Interested in Your Own Personally Branded Magazine? Click Here!

Want to customize this content for your business?

Learn More

Categories

  • Home
  • Decor
  • Real Estate
  • Life & Culture
  • Food & Recipes
  • Holiday & Entertaining

  • Printables
  • Videos


General

  • About the Magazine
  • Advertise
  • Copyright
  • Privacy Policy
  • Cookie Policy
  • Careers


Editorial

  • Editorial Calendar
  • Issue Archive
  • Contact Us
  • Pitch an Idea

American Lifestyle Magazine Logo
  • Home
  • Decor
  • Real Estate
  • Life & Culture
  • Food & Recipes
  • Holiday & Entertaining
  • Search
  • Follow
  • 0 Heart
  • |
  • Food & Recipes Categories
    • All Recipes (761)
    • Appetizers (138)
    • Breakfast (62)
    • Cooking Tips (42)
    • Desserts (219)
    • Dinner (229)
    • Drinks (59)
    • Gluten Free (9)
    • Healthy (65)
    • Lunch (6)
    • Quick & Easy (60)
    • Vegan (32)
    • Vegetarian (48)
Desserts | Dec 22, 2022

Dark Chocolate Peppermint Crinkle Cookies

  • Holiday & Entertaining Categories
    • Celebrate (2)
    • Christmas (81)
    • Easter (14)
    • Entertaining (40)
    • Fall (9)
    • Father’s Day (6)
    • Halloween (29)
    • Hanukkah (17)
    • July 4th (34)
    • Mother’s Day (8)
    • New Year’s (22)
    • St. Patrick's Day (11)
    • Thanksgiving (36)
    • Valentine’s Day (5)
    • Winter (11)
Family & Pets | Dec 14, 2022

Customize Your New Year’s Eve Celebration

  • Decor Categories
    • Crafts & DIY Projects (273)
    • Curb Appeal (5)
    • Decorate (72)
    • Interior Design (85)
Interior Design | Feb 1, 2023

Houston, We Have a Rebuild

Decorate | Jan 19, 2023

Elegant Decor for Any Budget

Interior Design | Jan 12, 2023

Finding Art for Your Home

  • Real Estate Categories
    • Buying & Selling (203)
    • Home Trends (23)
    • Staging (20)
    • Your First House (34)
Decor | Nov 14, 2022

Design Trends to Follow in 2023

Real Estate | Sep 23, 2022

How to Shop for a Home Loan

Real Estate | Sep 21, 2022

Tips for Preventing Homeowner Identity Fraud

  • Life & Culture Categories
    • Editorial (310)
    • Family & Pets (202)
    • Finances (32)
    • Health (159)
    • Travel (249)
Travel | Jan 18, 2023

Winter Vacation Destinations

Finances | Dec 23, 2022

A Look Back at Inflation in 2022

Family & Pets | Dec 14, 2022

Customize Your New Year’s Eve Celebration

  • Home Categories
    • Cleaning (43)
    • Organizing (48)
    • Home Improvement (124)
    • Outdoors & Gardening (87)
Home Improvement | Jan 18, 2023

4-Week Home-Improvement Challenge

Home Improvement | Jan 6, 2023

Value-Adding Winter Home Improvements

Decor | Nov 14, 2022

Design Trends to Follow in 2023

Follow us on social media today!

Facebook Twitter LinkedIn

The Ins and Outs of Real Estate Commission

Buying & Selling | By Nathan Smith | 0 Likes
SHARE
Facebook Twitter LinkedIn More

A real estate agent is a vital part of your home-selling process. From listing your home up until closing, an agent is there at every step along the way to help you be successful in selling your home. And in return, the agent will receive a commission on the sale.

If you are getting ready to sell a home and are unsure of how real estate commission works, here are some answers to the questions you may have.

What is real estate commission?

Simply put, this is how your real estate agent gets paid. Commission for both the listing agent along with the homebuyer’s agent is typically based on percentage of the home’s final selling price. The commission covers many services agents provide during the selling of a home, all of which they will front the money for. This includes but is not limited to:

  • Listing your home
  • Taking photos of your home
  • Staging your home
  • Scheduling open houses
  • Making price recommendations
  • Discussing scenarios after receiving an offer
  • Handling negotiations
  • Coordinating and attending your closing

How much is the real estate commission?

Real estate commission averages between 5 and 6 percent of the home’s final sale price. For example, a 6 percent commission on a $250,000 home sale would be $15,000. The agent and home seller agree on the percentage amount when they sign a contract to work together, known as the listing agreement. It is important to remember that commission rates can vary from market to market.

This percentage is split between the seller’s agent and buyer’s agent. That is then usually split between your agent and their licensed broker, with up to 50 percent going to the broker. So, if the commission rate is 5 percent, in the end, an agent could receive 1.25 percent of the final sale price.

Who pays the commission?

Typically, this falls on the seller (in return, the homebuyer typically covers closing costs) and comes from the proceeds of the home’s sale. However, this can vary from deal to deal. A motivated buyer may offer to cover some of the commission to make the offer on the home more appealing. Also, some sellers list their home at a higher price to help offset the commission cost.

Can you negotiate commission?

Yes, real estate commission rates are negotiable. There are no laws that set commission rates. You may find an agent who is willing to lower the commission fee to obtain the listing if your home is in a hot housing market or is set to sell at a higher price. And, worst case scenario, the agent will be unable or unwilling to accept a lower commission.

Some agents offer to work for a flat rate. This can be an attractive option as it will lower your costs. However, it comes with limited representation. If you think this is the route for you, make sure you know what the fee covers.

What happens if your home does not sell?

If your agent is unable to find a buyer, you may not have to pay commission. It is important to remember this all depends on what you agreed upon with your agent. Your listing agreement will most likely have a specified period, typically 90 to 120 days, that the agent must sell your home within. Even if they do all the work and cannot sell the home, they will not receive commission.

However, there are some situations where they will get the commission, such as if an agent finds a buyer before the end of the contract but closing doesn’t happen until after the listing agreement’s specified period. Additionally, there are situations where you may owe some fees, such as if you decide to pull the home off the market before the date listed in your listing agreement. In that scenario, you may owe for some of the expenses experienced by the agent. Always read the details of your listing agreement to know if and how much you owe your agent.

 

Your agent puts in a lot of time and effort to help you sell your home, and their reward is their commission. By better understanding what real estate commission entails, you may better appreciate the work they do.

2752 Views

This article is tagged in:

Home BuyingHome SellingHomebuyingReal Estate AgentReal Estate Questions

Related Posts

Real Estate | Sep 23, 2022

How to Shop for a Home Loan

Real Estate | Sep 21, 2022

Tips for Preventing Homeowner Identity Fraud

Real Estate | Sep 19, 2022

Are Open Houses Worth It?

Real Estate | Sep 17, 2022

The Perks of Buying a Waterfront Property in Fall

benefits-of-fall-home-buying
Real Estate | Aug 17, 2022

The Facts about Fall Homebuying

Popular Posts

can-planters-card
Decor | Mar 25, 2020

Make Your Own Can Planters

Home | Jul 8, 2021

Tips for Redesigning Your Patio Space

Life & Culture | Feb 17, 2020

Trash vs. Recycle: Do You Know When to Trash it?

spring-cleaning-countdown
Home | Mar 23, 2021

Spring-Cleaning Countdown

Real Estate | Dec 14, 2017

House Selling Checklist


You may also like:

can-planters-card
Crafts & DIY Projects | Mar 25, 2020

Make Your Own Can Planters

Outdoors & Gardening | Jul 8, 2021

Tips for Redesigning Your Patio Space

Health | Feb 17, 2020

Trash vs. Recycle: Do You Know When to Trash it?

spring-cleaning-countdown
Cleaning | Mar 23, 2021

Spring-Cleaning Countdown

Buying & Selling | Dec 14, 2017

House Selling Checklist

home office with white furniture
Health | Mar 30, 2020

Everyone Is Working From Home—Here’s How to Do It Effectively

decorating-basics
Interior Design | Jun 9, 2020

These Tips Are Your North Star For Home Decorating

Share on Social Media

Our mission is to deliver entertainment that inspires and motivates our readers, encouraging them to follow their passions as they explore new horizons.

© 2023 American Lifestyle Magazine

General
  • About the Magazine
  • Advertise
  • Copyright
  • Privacy Policy
  • Cookie Policy
  • Careers
Editorial
  • Editorial Calendar
  • Issue Archive
  • Contact Us
  • Pitch an Idea
Categories
  • Home
  • Decor
  • Real Estate
  • Life & Culture
  • Food & Recipes
  • Holiday & Entertaining
Follow Us
Facebook Pinterest Instagram Youtube

Customize this content for your business!

Learn More

,