How Do Real Estate Agents Get Paid?

Why not call the listing agent?

The great state of Minnesota is an “Agency” state. This means buyers and sellers can choose an agency when enlisting the services of a professional real estate agent to help represent their best interest when involved in a real estate transaction. Typically, a real estate agent gets paid at the closing for representing a buyer or seller, and occasionally both.  So when purchasing an existing home or even new construction, it’s a good idea to have a buyer’s agent be your first point in contact and assist in representing your best interest through the transaction.

 

Do I need to sign a contract for representation?

Absolutely not. We bet you’re surprised at that. Truth is, representation and compensation are two different things. It’s required you review an “Agency Disclosure” form upon first substantive contact with an agent, but there are other options when it comes to working with an agent. These include non-agency, non-exclusive representation, and the exclusive right to represent. The last of which is most commonly found in our local market. Essentially, it binds an agent to working with a buyer in order to help them locate, negotiate, and close on a property that meets their needs. No offer, no purchase, and no closing, there will be no pay check. Occasionally, we see a provision for a retainer fee exchanged to begin the search.

 

The day of compensation comes.

Yes, the day of closing has arrived! All stipulations have been settled with the underwriter and your title closer has a package of documents from the lender and instructions on how to carry out the closing. The HUD-1 settlement statement has been drafted and you have a cashier’s check sufficient for the amount of down-payment and / or closing costs needed in order to sign the paperwork and get your keys! At this point, your agent has performed approximately 125 different tasks in relation to your closing and is probably approaching 60 hours of time invested over the last 2-3 months. Coordinating the 19-plus professionals that were essential in getting your purchase to the closing is sometimes like herding cats, but to make this day feel like nothing had happened since you finished the inspection was a challenge, to say the least.

Nothing is better than seeing our clients walk out with a smile and the keys for their new home. The best part was beating out 3 or more other buyers to get the best home on the market in this area since you started looking. This is why we do it! You deserve to know your options and to be empowered to make a decision regarding your offer and transaction. At The Anew Real Estate Group, we base our guidance in education… never pushy or short. If you ask for our advice along the way we’re happy to provide it. And even if it means killing the sale and going back to the drawing board… your best interest is always at the core of our guidance.