Residential home sales increased by almost 13 percent towards the end of 2021, flooding the market with new properties and buyers.
Are you interested in making the most of the momentum and moving your family to a new home?
Working with an agent becomes a necessity in a growing market, making sure your property gets the attention it needs to sell quickly. Real estate agent commissions may sway you from working with an agent. But we’re here to explain the commission fee and why it’s worth the cost in your final sale.
Continue reading below to find out answers to your questions on estate commission rates.
What Are Real Estate Agent Commissions?
A real estate agent commission is the percentage of a property’s final sale price that goes to the agent and brokers involved in the sale. Agents and the like from Closify are usually paid from commission only, meaning the rate is important to cover their efforts in the sales process.
Simply put, a real estate agent only gets paid if the property sells.
The commission rate is anywhere from four to six percent of the total sale. The variation depends on the final negotiated percentage in the listing agreement between the agent and property owner. The rate also fluctuates based on states and different agents.
How are Estate Agent Commissions Divided?
Four to six percent of a major property may sound like a good lump sum paid to the agent. However, several parties get paid out of this one commission.
Here are the different players involved:
- The listing agent works with the seller of the property to list, market, and plan open houses
- The buyer agent works with buyers to review different properties, negotiate prices, and connect with real estate lawyers
- The listing and buyer broker are the organizations that the agents work under, such as those working under the agency Heathersellshouses.com
Upon the sale, agents and brokers typically split the estate agent fees 50/50. A four percent commission rate means that each party receives one percent of the commission. More experienced agents are often rewarded from brokers by receiving a larger percentage.
Who Is Responsible For Paying Estate Agents?
Buyers and sellers each receive benefits from working with agents. The expertise and market connections are invaluable in the sales process, making the commission rate worth the cost for both parties.
Both the buyer and seller of the property are responsible for paying real estate agent commissions. The commission rate comes out of the final sale price, meaning the seller is in charge of paying out the fee.
However, sellers bake estate agent fees into the price of the property. That means the buyer is responsible, indirectly, for covering the fee.
Work With The Real Estate Agent For You
At the end of the day, real estate agent commissions are similar percentages across states and agencies. You as the home seller should shop around to find an agent that best fits your personality and needs and offers the most for the commission rate (think marketing, open houses, strong listings, etc.).
Get to work locating the right agent, and look into our other blog posts for tips on how to manage a busy lifestyle during the home selling process!