How do real estate agents get paid in Northern Virginia is a question often asked and many times with some apprehension. First time homebuyers as well as experienced homeowners may not know how the real estate agent that represents them gets paid. In a lifetime most purchase and sell a home only a few times and home buyers today expect to stay in their next home for an average of 12 years as reported by the National Association of Realtors. With such infrequency it is understandable why this question comes up often as well as many other questions along the way, and the primary reason to have a real estate agent by your side whether buying a home or selling a home in Northern VA.
The custom and general rule of thumb for Northern Virginia real estate is the home seller pays all the commission in a real estate transaction including the buyer’s real estate agent. (First time home buyers rejoice!)
This process starts when a home seller decides to sell their home in Northern VA and chooses the best real estate agent to list their home, here is some guidance on How to Choose the Best Listing Agent. All the terms of the commissions to be paid are decided upon and laid out in the listing agreement between the listing broker/agent and home seller before a home goes on the Northern VA market to be sold. The agreement will specify the amount of the commission the seller will pay the listing broker and the amount to be paid to the buyer broker at settlement of the property. If the listing broker also represents the buyer, then the entire commission is paid to the one broker.
Only a licensed principle broker/firm can be paid a commission in Northern Va for the sale of another person’s real estate. The broker then pays the agent a portion of the commission after settlement.
Make PaymentThere are two things buyers should be aware of when it comes to hiring a Northern VA agent. The first aspect buyers need to keep in mind in regards to “who pays the commission” is, what if the seller is not offering to pay enough to your buyer agent? All buyers should sign a Buyer Broker Agreement with an agent, so the agent represents the buyers best interest in the process and details to the commission are specified. For further information on buyer representation read Caveat Emptor, or Buyer Beware in Virginia.
The standard agreement in Northern Virginia has a minimum commission amount the buyer broker agrees to get paid. If the sellers are paying less then this amount, The buyers will have to come out of pocket for the difference. The good news for buyers is their agent will know before looking at a home, the amount of commission the sellers are paying. This does not happen often but buyers should request their agent to let them know when the sellers are not offering to pay the entire commission.
The second is that many Real estate brokers and/or agents add other fees to the agreement that buyers are required to pay. These fees may be called processing fees, administrative fees, or additional commissions. My experience working for large firms and owning my own small brokerage firm for a decade is all buyers should refuse to pay any extra fee charged by their broker. This should be discussed with the agent at the time of signing the buyer broker agreement and removed from that agreement.
How a real estate agent gets paid in Northern Virginia can be a bit confusing, but should be discussed up front and agreed upon in a listing agreement or buyer broker agreement. Please contact me if you would like a free consultation to discuss selling your home and/or for representation as your buyer agent.