How Real Estate Commissions Work
In order to understand how real estate commissions are paid, it’s necessary to first understand the tool used in the vast majority of all home purchases: a Multiple Listing Service.
Multiple Listing Services, or local broker marketplaces, are essentially databases of all the homes for sale in a given market, maintained in most cases by local REALTOR® associations. Local REALTOR® associations also make most of this information publicly available for free, and each database often feeds home search sites.
When a seller lists a property on one of these local broker marketplaces with a listing broker, they get access to the largest pool of possible buyers that have been brought to the marketplace by buyer brokers. Meanwhile, buyers can work with any broker and see ALL homes for sale.
So where do commissions come in? Typically, the seller’s broker pays the buyer broker’s commission for finding a ready, willing and able buyer. This creates a larger pool of buyers for sellers and saves sellers time and money by working with an established group of brokers. For buyers, it saves them money at closing and enables the buyer to receive professional representation.
Read More: realestatecommissions.com
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