the asking price with the seller and her agent on your behalf, prepare an offer letter and help you with closing.

Who pays the commission and how it works?

The commission rate is negotiable, but as per the industry standards, most agents ask for nearly six percent of the sales price. Let’s assume the seller has agreed to pay the listing agent a 6 percent commission rate. For a home sold for $200,000, the commission will amount to $12,000.

When you enlist the service of a realtor to help you buy this home, you won’t pay your agent anything out of your own pocket. Your agent’s commission will be paid by the seller. Your agent and the listing agent will split this commission, so $6000 will go to your agent and his or her broker, while the remaining $6000 will go to listing agent and his or her broker. Real estate agents are required to operate under the supervision of a real estate broker.

Here at Buyer Investor March, we work with a network of experienced real estate agents. These agents help our credit-challenged buyers find the home of their choice.

Once a buyer finds the home, everything is on the autopilot. We have worked with so many credit-challenged buyers that the process can be easily replicated in every home deal that we find for our buyers. We work with a team of professionals including mortgage brokers, note servicers, lawyers and accountants who know their individual roles and complete the closing with coordination because we have perfected our system.

If you are struggling to get a home loan from a conventional lender, but can arrange for a minimum 15% down payment, we can help you realize your homeownership dream with owner financing. Just click on the button below to set an appointment with us using our online scheduler: