At Burnett Real Estate Team, we truly believe that your Realtor (or Realtors) is your best friend during the home buying process. Aside from finding you the home of your dreams, your Realtor also works hard to keep your stress level low, study up on any neighborhoods you may be looking at moving into, and deals with lenders and sellers on your behalf.
On top of these things, Realtors are also available to you for any questions, concerns, or guidance you may need along the way. So how do these home-selling gurus make their money? Long story short, and contrary to popular belief—it’s usually not coming from you, the buyer, but is almost always paid by the Seller.
The long story, however, is a little bit more complex.
Before we dive into the long and the short of things, it will be pertinent that the following terms and titles are understood:
Real Estate Agent
Real Estate Agents have taken and passed their real estate classes, and have passed the real estate licensing exam per the conditions and requirements of their state. This may include achieving certain legal statuses or otherwise complying with specific legal requirements.
Realtors are real estate agents who are a part of the National Association of Realtors (NAR), which is comprised of “residential and commercial brokers, salespeople, property managers, appraisers, counselors, and others engaged in the real estate industry.”
Brokers continue their education past the requirements of real estate agents, and go on to receive their real estate broker license. Brokers can work on their own, while Realtors and real estate agents work underneath them. Incidentally, Cody Burnett is a Real Estate Broker, and not JUST a Realtor.
Generally, Realtors function as independent contractors, but are licensed in realty by their broker. Occasionally, Realtors will be paid salary by their broker, but this is a very uncommon case. For the most part, real estate agents are paid commission, which is distributed by their broker.
Here’s how real estate commissions are broken down:
The seller pays the listing brokerage, who then pays the listing agent, buyer’s brokerage, and finally, the Realtor.
So… How Much Do Realtors Make?
The commission that a Realtor makes is decided upon by the seller and the broker. Brokers make between a percentage of the price of the home being sold, with some flexibility due to price of living and expectations of the broker.
Unless otherwise agreed upon, the homebuyer is usually free from any further financial obligation to the broker or Realtor, beyond the percentage they will receive from the sale of the home. This percentage usually ranges from between 2%-3% of the agreed sale price of the home.
If your Realtor is not a licensed broker, and doesn’t have a licensed broker working over them, you are likely getting wrapped up in some sort of illegal home buying scam. Ask your Realtor who their broker is before you get involved with them, and if they report to you that they are independent of a broker, it’s probably a good idea to look elsewhere.
Trust is Key
Buying a new home can be a stressful experience for anyone. That’s why at Burnett Real Estate, we strive to make things as easy and pain-free for all of our clients. Having the right real estate company in your corner during the process can make all of the difference.
Are you thinking of moving to the Bentonville area? Why not Contact Us today and let Burnett Real Estate help make your homebuying experience one to remember.