When you sell a house, the real estate agent that sells it for you is paid a
commission based on their services. This is how real estate agents make their
money and it is important to understand how this works. However, many people
don’t realize that the real estate agent commission is not set in stone and it can be
negotiated with a realtor. It’s best to negotiate the fee with a top-tier agent that has
a proven track record of success. Paying a premium to work with a great agent could
save you thousands of dollars in the long run.
The real estate commission is a percentage of the property’s selling price. This is
typically split between the buyer’s agent and the seller’s agent. This is typically
around 6% of the sale price. However, the percentage can be negotiated and it is
not uncommon for real estate agents to work with one another on a commission sharing
arrangement to ensure that their clients are getting the best service at the
most reasonable rate possible.
While the majority of real estate agents work on a commission basis, there are some
that earn a salary. This is especially true for new agents or those that are working in
highly competitive markets like the ones in New York City. Those agents may work
at a lower commission rate than their counterparts in less competitive markets to
compensate for the extra amount of work and higher level of competition.
Real estate agents are able to negotiate their commission rates with sellers and can
even decide not to take a listing at all if the commission rate is too high for them to
justify taking on that client. However, in reality, most agents do not negotiate their
commissions. Rather, they will go along with the offered commission rate because it
is not in their interest to alienate a potential customer or to get less than they
deserve for their services. Also read https://www.mikeotranto.com/
Depending on the local market conditions, real estate agents can also whittle down
their commissions by referring out-of-state buyers to local real estate agents. This is
done by adding in a referral fee, which is generally a small percentage of the
buyer’s agent’s commission.
The actual number of commission checks that a real estate agent receives will vary
based on the overall market and the number of transactions they close. These
payments are made through escrow and are sent to the agent’s broker, who then
disburses the appropriate portion of the commission to the agent.
Although some agents get a base salary from their broker, the vast majority of real
estate agents are paid solely on commission. This means that when the market is
strong, they can bring in more business and may be able to negotiate a higher
commission rate with their clients. It is important for home sellers to understand how
much their agent’s are making so that they can be informed when negotiating with
their agents.
