Question

Douglas is the buyer's agent for a transaction in which May (from a different brokerage) listed her seller client George's property. From whom will Douglas receive his compensation?

a) From George
b) From his own broker
c) From May's broker
d) It depends

Answer 1

Douglas, the buyer's agent, will likely receive his compensation from May's broker (c), who represents the seller, as per a cooperative compensation agreement commonly arranged in the real estate industry.

Step-by-step explanation:

The compensation for a buyer's agent, like Douglas, typically comes from the listing broker who represents the seller. In this scenario, that means Douglas would likely receive his compensation from May's broker, assuming that they have agreed to a cooperative compensation plan as is customary in the industry. This agreement is usually set out in the Multiple Listing Service (MLS) where May's broker specifies the compensation offered to the buyer's broker. It's important to note that ultimately, the seller, George, is responsible for paying the commission, which is then split between the listing and buying agents according to their agreement.

In a real estate transaction, the buyer's agent typically receives a commission from their own brokerage firm. This is usually a percentage of the sale price, as agreed upon in the agent's contract with their broker.