If you’re thinking about buying or selling your home, read Funmurphys’ post on How Real Estate Commissions Work. The article is written from the perspective of a guy who just sold his home and is utterly amazed at the red tape and craziness of real estate commissions - and what “buyer representation” actually is and who is paying for it.

Here’s the executive summary: The home seller pays a percentage commission to the selling (listing) agent, which the agent splits in half with her office. If there is a buyer’s agent, that agent also receives a percentage commission, deducted from the selling agent’s commission. The buying agent also splits the commission in half with his office. A lot of implications flow from this seemingly simple arrangement. Take a deep breath . . .

Carl Drews then weaves readers through a maze of “weirdness” that any would-be buyer or seller should understand before working with a real estate agent.

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