In a commission-based industry like real estate, the amount of money you make can
have a major impact on your life. Some agents work in the field for a long time and
earn large paychecks, while others struggle to meet their financial goals. Whether
you’re looking into becoming a real estate agent or are already a licensed Realtor®,
knowing how much is the typical real estate commission can help you set your
expectations and reach your career goals.
The amount of money paid in real estate commission varies based on the final sales
price of the property and how it’s sold. In most markets, a standard total commission
rate of 6% is common, but it can vary slightly between different brokerages and
market conditions. The total commission is typically split between the seller’s agent
and the buyer’s agent. The agent then pays a portion of the commission to their
broker. The broker will then divide the remaining payment evenly between their
agents, usually resulting in each agent receiving 15% of the total commission
payment, or $15,000 for example.
As a home seller, it can seem counterintuitive to pay for the commission of someone
who is going to be helping to sell your home. However, when you consider that the
total cost of the home sale is typically around 20% of the sales price, it makes sense
to incentivize buyers’ agents to show your home and potentially bring in clients that
might not have found the property on their own.
In addition to a traditional 6% total commission rate, real estate agents also charge
a fee known as a transaction fee. This is the fee charged for their services such as
marketing, photography, staging and facilitating the transaction between the buyer
and seller. This fee is often included in the total sales price of a property and can be
negotiated between the agents and brokers. Also read https://www.dignityproperties.com/sell-house-probate-tennessee/
It’s important to remember that real estate agents are not employees, but
independent contractors. This means that even if they make a large commission
check, they will likely have to pay taxes on it. As a general rule, it’s a good idea to
save about 30% of each check for taxes, and to file quarterly estimated taxes as
needed.
Considering how much is the average real estate commission in New York City, it’s
understandable that some people have questions about how the commission
process works. This article provides an overview of how the commission structure
works and offers some tips on negotiating a lower real estate agent commission rate
as a home seller or home buyer.
The average commission rate for homes in NYC has been around 6% since 2021, but
it can be negotiated down to 5% or lower. For home sellers, Hauseit offers a flat-fee
NYC MLS listing service that can help you save up to 6% in real estate commission
when selling your home.
