Hey, this is Jeremy from Shine Insurance and I’m here today with Beth Ellis, a broker at Tim Ellis Realtors & Auctioneers. She’s been doing it for 16 years. She understands how the real estate market works and she’s just an awesome lady so we’re going to chat with her about how realtors get paid, so Beth, welcome. – [Beth] Thank you so much, Jeremy. – [Jeremy] So how do realtors get paid? – [Beth] That is a really good question. (Jeremy laughs) And honestly, first time buyers are not comfortable asking that because they’re not sure how the process works. – [Jeremy] Yeah. – [Beth] So generally speaking, the way that it works is when a realtor lists a house for sale, they have negotiated a commission with that seller. And when they put that house in the MLS, which is our homes database, they have agreed to cooperate with the buyer’s realtor and pay them at the closing. So the buyers, it’s great news for the buyers, they don’t pay us, the sellers pay the realtors and that is a negotiated, up-front like I said with the seller of the home and the nice thing is that realtors can show buyers any house that’s for sale in our market that’s been listed by another realtor or by their own company.
We don’t have to show just the ones that we have for sale because we know that we’re gonna get paid if our buyers buy any of those houses that are listed on the market. – [Jeremy] OK, so let me see if I get this straight. A buyer does not pay for a realtor. – [Beth] Right. – [Jeremy] A seller pays for both realtors.
– [Beth] Right. – [Jeremy] Based on a negotiation they did before listing the property. – [Beth] Right, when they sit down and meet with the listing realtor they negotiate out a commission. They agree to that, that’s part of the listing contract that the seller would sign with their realtor and then when that person puts that house for sale in our MLS database, it clearly shows that they are cooperating with the buyer’s agent and that the buyer’s agent will get paid at closing if that buyer buys that property. – [Jeremy] And is there a wide array of amounts of money you can get paid? So if you’re a representative buyer do you necessarily know what you’re gonna get paid? – [Beth] I do know what I’m gonna get paid, because the listing agent puts that information on the private side of the realtor database of our MLS database and there are wide varieties of fees that we get paid.
We do not have a standard or a set fee. It’s illegal for us to get together and say we’re all going to charge one million dollars for each listing, that fee is always negotiated between the listing agent and the seller. – [Jeremy] OK, can you give us some example of what that fee could look like somewhere. Is it a percentage that it’s offering? – [Beth] It’s a percentage of the sale price, not of the list price. – [Jeremy] OK. – [Beth] And so depending on what the listing agent did with the seller, some of those people split that fee evenly with the listing agent and the selling agent and sometimes they don’t split it evenly.
– [Jeremy] OK, so seller pays both realtors. That’s based on a percentage usually of the selling price. – [Beth] Right. – [Jeremy] Could vary for different scenarios, but ultimately if you’re the buyer, if you are a buyer and you’re hiring a real estate agent you don’t really need to worry too much about that. – [Beth] Exactly, and I tell my first time buyers there is absolutely no reason to buy a house without a realtor because, one, you don’t pay us, so that’s good news, and two, we know what we’re doing. And usually first time buyers don’t know what they’re doing and there’s no good reason for them to try and navigate through that process without a professional person helping them get the best deal on the best house for them through that process. – [Jeremy] So not only do you get the service of having a professional who’s inside the industry helping you walk through it, but you ultimately don’t even have to pay for it.
– [Beth] Right. – [Jeremy] OK, well I don’t see any reason to buy a house without a realtor. – [Beth] Absolutely. – [Jeremy] Thank you Beth so much for being with us. If someone wants to find you, how can they do so? – [Beth] Sure, my email is firstname.lastname@example.org – [Jeremy] All right, thank you so much. – [Beth] You’re welcome, thank you. – [Jeremy] If you enjoyed this video we’ve got a couple of more for you. The New Home Buyers Guide on our YouTube channel is one of the favorites that people watch all the time. It gives you a quick overview of the whole process from beginning to end. Home appraisals, if you don’t know what an appraisal is, you wonder what that part of the process is or you’re in it right now and you’re a little concerned about it, we answer eight common questions. And finally, Three Parts of Your Mortgage Payment. After you have bought that house and you start making those monthly payments, what are they made up of and what can you expect. So those are three videos you can go and check out as part of our YouTube channel. And finally, if you enjoyed the video there’s two super important things we need you to do right now.
The first one is subscribe to our channel. We’ll put great information out just like this video over and over again, help you with the new home buying process as well as insurance and other financial advice. And finally, share the video out in your social media networks. Good information is only great if it’s shared with others. Until the next time, have a wonderful day..
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