Most of the time, I work for nothing. No, I'm not trying to be funny. It's true. When a Realtor is showing property to a buyer and helping the buyer prepare an offer, the Realtor is working on his or her own time, at his or her own expense.  Nobody is paying the Realtor anything.

Realtors don't get a regular paycheck or a mileage allowance. They get paid commissions only, and only when they close a sale.

So, if you are a buyer, a Realtor is a real bargain. The Realtor talks with you to determine which properties you would like to see, he or she makes all necessary appointments, and then takes you around and shows you the properties. This process may be repeated several times. Finally, you select a property and the Realtor fills out your offer for you and presents it to the listing agent. These services are free to you as a buyer.

Who pays the Realtor? The seller does. When a seller signs a listing agreement with a broker, he or she agrees to pay a brokerage fee -- a sales commission -- when the broker has fulfilled the terms of his agreement with the seller. The broker will split the commission with the agent who listed the property (the listing agent) or the agent who showed and sold the property (the selling agent).

But ... think about this for a moment. Brokers get paid by sellers, and brokers in turn pay the agents. Where does the seller get the money to pay the broker's commission? He gets it from you, the buyer. It is part of what you pay the seller for his or her property. The seller then passes that part of your money on to the broker who listed the property. If you were working with a different broker to buy the property, the listing broker splits the commission with the selling broker, and they both split with the listing and selling agents.

In essence, you as the buyer will pay the brokerage fee when you pay the seller for the property. For this reason, you may want to think about being represented by a Realtor. When you are being represented, you are a client of the Realtor and the Realtor's broker. If you are not being represented, you are a customer only. There's an important difference, which is the subject of another FAQ.