When selling your home, it’s important to include real estate commission in your budget because it’s a significant fee in the selling process that will impact your overall profits.
Realtors are well worth their commission as they help sellers get the right price for your home in as short of a timeframe as possible while guiding you through the entire selling process. But don’t be afraid to negotiate!
How does the commission process work?
In most cases, the seller pays both the buyer’s agent and seller’s agent commission. Generally, buyers don’t pay Realtors directly. Instead, their compensation comes in the form of a commission on the property’s final sale price. Commission for both the buyer’s and seller’s agents are taken from the proceeds of the sale.
Total real estate commission paid when selling your home typically range between 3%-7% of the final purchase price, depending on the region, market conditions and agent(s) used.
On higher priced homes where commission is naturally larger, the commission percentage may be lower because agents know they’ll already make a great profit, but this isn’t always the case. Be sure to discuss commission with your agent upfront so you know what to expect. You can also research local commission rates and negotiate with your agent. You never know what’s possible until you ask!
It’s important to remember, however, that you get what you pay for when it comes to real estate expertise. The more involved the agents are, the more commission you can expect to pay based on their expertise in marketing your property to find buyers and, ultimately, selling your home as quickly as possible and at the highest possible price. Realtors also understand how to negotiate real estate contracts that protect all parties.
Have questions about real estate commission or other closing costs? Answers are a call or email away!