Most real estate agents are paid on straight commission. And that commission is typically paid at or around closing. It’s all about having buyers and sellers to work with in real estate. A steady flow of buyers and sellers is what makes an agent successful. Most agents that are not successful in the business, don’t have the steady flow of business coming in.
There are typically 3 ways an agent can get new business.
#1: Marketing. Some agents spend hundreds to thousands of dollars each month to try to get new buyers and sellers to work with. Marketing sites like Zillow® provide buyers and sellers with helpful information and get you to their site, they then charge real estate agents to be listed on the site in hopes you contact an agent who happened to pay to be in that spot. A lot of times agents will pay to advertise and receive no business what-so-ever.
#2: Referrals. Referrals are the best kind of business for an agent because someone told someone else that the agent did a great job and recommended them. It costs the agent little to nothing. That’s why you will see a lot of agents saying that they love referrals on their emails and/or web site.
#3: Referrals. Yes, there is another type of referral most buyers and sellers aren’t aware of. A corporate referral. These are typically relocations for large corporations who have deals with large brokerages. A lot of times the top agents in an office receive these referrals. Thus, keeping them busy with a steady flow of business. It’s not uncommon for an agent or brokerage to pay a 40% referral fee for this business.
So, what if an agent could gain new business without paying for it upfront like #2 above? They would only pay something like the referral fee noted in #3 above if and when the transaction closed. The only difference would be that instead of paying some large corporation a referral fee, they would pay the buyer a rebate. The agent could stay busy with a constant flow of buyers and sellers. Buyers could get a rebate when buying or building and sellers could pay less to sell their home. A true win-win. Sometimes it’s good to think outside the box! Not all agents can or will be able to pay a rebate, so finding one that can and will is key.