Does a Real Estate Agent Get a Commission When Buying or Selling Their Own Property?

Real estate is a commission-based industry. Agents typically don’t earn a set salary. Instead, they receive a commission on every deal they broker – both as a buyer’s agent or seller’s agent. The actual percentage of the sale price earned as part of this commission may vary based on the terms negotiated by the client and their agent.

But what happens when a real estate agent involved in the deal is also the buyer or seller of the property? Does this agent receive a commission?

Real Estate Agents Typically Save on Commission When Selling Their Own Home

In general, real estate agents don’t earn a commission when selling their own house since this would involve paying yourself. However, this is still a beneficial situation. By listing your own home, you’re able to keep a larger percentage of the sale price.

Although legally who pays the commission is negotiable between the seller and buyer, if we assume a 5.4% commission and the seller has offered to pay an even split of that commission between the agents, this will allow you to pocket an additional 2.7% of the sale price by not working with another agent to sell your home. Depending on the sale price of the house, an agent can potentially save thousands of dollars by listing their own home.

Real Estate Agents Buying a Home Have the Option to Take a Commission

When a real estate agent buys a home, they have the option to receive a commission. In some situations, you may find that by waiving your commission, you can negotiate a lower purchase price. However, there may be other instances where choosing to take a commission is advantageous. For example, if you have cash flow concerns, you can apply the commission to your closing costs and reduce the amount of money you need to pay at closing.

Ultimately, you’ll need to do some number crunching to decide whether you should take or waive your commission. The important takeaway is that these options give real estate agents greater flexibility regarding how to achieve the most financially advantageous situation when they buy a home.

Can a Real Estate Agent Sell Their Own Home?

Real estate agents are allowed to sell their own home. However, agents must follow Colorado licensing law when selling their own homes. In addition, any agent that is a member of the National Association of Realtors (NAR) must also adhere to the code of ethics developed by the NAR. This code of ethics requires real estate agents who list their own property to disclose that they are the owner of the home to potential buyers. This disclosure should be included in the listing description, and it can simply state that the homeowner is also the listing agent or broker.

The ability to sell your own home as a real estate agent provides several important benefits:

• Greater expertise – Your expertise as a real estate agent can help you maximize the price you get for your home. You’ll have detailed knowledge of the local market that will help you establish the right selling price for your home. In addition, you’ll know how to most effectively stage the home and market the best features of the house in order to make it as attractive as possible to potential buyers.
• Greater control over the sale – As an agent, you’ll have control over the entire process of selling your home, giving you peace of mind that every aspect of the transaction is being handled properly. Every aspect of process can potentially impact the final sale price, so being able to manage the fine details yourself can help you maximize the amount you make on the sale.
• Save on commission – As stated earlier, real estate agents who sell their own home can save on the seller’s commission, which can potentially equate to thousands of extra dollars earned on the sale.

Colorado Real Estate School Can Set You Up for Success

If you’re interested in a career in real estate, Colorado Real Estate School can help you lay the foundation for success in your new venture. Our online real estate courses contain all the information you need to pass your real estate exam and build a thriving real estate business.

You’ll benefit from the most comprehensive online real estate course content available. In addition, our courses have been developed by local, licensed real estate professionals who have the intimate knowledge of the Colorado real estate industry necessary to ensure you’re armed with the insights you need to succeed once you get your real estate license.

Our VideoConnect Success Learning System™ contains the largest library of instructor-led video content available and is one of the primary reasons why so many prospective real estate agents choose Colorado Real Estate School. This video content creates a highly engaging, authentic classroom experience that allows you to optimize your learning from the comfort of your own home.

At Colorado Real Estate School, our commitment to your success doesn’t stop once you’ve completed our courses. Our exclusive TruSupport Pass Guarantee™ provides the additional support you need in the event that you don’t pass your real estate exam on the first try. This guarantee gives you extended access to all course materials as you prepare to retake the exam. In addition, you’ll work with one of our instructors who will analyze your test results and help you create a customized study plan that emphasizes the concepts you struggled with when you took the exam. With this approach, you’ll be able to focus on the right subjects to improve your results when you retake the exam.

Contact us today to learn more about our online real estate courses.