Who Pays the Commission?

Who Pays the Commission?

Usually two agents are involved in a real estate transaction. The agent representing the seller and the agent representing the buyer. In almost every single case, the seller is responsible for paying the commission for both agents.

How much is the Commission?

The commission is generally six percent (6%) of the home’s sales price and is frequently divided equally between the seller’s agent and the buyer’s agent.

Does the Buyer Pay the Commission?

The buyer does not pay the commission. The seller assumes the cost.

As a Seller, Is There a Way to Avoid Paying the Commission?

According the National Association of Realtors, 89% of sellers used the services of a real estate agent in 2015. Only 8% of sellers try to sell the property on their own (i.e., For Sale by Owner). This means they try to sell their property without hiring a real estate agent believing they can avoid the 6% commission this way. However, it’s important to take the following information in consideration:

According to national statistics, the achieved “For Sale by Owner” (FSBO) price is 19% less than the price achieved by a real estate agent. This means that a seller can make a 13% profit (19% less the 6% Commission) when working with a real estate agent. The sellers can make more money this way than if they try to sell the property on their own.  The typical FSBO home sold for $185,000 compared to $240,000 for agent-assisted home sale in 2015.[1]

There are other benefits, in addition to the financial benefits derived from entrusting the sale of your property to a real estate agent:

  • Printed advertising (brochures, flyers, open-houses)
  • Estimated sales price and market analysis monitoring
  • Selection of potential buyers
  • Coordination of visits

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