Real Estate Sales Commissions
Real Estate Sales Commissions
Real estate agents are paid on a commission basis at the successful conclusion of a real estate transaction. Commissions are a negotiated percentage of the sales price of a home paid to the agents of the buyer and seller. Some brokers offer discounted commissions, some as low as 4%. Some charge as high as 10%. The norm in our geographic area is 6% to 7%. But know this: you get what you pay for.
Real estate commissions are divided between the listing associate and the selling associate. Those commissions are further divided between the associate and their brokerage.
The fact of the matter is that when you are charged a lesser commission, very little promotion is done and full service is not always provided.
Broker expenses and services
Brokers incur general expenses running their offices and providing a comfortable place for clients and agents to meet and to conduct business. There is the usual office overhead to maintain the premises: telephone, computer expenses, utilities, insurance, taxes etc.
Multiple Listing Service (MLS is system that provides the members belonging to it detailed information about properties offered for sale) charges money to advertise. It cost the broker to belong to this service as well as using it. MLS provides full exposure for your house immediately making it available to thousands of real agents, brokers and those motivated serious buyers under the wings of these Realtors.
It's essential to advertise to gain immediate and greatest exposure. Newspaper advertising, fliers, co-op advertising, advertising by fax, Internet, magazine, and networking expenses all cost money. The best home will not sell if no one knows about it.
Sales agent expenses
Agents do not incur the high overhead expenses that a broker does. However, beyond daily living expenses, the agent must take accredited real estate courses yearly to maintain his licensed right to sell. There are license fees and 4-door new auto maintenance costs.
Who pays the commission?
Sellers Agent: Usually the seller pays the sales commission. Through a listing agreement, the seller agrees to paying a specified commission. The broker becomes the owner's representative.
Buyers Agent or Exclusive Buyers Agent: A real estate buyers agent represents the consumer who is looking to purchasing a property. The buyers agent works exclusively for the client and has the clients best interest in mind throughout the process. A buyers agent is obligated to get the lowest price possible for their client, the buyer. The buyers agent should:
- show you all the homes on the market that meet your needs.
- guarantee that information between you and the agent be kept confidential.
- keep you fully informed pointing out all the negative aspects as well as the positive aspects of each property.
- provide information on comparable sales and help you formulate an offering price as well as help with your negotiating strategy.
- have home inspectors, insurance agents, lenders and other professionals they can recommend.
According to the National Association of Realtors, when a buyers agent is used, prospective buyers found homes one week faster and examined 3 more properties than those of buyers not using a buyers agent.
Use the form below to send Lori your MLS listing number or ask any questions. She will reply as soon as possible, please double check your email before submitting. An email will be sent to you confirming you submitted the form correctly.
