Realtors earn a commission when they sell a home. Whether the realtor represents the buyer or the seller, he or she earns money. But who pays those fees? If the buyer doesn’t have a realtor, but the seller lists with one, essentially, a realtor still earns a commission, so someone has to pay.

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Who pays the fees and how does it affect the buyer? Keep reading to find out.

Who’s Responsible for the Realtor Fees?

First, the important thing is who will pay the realtor fees? It typically amounts to 5% – 6% of the home’s sales price. A $200,000 home costs $10,000 – $12,000 in commission. That’s a lot of money.

Fortunately, the seller covers the realtor fees. But, don’t get too excited – in reality, the buyer pays them. Here’s how.

The seller builds the realtor’s commission into the cost of the home. Let’s say a seller wants $190,000 for his home. In other words, he wants to walk away with that amount. If the seller uses a realtor, he may ask for a selling price of $200,000 or higher. This way he still walks away with the amount he desired, but got to use a realtor.

A seller that doesn’t use a realtor, though, may be willing to ask $190,000 for the price of the home. In both cases, the seller walks away with the same amount of money. The only difference is who else has to get paid in the transaction.

Do Sellers Pay the Buyer’s Agent Commission?

Buyer and seller agents typically split the real estate commission. Most agents split it 50/50, but some agents make other arrangements too. If the buyer’s agent gets 50% of the fee, though, who pays it?

The answer remains the same – the seller pays the buyer’s agent too. Actually, the seller’s agent splits the commission with the buyer’s agent. The seller’s agent creates an agreement with the seller. The agreement includes the commission charge. The seller’s agent then agrees to share that commission with an agent the buyer uses.

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Do Buyers Ever Pay Realtor Fees?

Here’s the thing. Technically, buyers do pay the realtor fees. As we stated above, they are worked into the sales price of the home. While the buyer doesn’t physically write a check to the realtor, the buyer pays the fees.

However, if as a buyer, you have a real estate agent, but you don’t find a home to buy, you don’t owe the agent anything. Real estate agents only receive payment when you buy or sell a home.

Are Realtor Fees Included in the Closing Costs?

Yes, realtor fees are included on the Closing Disclosure. You’ll see them on the seller’s side of the disclosure. The closing agent balances the fees based on who owes which fee. The realtor’s fees come from the money wired by the bank.

For example:

You buy a home for $200,000 and got a loan for $160,000. The bank wires the $160,000 to the closing agent. You provide the closing agent with your portion of the down payment and closing costs. The closing agent then balances out the funds, disbursing them as necessary. This includes paying the realtor his or her commission from the sale of the home.

 Bottom Line

Realtor fees are costly, but realtors help keep everyone’s interest covered. When you and the seller each have an agent, everyone works together to create an agreement. If you fall in love with a home listed by a realtor, know that you have to pay the fees. The money won’t come right out of your own pocket at once; it will get included in your mortgage and paid over its term.

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