What is a Realtor and how do they get paid?
A Realtor is a registered name belonging to a Member of a Professional Association of Real Estate Agents. A Real Estate Agent is not necessarily a Realtor but a Realtor is a Real Estate Agent.
In order to practice real estate; a Real Estate Agent must complete specific related courses, pass a state-licensing exam, qualify to be bonded, and align with a Broker, such as Keller Williams.
A full time agent is typically available 5-7 days a week and all hours of the day. They do not get paid for any of their services until a transaction is completed and closed.
The Agent is responsible for all their own expenses, such as; Continued Education, Errors and Omission Insurance, Auto Liability Insurance, Gas and Auto Expenses, Advertising, Signs, their own Income Tax, Desk and Computer Fees to their Brokers, and any other costs involved in the course of their business.
A buyer has the option to enlist the services of an agent to be represented as a “Buyer’s Agent”. This is called a “Buyer’s Broker Agreement”. Signing this form is an agreement that the Buyer desires to work exclusively with the Specific Agent.
A Realtor is typically paid through the listing side of the real estate transaction. The seller negotiates a commission with their listing agent; typically a commission is between 5% and 10% of the sales price depending on the type of real estate offered. Once the transaction closes escrow generally the commission is split among the Selling Agent(s) and their Broker, the Buyer(s)’s Agent and their Broker.