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I get asked this question every time I work with a first time buyer, so I thought I would write a little blog to explain this for all of those first time buyers out there. 🙂 There are two basic types of real estate transactions that real estate agents deal with: listings and sales. When a real estate agent lists a home for sale they typically charge the homeowner a commission for listing the property. Out of that commission, a lot of people are paid and typically the property is put on a real estate listing service called the multiple listing service or MLS. The MLS is a Realtor* database where the listing agent will offer any Buyers agent a commission if they bring the buyer to the transaction. In effect it is like an open marketplace between professionals. Now, the upside for those buyers who are looking to purchase a piece of real estate, is that the seller in effect pays your real estate agent to represent you.

So, when do you pay?  One day you will be on the selling side and you will have to pay that commission, which typically runs 6% of the purchase price.  Sellers should not worry too much about that 6% fee**. It is well spent;  in 2012 homes sold with a Realtor* sold for an average of $40,100 more*.WooHoo-RealEstateBuyersandSellers

The bottom line:

Sellers pay 6%** of the purchase price (enough to pay their agent and the buyers agent usually split equally).

Buyers pay: A possible transaction fee at closing typically $250-$495**. This fee does not have to be paid until you reach the closing table.

*Realtor is a registered trademark of the National Association of Realtors. National Association of Realtors website, www.Realtor.org provided statistics.
**This fee may vary from company to company from agent to agent.