The quick answer is that if you are buying a home that is listed for sale with a Realtor, the seller has already agreed to pay a commission to the buyer’s agent. If you don’t have your own agent, that Realtor will usually try to represent you AND the seller to make a double commission. This is known as “dual agency.”

Since a real estate agent’s commission is paid by the seller from the proceeds of the home sale, many buyers do not “feel” like they are paying one until they read their closing statement at the end of escrow. It is then that most realize THEIR REALTOR received a substantial commission, even though he or she may not have played a critical role in finding the buyer the home.

Of course, many real estate agents deserve their full commission by working diligently to find a client the right home to purchase. Numerous complicated issues can arise during escrow and it is important that a buyer be able to rely upon the advice and professionalism of an experienced real estate agent. For buyers who choose to search on their own, 1% Broker can be an excellent alternative.