How does realtors get paid when you're trying to assign a deal?

Real Estate sales commissions are paid by the person or business contracting the agent to list the property for sale That is to say, the Seller pays the commission, which is spelled out in a "listing agreement", and is generally a percentage of the final selling price.

You, as a buyer, do not pay a commission.

Again, there's NO FEE generally associated with working with an agent to BUY a home. So when you assign your rights as a BUYER, the person to whom you assign pays you for your rights (because you found an AMAZING deal, took your cut, and gave them a GREAT deal), and the SELLER is still responsible for paying commissions.

[SIDEBAR:: Some might argue that Buyers ultimately pay commissions INDIRECTLY because Sellers raise the price of their property to include the cost of commissions. Remember, though, that we, as investors, are often/always dealing with motivated sellers who are at the point where they will be very flexible with price despite the fact that commissions may/will cut into their bottom line.]

So once you select an agent to purchase a property, recognize the fact that they're basically an unpaid consultant for you, until you actually buy real estate. Then they'll be paid, by the seller, for the effort they will expend on your behalf.

If I missed/misrepresented anything, please chime in, fellow DGer's.

Hope this helped.

Best of luck.

Yes, That helped a great deal! If that"s the case, I really don't see why everyone starting out wouldn't use this method!It would cut down on the marketing costs a bit.

Thanks again

What if you have a realtor bringing deals/properties to you. How would they get paid then? Do you have to write their commission into the purchase agreement or the assignment contract? I believe this is whats holding me up from locking properties up with my realtor and assigning them to another Investor.

Hello jmblydenburgh.. Read the reply that was given to me ( the last paragragh) I think you will find the answer you seek..

Good luck

Your response assumes that the Buyer doesn't already have a realtor. If your Buyer has their own realtor, wouldn't the Seller would pay the commission to the Buyer"s Agent, not my Agent? Is my only option in this scenario to pay my Agent out of my Assignment fee?...or is there some other option?

Suzie

The assignement fee has nothing to do with how much the realtor makes or how they get paid. The standard realtor commission is generally 7% of the sale price, however, some realtors commissions are lower based upon their business model, such as Help U Sell which works on a 2% commission, atleast they did at one time.

The assignment fee is whatever amount the investor and you agree to and all the investor does is simply add it to the funds they place in escrow along with instructions on how to pay you.

Some realtors could argue that your not licensed and so therefor are not allowed to make money, however, many won't say a word, since it does not impact their fee's.

Jimmy, I understand all that part.I just was a little cloudy on how a realtor that I use recieved compensation. I understand it it now. I thank you all for answering my qustion. The DG family is awesome!!!