The answer is: it depends. Customarily, the broker’s commission is paid by the seller out of the proceeds of the sale and the buyer’s broker receives whatever percentage has been agreed upon in the listing agreement. However, in some cases, 1/2 (or some other negotiated percentage) is paid the the buyer if he/she has engaged a Buyer’s Agent who describes such a fee structure in the buyer’s agency agreement.
I highly recommend you engage a buyer’s agent/broker to represent you and determine up front what fees, if any, he/she requires to be paid by you.
Just want to make sure I understand the role of the RE agent/broker. As I understand it, a property is listed with the MLS by the seller’s broker and the broker usually gets a 6% fee when it is sold. But WHO pays that fee, the seller or the buyer? I have also heard of a situation where the buyer has a broker and the fee is split between the two brokers. Again, who foots the broker’s bill? Seller or buyer?
I ask because I was thinking of asking a broker to help me find properties to wholesale and rehab. We haven’t talked fees yet, but I was under the assumption that her fee would be split with the seller’s broker at closing and the seller would pay them both. Am I dreaming?
Real estate broker fees come out of the proceeds from the sale(in most cases, the lender). The 4 to 6% commission you are talking about is split between buyer and seller’s agent per the agreement between the agents, though it is most often set by the selling agent prior to the property being listed. It is okay to think of it in the sense that you are not paying the fee directly, but thought of another way, that percentage is built in to the price. I say this because I always recommend to my non-realtor represented buyer clients to take 3% right off the top before they even think of their offer price. Not much a seller can say in defense of this reasoning since neither she nor her realtor was getting that 3% anyway.