How are Realtor’s compensated for their efforts?
Realtors are independent contractors who are generally affiliated with a broker company. They work on a 100% commission basis and do not get paid until the transaction they assisted in closes. They do not receive benefits such as health insurance, 401k, or vacation pay.

The seller of a home, for the most part, pays a commission to the broker company that listed their home. The listing broker then splits the commission keeping a portion for their company and giving a portion to the buyer’s broker. The listing broker and the buyer’s broker then pay the Realtors who were working with the buyer and seller.

If I am a buyer and want the assistance of a Realtor, will I have to pay the Realtor for his services? Generally, the answer to this question is no. As mentioned above, the seller, for the most part, pays the commission to the listing company who then pays your Realtor’s broker company. Your Realtor is then paid for his services by his company.

If I ask a Realtor to show me some properties and I end up not buying a home, does the Realtor get paid for the work that he did for me? Generally, the answer to this question is no. The Realtor assists you at no charge with a desire to earn your loyalty and with the hope that he will be able to help you purchase a property some day down the road when you decide the time is right.