How Does My Realtor Get Paid

If you’ve ever wondered how real estate agents make money, you’re not alone. Whether you’re buying or selling a home, it’s important to know who pays your Realtor, when they get paid, and what they actually do to earn that check.

 

Realtors aren’t paid by the hour or on a fixed salary like some jobs. Instead, most agents only get paid after a home is sold. Let’s look at how the process works and why that commission helps you get the best possible service.

 

How Selling a Home Works With Commission

If you're selling your home, one of the first things you'll do with your listing agent is talk about their commission rate. This is usually a percentage of the final sale price of your home. It’s written into your listing agreement.

So if your home sells for $300,000 and the commission is 6%, that would be $18,000 in commission fees. That number might sound high—but here’s what most people don’t realize: the seller's agent doesn’t keep the whole 6%.

Here’s how it usually breaks down:

  • 3% goes to the listing agent and their brokerage
     
  • 3% goes to the buyer’s agent and their brokerage
     

And even that 3% is often split again between the agent and the brokerage they work for. So your agent might actually take home 1.5% or less after all is said and done.

Commission rates are not set in stone. They may vary based on your location, your home's value, or your agent's services.

 

Buying a Home? Here's the Good News

If you're a buyer, you’ll be glad to hear this: you usually don’t pay your agent directly. When you buy a home, your agent gets paid through the seller’s commission agreement.

So when the seller pays that 6% commission, half of it goes to your agent for helping you find and close on the home. This is one of the reasons it's smart to work with a buyer's agent. You get professional advice and support, and it doesn't cost you anything extra!

Working with a buyer's agent can help you:

  • Understand the market
     
  • Tour homes that meet your needs
     
  • Make a smart offer
     
  • Avoid common mistakes
     
  • Navigate inspections and paperwork
     

Best of all? You get expert help without paying out of pocket.

 

Who Really Pays the Commission?

Technically, the seller pays both the buyer’s and seller’s agents. But because the commission is part of the final sale price, some people say that the buyer pays indirectly. That’s because the buyer is paying for the home, and some of that money goes to agent commissions.

Still, it’s important to know: as a buyer, you don’t write a check to your agent. Their commission comes out of the closing funds, which are handled by the title or escrow company.

 

What Happens If the Sale Falls Through?

One of the biggest differences between real estate and many other jobs is that agents don’t get paid until the deal is done. If a deal falls apart halfway through—for example, because of a bad inspection, financing issues, or a change of heart—the agents often walk away with nothing.

Even if they’ve already:

  • Shown multiple homes
     
  • Paid for marketing and photography
     
  • Spent time negotiating
     
  • Gathered paperwork and disclosures
     
  • Coordinated appointments and follow-ups
     

That’s why a good Realtor works hard to keep your deal moving forward—because their paycheck depends on a successful closing. 

 

What Does a Realtor Really Do to Earn That Money?

Real estate agents wear a lot of hats, and they do much more than most people realize. Here’s just a glimpse of what’s going on behind the scenes:

For Sellers:

  • Pricing the home based on local trends
     
  • Hiring professional photographers and stagers
     
  • Marketing the home online and offline
     
  • Hosting open houses and private showings
     
  • Reviewing offers and helping negotiate the best deal
     
  • Coordinating inspections, repairs, and appraisals
     
  • Handling contracts and making sure deadlines are met
     

For Buyers:

  • Helping you get pre-approved with a lender
     
  • Finding homes that match your needs and budget
     
  • Setting up tours and providing local insight
     
  • Writing strong offers that stand out
     
  • Explaining each step of the buying process
     
  • Negotiating repairs or credits after inspections
     
  • Communicating with lenders, sellers, and attorneys
     

It’s not just about selling a house—it’s about guiding people through a huge, often emotional, financial decision.

 

Can Commissions Be Negotiated?

Yes, they can. Commission rates are not fixed by law. Some agents may be willing to negotiate, especially if:

  • You’re selling a high-value home
     
  • You’re both buying and selling with the same agent
     
  • The market is slow and they want the listing
     
  • You're listing multiple properties
     

But remember: a lower commission might mean fewer services. So always ask what’s included in the agent's fee. You want to make sure you're still getting the experience, marketing, and attention you deserve.

 

Final Thoughts

Whether you’re buying or selling, knowing how your Realtor gets paid helps you make better choices and feel more confident in the process.

A good Realtor isn’t just there for the paycheck—they’re there to protect your best interests, handle the hard stuff, and guide you to a successful closing. When they do their job right, you win.

 

Let’s Talk About Your Next Move

Need help buying or selling a home? We’re ready to work hard, walk you through every step, and help you make the most of your real estate journey. Let’s chat and get you moving in the right direction!

Contact us today to get started!

Get In Touch

Community Updates

O'Farrell Sisters

O'Farrell Sisters in Okoboji

The O'Farrell Sister is a historic Okoboji Tradition that one must check out for breakfast and lunch!

'Farrell Sisters History
The O'Farrell Sisters restaurant was born in 1949 at the bridge on Hwy 71, between East and West Lake Okoboji. Edna Mae and Arlene O'Farrell bought the business from Ike Kissinger who was running for Sheriff of Dickinson County.

In the early years the girls were open seven days a week and had a booming business in no time. The fried chicken dinners on Sunday evenings were especially popular. There were times when the line waiting to get in was so long they'd have to lock the door and would often run out of chicken!

In 1959 Arlene married and moved to Tallahassee, Florida with her husband Furman Henderson. Edna Mae and Ferne continued in the restaurant, moving to its present location that same year. This spot had a garden and chicken coup, which was moved to the house across the street.

Ferne died in 1974 and Edna Mae in 1978. Arlene sold the business to nieces Joyce Gapinski, Jo Ann Anderson, Charlotte Sarvie and Cheri Petersen (these are married names). The nieces successfully ran the restaurant from 1979 through 2003. After losing Jo Ann in 1997 and Cheri in 2002, Joyce and Charlotte decided to sell after the 2003 season.

The rest is to be continued...

Real Estate and MLS Homes For Sale in Okoboji

H-LP State Football Runner-Ups 2016

H-LP State Football Runner-Ups 2016 in Lake Park

A big Congrats to the Harris Lake Park football team on a fantastic historical season. The wolves dominated the competition all year long, punching their ticket to the UNI Dome for the 8 Man Football Playoffs. In the Semi-Final game the Wolves were able to continue the undefeated streak and beat Fremont Mills 35 to 21, giving them the opportunity to compete for the 8 Man Football State Championship. The Wolves battled hard against Don Bosco, Gilbertville, but unfortunately came up a little short and lost a hard fought game 21-48. Awesome Job on a GREAT season Wolves, it was very fun to see how much the community came together to support you guys. CONGRATS!

Real Estate and MLS Homes For Sale in Lake Park

Taco House

One of a kind Authentic Mexican Cuisine right here in West Okoboji! A local favorite and rated five stars by visitors young and old. Be sure to put this as a favorite on your list of places to not miss when you are vacationing in the Lakes area. Close to Terrace Park so if you are feeling up for a small walk you may walk from Terrace Park to the Taco House.

Real Estate and MLS Homes For Sale in West Okoboji

Subscribe To Our Newsletter