What is a Realtor’s commission?
A realtor’s commission is the fee agreed upon as payment for assisting home-buyers or sellers during a real estate transaction. The commission is decided upon by services to be rendered and depending upon the amount of work and market conditions. If you choose to employ both a listing and selling broker this commission is roughly split between the two parties.
If you choose to buy or sell a home and employ a real estate agent, an important factor to consider is how much you will have to pay out of pocket for their commission fees. It is essential people understand not only how much each agent charges, but also how these extra fees are paid once the transaction is complete.
How much will an agent charge me?
Commissions paid to real estate agents are not set in stone. The percentage an agent agrees upon depends on a variety of factors, including the scope of work to be done and health of the local real estate market. While many agree that 6% seems to be the average, it is important to note that the percentage is a percentage of the sale price of the home. You won’t know the exact amount to be paid until the property has officially been sold.
The real estate commission is negotiated as part of the contract between the agent and the buyer or seller before the deal is completed, so the amount owed as payment is not as veiled as exactly HOW the agent’s commission is paid.
If we assume both the home-buyer and seller have an agent, it can be argued that either the seller pays (because the commission is coming out of the home’s equity) or that the buyer pays (because they are paying the cost of the house). In most cases because the fee comes from the proceeds of the sale, the commission is often split evenly between the two agents.
Regardless, when calculating the real estate commission it is important to note that this fee comes out of the cost of the home and must be calculated before tallying up the final amount pocketed for the seller or total amount paid for the buyer.
Concerns with real estate commission fees
A lot of people are in agreement that the biggest issue about real estate fees is that they are too high and that the services rendered aren’t worth 6% of the sale price. This problem is especially the case when an expensive home gets listed and is sold within the month.
If the property is worth $500,000 and the real estate agent finds a buyer relatively quickly, his or her fees would still add up to around $30,000 or 6%. For only listing the home, discussing pricing with the seller, and answering his or her questions that could be a steep price.
However, in many cases a home can also take weeks, months, and occasionally years to sell. This can add to many hours spent marketing the property, which includes:
- Holding open houses
- Vetting phone calls
- Keeping on top of other sales in the neighborhood
- Negotiating pricing with potential buyers
Because of the uncertainty of the market, sellers do not risk paying a real estate agent by the hour, which can be expensive either way you look at it. Regardless, the decision to hire a real estate agent can be an expensive one and should be made after reviewing all of the numbers. For homeowners looking to sell their property quickly and desiring cash in hand we recommend contacting our representatives.
Save Money Avoid Extra Fees
At Buy My House Now we have experience in the Arizona market. We have been buying and selling homes for years and we pride ourselves on offering a professional service to those who find themselves in a tight spot. We buy homes fast. When working with our staff there is no need to hire a broker or real estate agent. We purchase properties with cash, which allows for an extremely fast transaction.
Get in contact with our representatives today and we can make you a cash offer within 24 hours of seeing the property! We also budget for repairs and pay the closing costs so you save thousands! If you have a home to sell and need cash fast, Buy My House Now can help!