Commissions

Real estate agents are typically paid a commission, or a percentage of the sale price. Although there may be scenarios where real estate agents are paid a fixed fee, particularly for high-priced homes, commissions are the industry norm. The average commission is between five and six percent of the sale price, and the commission is split between the buyer’s agent and the seller’s agent.

A 50/50 split between buyer and seller agents is most common, but it’s not a legal requirement in most states, and there are many situations and reasons why real estate agents may agree to an alternative commission split.

The details of the commission should be clearly stated in the listing agreement you sign when you hire a real estate agent. Be sure you thoroughly read the listing agreement before agreeing to the terms and don’t hesitate to talk with the real estate company about the commission if you have questions or issues.

Does a Buyer’s Market or Seller’s Market Influence Commission Rates? What Other Factors Matter?

It can, but not always, and not necessarily for every real estate agent. During a buyer’s market, there may be increased competition for seller listings, and some real estate agents may be willing to come down on their commission to attract clients. In a seller’s market, real estate agents may have less trouble finding clients, in which case they don’t need to compromise their commission rate to secure clients.

Other Factors That May Influence Real Estate Agent Commissions

Property Types

Luxury homes or unique properties often have different commission structures. A six percent commission on a home that sells for $400,000 would be $24,000, while a six percent commission on a home that sells for $4 million would be $240,000.

People selling luxury homes understandably don’t want to pay those types of fees to real estate agents when the actual effort involved with selling the luxury home may not be all that different from selling an average home. As such, the commission on luxury properties is typically a much lower percentage or some kind of flat rate.

Agent Experience

More experienced agents may be able to charge higher commissions, while newer agents with little experience or past home sale results may need to charge lower-than-average commissions to attract clients.

Local Norms

Commission structures and averages can vary across the United States. If you’re selling your home, it may be worth your time to do a little research on what the typical commission is in your area before you sign a listing agreement.

Real Estate Agency Policies

Many real estate agencies have set commission rates and scales, meaning there’s little or no wiggle room for negotiation.

Home Selling Services

One of the biggest variables is the types of services being offered. If all a seller’s agent is doing is putting a house on the MLS, the commission they charge could be far lower than an agent who offers comprehensive home seller services.

Agents who provide staging, photography, advanced home marketing services, open houses and more may charge higher commissions. However, the higher commission may be worth it if they get you a significantly higher sale price or your home sells much more quickly than it would with a completely hands-off real estate agent.

State Laws

Some states do have laws pertaining to real estate agent commissions. As a home seller, these typically won’t affect you, other than potentially limiting your ability to negotiate commissions. It’s typically the real estate agent’s responsibility to adhere to these laws.

Our Real Estate Agents Earn Every Cent of Their Commission

There are a lot of home sellers who are understandably wary of real estate agents – and they should be if their agent wants to take a significant percentage of the sale price for doing nothing more than putting their home on the local MLS. Before you hire a real estate agent or company, be sure you understand what the commission structure is and what services you’re getting for the commission you’ll have to pay.

At 72SOLD, we go above and beyond to earn our commission. In addition to handling everything from listing to open houses, we also save you from the more intrusive and annoying aspects of the home-selling process.

We won’t put up garish for sale signs in your yard, hold weekend after weekend of open houses or require you to open your home up to strangers for lots of walk-throughs. Our proven system is designed to minimize intrusiveness while maximizing sale price and speed.