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How Much Does A Realtor Take When Selling Your House
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Do Buyers Pay Realtor Fees? Here’s Who Pays Real Estate Commission
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Average Real Estate Agent Commissions By State (2024 Survey)
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How Much Does It Cost To Sell A House?
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In this do-it-yourself digital age, home sellers and buyers may be wondering if they need Realtors, or, more specifically, if they should pay realtors. How important are these agents to a successful real estate transaction?
A good agent is really helpful. It makes sense to work with one, especially if you’re buying a home: agents have access to information you don’t, and it takes time and experience to research properties, find the one that’s best for you, and make an offer. make strong. But sellers also see many advantages, especially when it comes to determining the best price. Your home still needs to be staged, marketed and shown.
Here we look at how estate agent fees work. First, an important note: There is a legal battle going on right now over real estate commissions and how agents are paid. Until that is resolved (more on the law below), we’re sharing how commission structures currently work so that both homebuyers and sellers know what to expect.
How Much Does It Cost To Sell A House?
Only a very small number of realtors work for a salary — the commission model is much more common. For many years, the flat rate was 6 percent, splitting down the middle between the buyer’s agent and the seller’s agent. But that is starting to change with the advent of discount brokers and the rise of online public listings.
Real estate commissions are currently negotiable and typically run between 5-6 percent of the home’s sales price. The exact terms of an agent’s commission vary from sale to sale and may depend on the region and firm they work for.
Let’s look at an example. According to Redfin data, the median home sale price in Cincinnati was $259,500 in December 2023. A 5 percent real estate commission on that price is $12,975. But in San Francisco, the median price was much higher at $1.17 million. , 5 percent commission is $58,500.
Assuming a 5 percent gross commission based on the sale price of your home, here’s what you can expect to pay:
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Sellers sign a listing agreement with the realtor in which they agree to pay a commission fee after the deal closes. If it’s an “exclusive right to sell” deal, they’ll pay the fee even if they find a buyer on their own.
The home seller usually pays commissions to both Realtors in the transaction: Buying and selling agents are paid with the proceeds from the sale of the home. These two agents usually split the full commission – so for a 6 percent commission, the selling agent takes 3 percent and the buying agent takes the remaining 3 percent.
This changes in a dual agency situation, where one agent represents both the buyer and the seller in the transaction. The laws in this regard vary by state; some states do not allow dual agency. In this type of situation, pay special attention to the home appraisal to get a fair price. Although agents owe a fiduciary duty to their clients, the lines can be blurred with a dual agency.
As Samantha Fish, an agent at Wesely & Associates in Grass Valley, California, says, agents must act in the best interests of their clients. “It’s in our ethos; it’s in our contract,” he says. “If someone comes to my open house and they like it, but they don’t have an agent, I can say, ‘Let me get you an agent from my office,’ so they feel 100 represented. one of them. . percent too.” However, buyers who work directly with the listing agent may have more negotiating room because the selling agent may agree to a lower sales price if they agree to lower their fee.
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If you’re working with a buyer’s agent, “you should sign a buyer’s agency agreement,” says Tim Noland, broker/owner of Great Mountain Properties in Murphy, North Carolina. “A real buyer’s agent works for the buyer. They protect the buyer’s investment better than a listing agent working for the seller.”
Real estate agents can also reduce the commission. For example, brokerage RE/MAX has a split commission system where its agents receive 95 percent of the total sales commission and 5 percent is returned to the company.
“The broker should set the policy and monitor, track and supervise all of the agent’s activities,” says Patrick Duffy, broker/owner of Duffy Realty in Miami. “If the agent does something fraudulent or unprofessional, the broker will be sued.”
You may be wondering what services this fee will buy for me? One of the biggest ways for buyers to work with a Realtor is to access the Multiple Listing Service (MLS), a database that Realtors use to view and list properties for sale.
Do Real Estate Agents Provide Value?
The fee covers the time the agent spends answering questions and helping you
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