How does real estate compensation work?

Start with the work and the written terms

When you talk with us, ask for the scope of work and the full cost together. Preparation, pricing, marketing, offer review and closing coordination should be understandable before you make a commitment. A general website description is not a substitute for the services and terms in your agreement.

Separate compensation from other selling costs

Your proceeds estimate should show compensation separately from loan payoff, taxes, title or closing charges, repairs, concessions and any additional agreed fees. Ask whether a quoted figure includes every brokerage-related charge, and which items are estimates from other providers.

Ask how buyer-agent compensation would be handled

A buyer can request that a seller contribute toward the buyer agent's compensation. That is something to discuss and negotiate, not an automatic amount to assume. Review the effect on your proceeds alongside the price, contingencies and other offer terms.

Buyers should understand their own agreement too

Your buyer agreement explains compensation and your responsibilities. Ask how a seller contribution would be applied and what you could owe if it does not cover the agreed amount. Understand this before making an offer, rather than discovering a gap near closing.

Five questions to bring to the conversation

• What services are included, and what could cost extra?
• Is compensation a percentage, a flat amount or another agreed structure?
• When could payment be due, including if a transaction does not close?
• How would any proposed buyer-agent compensation affect the agreement and my estimated costs?
• What does the agreement say about its length, cancellation and any continuing obligations?