Buying or selling a property can be a daunting task, especially if you don't have any experience in the real estate market. Real estate agents can help you navigate the process, making it much easier and less stressful. In this blog, we will discuss when real estate agents in Illinois get paid and why it's important to understand this aspect of the transaction.
Types of Real Estate Transactions in Illinois
In Illinois, real estate agents can receive payment for two types of transactions: a listing agreement and a buyer's agreement.
Listing Agreement: In a listing agreement, the seller hires a real estate agent to list and sell their property. The agent is paid a commission when the property is sold, which is typically a percentage of the sale price. The commission is usually split between the listing agent and the buyer's agent.
Buyer's Agreement: In a buyer's agreement, the buyer hires a real estate agent to represent them in the purchase of a property. The agent is paid a commission by the seller when the property is sold, and the commission is typically split between the buyer's agent and the listing agent.
Terms of the Agreement in Illinois
The terms of the agreement between the real estate agent and the client determine when the agent gets paid. In Illinois, the commission is usually paid at closing, but it can be paid at other times, depending on the terms of the agreement.
Illinois law requires that the commission agreement be in writing and signed by both the client and the agent. The agreement should outline the commission rate, which is usually a percentage of the sale price, and when the commission is due.
State Laws in Illinois
Illinois law also requires that the commission be paid to the broker, not the individual agent. The broker then pays the agent according to their agreement.
In Illinois, the commission is typically paid out of the proceeds of the sale at closing. The closing agent, usually a title company or an attorney, will disburse the commission to the broker.
In some cases, the commission may be paid at a different time, such as when a contract is signed or when a contingency is met. However, this must be agreed upon in the commission agreement.
Why Understanding When Real Estate Agents Get Paid is Important
Understanding when real estate agents get paid is important for both buyers and sellers. For sellers, it's important to understand how the commission will be paid and when, so they can plan accordingly. For buyers, it's important to know that the commission is typically paid by the seller, so they don't need to worry about additional costs.
Real estate agents are paid based on their performance, and their commission is usually contingent on the successful sale of the property. This means that they are motivated to work hard and get the best possible deal for their clients.
In conclusion, real estate agents in Illinois get paid when a property is bought or sold, and the commission is usually paid at closing. The terms of the agreement between the agent and the client determine when payment is due. If you're planning to buy or sell a property in Illinois, it's essential to work with a reputable real estate agent who understands the laws and regulations in the state and can guide you through the process. Understanding when real estate agents get paid can help you plan for the transaction and ensure a successful outcome.
