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So what percentage of home sales do realtors get? It’s almost unavoidable, at some point or another you will probably be working with a real estate agent. They offer by far one of the most effective services to utilize when trying to buy a house. Therefore this question is pretty common, but unfortunately the answer is not completely black and white. 

What Percentage Do Realtors Get?

There is no fixed commission rate in the real estate industry. In fact it is illegal for agents to fix their prices in an area by all agreeing to charge the same commission rate. While there may be no fixed commission rate for every realtor, there are industry traditions when it comes to them. The industry tradition is to charge a 6% commission rate. Therefore most realtors you find will charge between 5% and 6% in commission fees. 

The percentage take your agent gets from selling your home is then split between your agent, and the buyer’s agent. In most cases the buyer’s agent and listing agent split the commission evenly. For example, say the selling price of a home was $250,000 and the listing agent charges a 6% commission rate. The total take in commission would then be$15,000. Which would then be split evenly to make each agent’s take $7,500. 

Negotiating an Agent’s Commission 

It is important to remember that commission rates are always negotiable. If an agent sets their commission rate at 6% you may be able to talk them down to 5% if you get creative with your negotiation. For example, you could work out a deal where their commission would vary on how quickly they sold your home. There are many arrangements that could be made when concerning the commission rate. So if you love an agent but not their commission rate, don’t give up on them too quickly. You may be able to work out a deal that would benefit both of you. At the end of the day you and your agent must agree on their commission rate before the process of selling your home even begins. 

What Commission Covers 

The belief that realtors get to keep 100% of their commission is a misconception. Many real estate agents work for brokerages. If that is the case in your situation, the initial commission check won’t even go to your agent. It will be evenly divided between your agent’s brokerage and the brokerage of the buyer’s agent. The brokerages will then take their cut of the agent’s commission checks. The split between agents and brokers can vary dramatically depending on the situation. If an agent is new, and inexperienced it is not uncommon for them to pocket less than half of their commission check. Whereas if an agent is highly experienced and has been with the brokerage for many years, they can usually expect to keep a significant amount of their commission check. 

The brokerage will use their cut to pay for things like the MLS listing fees, and advertising costs to promote the sale of your home. As well as other various expenses associated with selling a home, and of course they will also keep some as a profit. If an agent is not affiliated with a brokerage they will be forced to pay all these fees and expenses from their commission. 

Who Pays Commission 

You, as the seller, will pay the agent’s commission when your transaction is finalized. The agent’s commission will come directly out of the final sale price of your home. A good listing agent will take the commission fee into consideration when determining a sale price for your home. This way the buyer is essentially paying for the commission when they buy the home. If you would rather the buyer outright contribute to paying for the commission fees you have the option to negotiate that when setting up the final transaction on the home. 

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