If a buyer representative locates a suitable property for a buyer, who pays the commission?

If a buyer representative locates a suitable property for a buyer, who pays the commission?

• A. The buyer pays the commission
• B. The seller pays the commission
• C. The lender pays the commission
• D. The government pays the commission

Answer: (B)

In real estate transactions, the typical practice is for the seller to pay the commission for both the buyer's and seller's agents. This arrangement is often outlined in the listing agreement signed by the seller when they decide to sell their property. The seller agrees to pay a commission that is then split between their agent and the buyer's agent, which incentivizes buyer representatives to seek out properties for their clients without the buyer needing to worry about direct commission costs. This system is understood as part of the costs of selling a home and is generally accepted in real estate practices. The buyer indirectly contributes to these costs through the purchase price of the home, but they do not typically pay the commission directly at closing. Understanding this payment structure helps clarify the roles of different parties in a real estate transaction, reinforcing the rationale behind the widespread practice of seller-paid commissions in the industry.

In real estate transactions, the typical practice is for the seller to pay the commission for both the buyer's and seller's agents. This arrangement is often outlined in the listing agreement signed by the seller when they decide to sell their property. The seller agrees to pay a commission that is then split between their agent and the buyer's agent, which incentivizes buyer representatives to seek out properties for their clients without the buyer needing to worry about direct commission costs.

This system is understood as part of the costs of selling a home and is generally accepted in real estate practices. The buyer indirectly contributes to these costs through the purchase price of the home, but they do not typically pay the commission directly at closing.

Understanding this payment structure helps clarify the roles of different parties in a real estate transaction, reinforcing the rationale behind the widespread practice of seller-paid commissions in the industry.