The Goldman Team

Who Pays the Commission?

In most cases, the seller is responsible for paying commission to both the selling and buying agents involved in a real estate transaction listed on MLS.

It is common for many buyers to think that it is better to have one realtor, the selling agent, negotiate the Agreement of Purchase and Sale. Further, some buyers assume that this will result in a lower purchase price because the selling agent will reduce his or her commission since they no longer have to share it with a second, buying, agent.

However, this assumption is incorrect and dangerous. The reason being, the selling agent has a legal obligation to get the highest price for their Seller’s property. As a result, the selling agent may not be negotiating the best price for the buyer as it conflicts with their obligation to the seller. Overall, the buyer may end up paying more for the home because the listing agent is still obligated to get the most money for the Seller. This is a conflict of interest as the agent cannot negotiate the best price for the Buyer.

In reality, the selling agent is paid a much higher commission due to the fact that they do not have to pay a commission to the cooperating broker.