Did you know that one of the main reasons people sell their homes is because they need a larger place? Whatever your reasoning may be to sell your house, there are many things you should understand before. For one, commission rates are a concept that many people struggle with when they begin the selling process.
Read on to learn about 10 facts you need to know about real estate commission rates.
1. Average Real Estate Commission Rates
Real Estate commission rates are usually 5-6% of the sale price of the home. The agent will receive about 3% in commission. These are the average commission rates for the industry.
2. The Payer
Homebuyers don’t typically pay the real estate agent commission, they pay the closing costs. However, the seller pays a commission to the agent and the buyer’s agent after the house closes.
3. No Commission Rate Laws
When it comes to real estate commission rates, there are no laws or regulations. You can’t expect to avoid commission rates, but you can try to negotiate them.
Depending on the transaction type and the services required, you can negotiate rates with agents. Agents who represent the buyer and the seller tend to lower their commission fees.
4. Lower Commissions
In general, you should stick to the average commission rates. It is important to keep in mind that a lower commission is not always the best choice. This means the budget is smaller and the agent won’t be able to market your home adequately.
5. Services Covered
A realtor commission covers many services during a home sale. It includes setting a price for the home, marketing the home through different channels, presenting the home to possible buyers, considering transaction details, staying during inspections, and closing the sale.
6. Divided Commission
A no commission home sale won’t divide anything between the agents. A regular commission sale will split the commission evenly between the agents involved. After the initial split, the commission gets divided between the agent and broker.
7. Commission For Sellers
It is typical for the home seller to pay the commission for both agents. However, they are not required to do this.
Instead of paying the commission fees, sellers can account for the fee by raising the listing price. Sellers can find local investors who buy homes and don’t require fees and commissions.
8. Not Buying a Home
Not buying a home means you don’t have to pay for commission. Real estate agents are paid at the end of the process, so if the process does not end in a new home, they won’t get paid for their time.
9. Signing a Contract
Before signing any contract to work with an agent, make sure you read it and ask questions about things you don’t understand. If you end up not liking your agent, it could be difficult to leave them if you have a contract.
10. Dual Agency
Dual agency refers to an agent who represents the seller and buyer. This is illegal in many states. In the states where it is legal, full disclosure to both parties is necessary.
Real Estate Commission Rates Facts Explained
Understanding real estate commission rates will keep you from paying too much during the process of selling your home. With these 10 facts, you can start selling the right way. Use this guide to help you through the journey of selling your home.
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