Working with a Realtor or real estate agent can make the home buying or selling process much easier. But one thing that you need to know is that they do not work for free. Real estate agents are paid through commissions, which may depend on various factors such as whether a seller has negotiated the commission, the sale price of the home, and if the home sale closes at all. Here is what one needs to know about how much do real estate agents make per sale and who is paying all this money.
Real estate agents can typically make 5% to 6% of a home’s sale price, and that amount is split evenly between the listing agent and buyer’s agent, which means that the average real estate agent commission is 2.5% to 3%. A dual agency where you embody both the buyer and seller is illegal in various states but if it is legal where you work, then you can expect to earn the full 5% to 6% commission of a home’s sale price if you represent both parties.
Real estate commission checks customarily come out of the seller’s proceeds on the house sale. So if you are the buyer, then you probably won’t have to pay anything in real estate commission. But you will probably be culpable for your closing costs, which may cover expenses such as your home appraisal and title. The listing agent will split this commission with the buyer’s agent, based on their negotiations. In some cases, if you have signed a buyer’s agreement with a real estate agent, then you may be on the hook for some additional fees too.
Depending on your particular situation and the real estate agent you work with, you may be able to confer the commission percentage. A listing agent might accept a lower rate if you have bought or sold a house with them before. They may also do so in a highly competitive market with many real estate agents ambitious for your business. If the agent knows that your property will be difficult to sell because the market is slow or it simply is not what most buyers are looking for, you may not have much luck negotiating. On the flip side, if the agent believes they won’t have to work too hard because your property is updated, move-in ready, and likely to sell quickly, they may agree to a lower commission.