Most real estate agents earn a commission when they sell homes or properties. This

is a percentage of the home’s sale price and is typically split between the buyer’s

agent and seller’s agent. Real estate agents also have expenses such as office

furniture, copies and yard signs, so it’s important that they make enough money to

pay for these necessities as well as to save for taxes and future transactions.

Many people wonder how much a realtor makes and where the money comes from.

Most people assume that the commission is paid by the sellers and is a cost of

buying or selling a property. However, the reality is a bit more complicated than

that. While the commission is technically paid by the home sellers, it is reflected in

the final sales price and the home buyers are essentially footing the bill at closing.

The good news is that the seller is responsible for paying the agent fees at the time

of the close of escrow, and the buyer can often negotiate with the real estate agent

to pay their fees. This is especially common when a motivated seller is trying to

close the deal quickly.

It’s also important to note that the majority of real estate commission payments are

made through brokers and not directly to the real estate agents. The listing broker

usually pays the agent their share of the commission, and then the buyer’s broker

may pay their own agent. Regardless, the agent is still getting the same amount of

money and is working just as hard for their client.


Aside from the obvious monetary benefits, commission payments are also taxdeductible for both the agent and the brokerage firm. This means that an agent can end up with significantly more money than they would have received had they

worked as an employee at a company. In addition, the agency itself will also benefit

from the additional revenue as they will be able to increase salaries and bonuses for

their agents. For more info

How does this impact the market? While it’s true that most homes are sold through

traditional real estate agencies, it is also true that there are a number of 1% agents

who are competing in the marketplace. These agents are often able to offer lower

rates than traditional real estate agencies and may be able to help home sellers and

buyers find each other more easily.

If you’re thinking about purchasing or selling a property, Clever can connect you

with top-rated local real estate agents who are ready to work for less. Use our free

agent matching service to find an agent who fits your needs and budget, then lock in

a low 1% rate at the time of booking. Start your search today!