If you’re new to selling a home, you may be curious what to expect for your realtor’s fees for their hard work during the process. You’re familiar with agents getting a commission, but who is supposed to pay for it when someone buys your home?
What kind of rate do realtors get? There are many questions on your mind and this article is here to clarify this topic and make sure you know what to expect from the get-go. Take a look at everything you need to know about realtor fees during your sale.
What are realtor fees?
Realtor fees are just as they sound; the fees paid to your realtor for their work in the process of doing business with you. These costs can sometimes be confusing and intimidating since they are not an upfront cost and more of a percentage of the end sales price.
The amount is costs to hire your realtor will not be known until you know how much the house is going to sell for. There isn’t a set percentage for realtors’ fees either; it’s going to range depending on the person and the location. You can estimate the cost at around 6% on average across the board. Realtors will ask for a fair percentage based on the sales price.
How much is a real estate commission?
Since a realtor isn’t getting paid by the hour or by the week, agents are only earning their commissions for sales that go through. Some may charge a flat fee for their services, but typically they are going to charge a percentage of the sales price of the home after it has closed.
The exact percentage will vary as mentioned likely in the ballpark of 6% of the home’s final sale price. Since they are working for a buyer for weeks and sometimes months, that amount of cash makes sense for how much time and work is going into the process.
Who should expect to pay them?
Now you may be wondering how is responsible for this chunk of change. Typically, the home seller is going to be the one responsible for paying the full commission for both services being provided. The services provided are the listing agent that they used and the buyer’s agent if the buyer used one. Then, both the seller’s agent and buyer’s agent would split the commission so no one is getting that full percentage.
The split can happen in a variety of ways though because sometimes a more experienced agent will receive a higher percentage than a newer agent. Additionally, if an agent represented both the buyer and the seller, it would be considered a dual agent and that agent would get both commissions. Many agents won’t do this situation but it does happen in some states.
What am I really paying for?
Your commission is going to cover a wide range of services that were provided during the process. Not only did your agent help you through the closing process, but they were there for you through the pricing of the home compared to comparable listings and consider the state of the current market, as well as the marketing of the home online and through social media, and they had your back when it came to the negotiations.
Your agent may have also put in their own costs, such as technology fees, license fees, marketing, office fees, and insurance fees. They spent money on transportation, ads, printing flyers, open houses, and this is all on the hopes that they will sell your house.
While you are already paying for things in the closing like title company fees, insurance, loan processing, and surveyor costs, you’ll also need to be the realtor fees. They are not included in the closing costs or mortgage. You’ll have to sign a contract when you hire an agent that states the commission and how long you’ll be represented so there is no guesswork throughout the process. This should help clarify everything you’ve been wondering about your realtor’s fees during your upcoming sale!