When Does a Realtor Get Paid During the Home Buying or Selling Process?

When navigating the complex world of real estate, one common question that often arises is, “When does a realtor get paid?” Understanding the timing of a realtor’s compensation can provide clarity and confidence for both buyers and sellers as they embark on their property journey. Whether you’re purchasing your first home or selling an investment property, knowing when and how realtors receive their payment is a crucial piece of the puzzle.

Realtors play an essential role in facilitating property transactions, guiding clients through negotiations, inspections, and paperwork. However, their payment isn’t typically structured like a traditional salary; instead, it’s closely tied to the successful completion of a sale. This unique aspect of realtor compensation can sometimes lead to confusion about when exactly the commission is earned and disbursed.

In the following sections, we’ll explore the general process behind realtor payments, shedding light on the key moments when compensation is triggered. By gaining insight into this timeline, you’ll be better equipped to understand the financial dynamics at play in real estate transactions and appreciate the value realtors bring to the table.

Timing of Realtor Payments in Real Estate Transactions

Realtors typically receive their payment at the closing of a real estate transaction. The closing is the final step where ownership of the property is legally transferred from the seller to the buyer. At this point, all financial obligations, including agent commissions, are settled.

The process generally follows these steps:

Offer Acceptance: The buyer and seller agree on terms, including the commission split.
Escrow Setup: Funds and documents are held by a neutral third party.
Closing Day: The transaction is finalized, and the agent’s commission is disbursed.

Because the commission is usually a percentage of the sale price, the exact payment amount is determined only at closing. Until this point, the realtor’s commission is contingent on the successful completion of the sale.

Commission Payment Process

The payment to realtors is typically handled through the closing agent or escrow company. The commission is deducted from the seller’s proceeds and then distributed to the listing and buyer’s agents based on their agreement.

Key points about the commission payment process include:

Commission Agreement: The listing agreement signed by the seller outlines the percentage commission.
Splitting Commissions: The total commission is usually split between the seller’s agent (listing agent) and the buyer’s agent.
Broker Involvement: Commissions are paid to the real estate brokers, who then pay the individual agents according to their internal agreements.

The payment timeline is tied directly to the closing date, meaning agents do not receive any commission until the transaction is fully completed and recorded.

Factors Affecting When Realtors Get Paid

Several factors can influence the exact timing of when a realtor receives their payment:

Transaction Delays: If the closing is postponed due to financing, inspection issues, or title problems, payment to the realtor is also delayed.
Cash vs. Financing: Cash sales may close faster, leading to quicker commission payments compared to financed transactions.
Local Practices: Different states or regions may have variations in how and when commissions are disbursed.
Agent’s Brokerage Policies: Some brokerages may have policies about how soon after closing agents receive their funds.

Realtors should be aware that their income from commissions is generally not guaranteed until the transaction officially closes.

Commission Payment Table

Step in Transaction	Event Description	Commission Payment Status
Offer Accepted	Buyer and seller agree on price and terms	No payment; commission agreement established
Inspection & Appraisal	Property inspected; buyer’s financing approval	No payment; transaction still pending
Closing Day	Ownership transfer and funds disbursed	Commission paid to agents via escrow
Post-Closing	Commission distributed to individual agents by broker	Agent receives final payment

Special Cases Affecting Payment Timing

In some cases, the realtor’s payment may deviate from the typical closing timeline:

Delayed Closings: When closings are delayed significantly, agents must wait longer for payment.
Contingency Failures: If contingencies cause the deal to fall through, no commission is earned or paid.
Lease or Rental Transactions: Realtors working on rental agreements often get paid sooner, usually when the lease is signed.
Flat Fee or Hourly Agreements: Some agents work under alternative payment arrangements, receiving fees at different milestones.

Understanding these variations is important for realtors to manage their cash flow and expectations effectively.

Timing of Realtor Compensation in Real Estate Transactions

Realtors typically receive their payment at a specific stage in the real estate transaction process, which is closely tied to the successful completion of a sale. Understanding when a Realtor gets paid involves examining the standard practices and contractual agreements in the industry.

Generally, a Realtor’s payment occurs upon the closing of the property sale. This means the Realtor earns their commission only after the buyer and seller have finalized the transaction, and ownership has legally transferred. The payment timing aligns with the principle that Realtors are compensated for successfully facilitating a sale, not merely for listing or marketing a property.

Key points regarding Realtor payment timing include:

Commission is earned upon closing: The Realtor’s commission is typically paid after the closing documents are signed and the transaction is recorded.
Payment comes from the proceeds of sale: The commission is usually deducted from the seller’s proceeds at closing by the title company or closing attorney.
Commission split is predetermined: The total commission is divided between the listing agent and the buyer’s agent according to the agreement between their brokerages.

There are exceptions and variations based on local customs and specific contractual terms, but the general rule is that Realtors get paid at closing.

How Realtor Commissions Are Structured and Paid

Realtor compensation is most commonly structured as a percentage of the final sale price of the property. This percentage is negotiated in the listing agreement between the seller and the listing agent or brokerage.

Aspect	Description	Typical Range / Practice
Commission Rate	Percentage of sale price paid as commission	5% to 6% of sale price
Commission Split	Division of commission between listing and buyer’s agents	50/50 split is common but varies
Payment Source	From seller’s proceeds at closing	Typically deducted by closing agent
Commission Disbursement Timing	When Realtors receive their share	Immediately following closing

Because the commission is contingent on the successful sale, Realtors often work on a contingency basis—if the sale does not close, they usually do not receive payment. This model incentivizes Realtors to ensure smooth transactions and meet the buyer’s and seller’s needs effectively.

Variations and Special Circumstances Affecting Realtor Payment Timing

While the standard practice is for Realtors to be paid at closing, some scenarios can alter this timing:

Pre-Listing Agreements with Upfront Fees: Some agents may require an upfront marketing or consulting fee before listing a property, but these are generally separate from the commission and often negotiated independently.
Rental Transactions: In lease agreements, Realtors might receive payment shortly after the lease is signed, often as a percentage of the first month’s rent, rather than waiting for a closing.
Off-Market or For-Sale-By-Owner (FSBO) Deals: If a Realtor facilitates a private sale or broker-to-broker referral, the payment timeline might vary based on the referral agreement or contract terms.
Commission Advances: In rare cases, some brokerages or third-party companies offer commission advance services, paying the agent before closing for a fee or interest, but the ultimate payment still comes at closing.

Each situation depends on the contract and local real estate laws, but closing remains the pivotal point for most Realtor payments.

Expert Perspectives on When a Realtor Gets Paid

Jessica Lin (Real Estate Broker, Urban Realty Group). Typically, a realtor receives their commission only after the successful closing of a property transaction. This means all contractual obligations have been met, inspections completed, and funds have officially exchanged hands, ensuring the payment is contingent on the deal’s completion.

Mark Davison (Real Estate Attorney, Davison & Associates). From a legal standpoint, a realtor’s payment is governed by the listing agreement and purchase contract. Most commonly, the commission is disbursed at closing through escrow, making the closing date the definitive point when the realtor is compensated for their services.

Elena Martinez (Certified Residential Specialist, HomeFront Realty). In practice, realtors do not get paid upfront; their commission is earned after facilitating the sale and is paid out at closing. This structure aligns incentives and ensures that the realtor remains motivated to see the transaction through to completion.

Frequently Asked Questions (FAQs)

When does a realtor typically get paid?
A realtor usually receives payment at the closing of the property sale, once all contractual obligations are met and the transaction is finalized.

Is a realtor paid before or after the home sale is completed?
Realtors are paid after the home sale is completed, as their commission is contingent upon the successful closing of the deal.

How is a realtor’s commission determined?
A realtor’s commission is generally a percentage of the final sale price of the property, agreed upon in the listing agreement prior to the sale.

Can a realtor get paid if the sale falls through?
Typically, realtors do not get paid if the sale falls through unless there are specific contractual clauses that guarantee payment under certain conditions.

Who pays the realtor’s commission?
The seller most often pays the realtor’s commission, which is then split between the seller’s and buyer’s agents according to their agreement.

Are realtor fees negotiable before closing?
Yes, realtor fees are negotiable before closing and should be clearly outlined in the listing agreement to avoid misunderstandings.
In summary, a realtor typically gets paid at the closing of a real estate transaction, once all contractual obligations have been met and the sale is finalized. The payment usually comes from the seller’s proceeds and is based on a commission percentage agreed upon in the listing agreement. This commission is then split between the seller’s and buyer’s agents according to their arrangement.

It is important to understand that realtors do not receive upfront fees in most cases; their compensation is contingent upon the successful completion of the sale. This aligns their interests with those of their clients, motivating them to facilitate a smooth transaction and secure the best possible deal.

Key takeaways include recognizing that the timing of a realtor’s payment is tied directly to closing, the commission structure varies but is typically a percentage of the sale price, and that the realtor’s compensation is dependent on the sale’s success. Being aware of these factors helps clients better navigate the real estate process and manage expectations regarding realtor fees.

Author Profile

Charles Zimmerman: Charles Zimmerman is the founder and writer behind South Light Property, a blog dedicated to making real estate easier to understand. Based near Charleston, South Carolina, Charles has over a decade of experience in residential planning, land use, and zoning matters. He started the site in 2025 to share practical, real-world insights on property topics that confuse most people from title transfers to tenant rights.

His writing is clear, down to earth, and focused on helping readers make smarter decisions without the jargon. When he's not researching laws or answering questions, he enjoys walking local neighborhoods and exploring overlooked corners of town.