Understanding Realtor Commissions: The Basics of Real Estate Transactions

How Realtors Earn Their Keep

Realtors typically work on a commission basis, meaning they only earn when a property transaction closes. This system motivates realtors to work diligently for their clients, ensuring they find the right buyer or the perfect property. The commission is usually a percentage of the sale price, split between the buyer’s and seller’s agents as determined by the terms of the listing agreement.

Historical Context and Changes

Traditionally, both the buyer’s and seller’s agents were compensated by the seller, a practice that streamlined transactions but didn't always ensure fair representation for the buyer. This was standard until the 1990s, when shifts in industry practices and advocacy for buyer's rights led to more distinct roles for listing and buyer's agents.

Recent Developments

The National Association of Realtors (NAR) has faced legal challenges that prompt changes in how commissions are handled. Starting from August 2024, the commission structure in the US will undergo significant changes due to these legal outcomes, aiming to create more transparency and fairness in real estate transactions.

What This Means for You

Whether you are buying or selling, it's crucial to understand how your realtor will be compensated. This knowledge will help you navigate your transaction with greater confidence and ensure that your interests are adequately represented.

Why Use a Realtor?

Despite the costs, a skilled realtor brings invaluable assistance to the table. From navigating legal paperwork to leveraging extensive networks, realtors handle the complexities of real estate transactions, saving you time and potentially a lot of stress.


Interested in buying or selling a home in Kanab? Contact us at Love Realty Utah. We're here to guide you through every step of your real estate journey, ensuring a smooth and successful experience.

If you're ready to dive into the Kanab real estate market, or just need more information, don't hesitate to reach out.

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