How much is the standard commission percentage?
Real estate agents get rewarded for their hard work with a percentage of the home’s commission. The total commission they get is based on a percentage, but the exact percentage varies between regions. Sellers can expect to pay between 4.51% and 6.41% for a home’s final sales price. Around 5% is the average across the country.
The fee is usually given to the listing agent who worked with the seller. Half of the money will be kept by the listing agent, and the other half will be given to the buyer’s agent.
If you sold your home for $350,000 and worked with a listing agent, you would have to pay about a 6% commission. Your listing agent would make $21,000 back in commissions after the sale. The buyer’s agent and seller’s agent would divide the profit between them, leaving each with $10,500.
When it comes to commission percentages, the national average is between 5% and 6%, but that is not the case for all agents. Some may charge more or less than others. It is possible to get a low 1% listing fee from some brokerages, such as Value Home Sales. You can find an agent with a commission that works for you by researching them.
What are the implications for sellers?
You’re likely wondering what this means for the seller now that you know about commission percentages. Consider the previous example. After you pay your agent, you will only get $329,000 back for selling your home for $350,000. This might be a disappointment for sellers who wanted to get the full price.
Luckily, as a seller, you have control over the listing price of the home. Your agent can help you determine your home’s listing price based on similar home values in the area. One way to increase the price of your home and receive more after commissions are paid is to add popular features that will increase overall value to the home, such as a remodeled kitchen or owner’s suite.
If renovations aren’t within your budget or time frame for selling, consider discount brokerages with lower commission rates. The typical commission rate for sellers is 6%, but they pay a 4% commission with Value Home Sales. That reduced percentage could be the difference between making a profit on your home and not.
How do the real estate agents get paid?
The seller will usually pay the real estate agents. The money is from the sale of the home. For simplicity, the commission of the home is combined. The listing agent will retain a portion of the profits while the buyer’s agent gets the rest.
It may seem odd that the seller would pay both fees, but that is not the case. The listed price of the home takes into account the buyer agent’s fee. The buyer pays the commission when they purchase the home and then passes it onto the seller.
Can agents keep the full commission?
Even though agents would love to receive their full portion of the sale, commission fees don’t work that way. In most cases, agents work through a broker. The company they represent and whose logo is on their advertising material is referred to as a broker. The broker pays for support and expenses for real estate transactions.
In return for all that they give, agents must give a certain percentage of their commission to the broker. It’s usually 1%- 2% of the final sales price. The percentage may be different depending on how long the agent has been working with the broker.
Is it possible to lower the realtors’ commission?
Real estate agents deserve compensation for their work, but there are ways to offset the commission fees. Even though home renovations will increase the listing price and give you more profit, you will still pay the same 5%-6% commission.
Depending on the situation, sellers may be able to negotiate a lower commission percentage. Local sellers using the same REALTOR to sell their current home and purchase a new one and buyers whose agent also represents the sellers in the transaction are included.
In both instances, there is only one real estate agent. The agent doesn’t need to split the fee between anyone because they are both the buyer’s and seller’s agent. It’s worth asking if you want to reduce costs with a commission rate of 3%- 4%.
Consider a low commission brokerage like Value Home Sales
If you want to save money on the sale or purchase of your home, a low commission real estate agent is the best choice. The money you will save is worth the extra effort in the long run, even if you have to put in some work yourself.
With a 1% listing fee, sellers can save thousands of dollars, and the total commission can be lowered to 4%. You will receive the same exceptional service and features as a big firm brokerage.
You’re also in luck if you’re looking to buy a home. Buyers can receive half of their agent’s commission at closing with our Buyer Rebate program. Imagine what you could do with the extra money in your pocket if you are buying or selling.
It is possible to reduce your agent commission fee without compromising on support and service. Get in touch with a local Value Home Sales agent in your area. Our low-commission model will help you get the best home at the best price.