Who Pays The Real Estate Commission? Realtor/Real Estate Agent Fees

If you are looking to sell your home, then you may be wondering, who pays the real estate commission, Well ,stick around because We’re going to talk about that today, and it starts right now.

Hey everyone. Welcome back to my channel. I’m Ledeana Strand with Homes By Strand, and RE/MAX Town and Country in Port Orchard, Wa. If this is the first time visiting my channel, go ahead and hit the subscribe button below, and Click on that bell to be notified of my future videos if you want to be kept up to date on all things real estate in Kitsap County. So, who pays the real estate commission? Is it the buyer, or the seller? What about the standard commission rate? These are all great questions that sellers ask when they meet with a realtor. Here in our local area, the standard commission rate is anywhere between five and 6%, but it is negotiable, and not set in stone until there’s an agreement that’s taken place between the seller and the brokerage, and we use a contract called the listing agreement. So, let’s use the example of 5% on the listing agreement, from that 5%, the listing agent agrees to cooperate with a buyer’s agent and give them half.

So 2.5% to the buyer’s agent, 2.5% to the listing agent. It’s important to know that of the 2.5% commission rate that the listing agent gets. That’s gross commission. Out of that comes they’re split with their brokerage. Any up front costs that they incurred while listing the property, which includes advertisements, flyers, signs, putting up the signs, putting up lockboxes, etc. All that comes out of the 2.5%, then they get the remaining balance. However, Uncle Sam is hungry and they want a bite of that too. Cause remember it’s Gross Commission.

So, Essentially, as a listing agent, we’re taking on all the risks from hiring the photographer and the videographer, running ads, placing the sign on the property, printing flyers, the lockbox, you name it. We’re doing it upfront with the knowledge that when we sell your home, we’re going to get it back.

Be careful and aware of sales tactics and gimmicks when searching for your listing agent, and everyone wants your business, but some discount brokerages will offer things like 1% commission rate or a flat fee of let’s say $1,500, in these scenarios there’s a lot of things that broker just will not do, such as professional photos, videos, staging, setting appointments, negotiating with buyers, with agents, the contracts and so on.

If you want to do this and you think you could take it on, that’s fine. You just want to be upfront and know what you’re getting for the commission that you’re paying. Remember, you get what you pay for. It’s normal for some agents to discount the commission rate to try to get business. So, in the scenario of the 5%, let’s say an agent comes in and charges 4%, immediately, most sellers are going to be like, Yay, I’m saving 1%, however, where’s that 1% coming from? Chances are the 1% is going to come out of the marketing of your property. Wouldn’t you want your home to be exposed to the maximum amount of buyers so you can get the most net proceeds possible? I’m sure that you do.

Instead of trying to search for an agent that charges the least amount of commission, I would recommend focusing on what you’re getting for the commission you’re going to pay the realtor. With social media now days, you want to make sure that your agent has a very detailed, and targeted ad campaign to get your home in front of the masses. A lot of agents use social media, but less than 1% know how to do it correctly, again, you need to get your home out in front of the masses, and I can do that through very targeted social media campaigns, and that is just one of the ways that I advertise your home.

You’d be surprised when you ask a realtor, what am I getting for my commission? What they list and what they say they’re going do for you. I think that’s the better route to take. So that pretty much sums up who pays the commission and different scenarios that happen during a real estate transaction. But before you leave, and if you are ready to sell within the next 3-6 months, or you are ready now, click on the link below, to download my free Ultimate sellers guide, which will walk you through the selling process step by step. Such as what is a comparative market analysis, and how it will help sell your home fast and for the most amount of money, what is in the listing agreement, and should you stage your home, or not, picking the right realtor that is going to aggressively market your home, and negotiating, are just a few of the subjects covered in my seller guide. This guide could save you thousands of dollars. So, don’t miss out, click on the link down below in the description to download your copy.

If you still have a question, feel free to reach out to me anytime, even if you are not in the Kitsap County area, I would be happy to connect you with a great agent in your area. Thank you so much for watching my video, and I will see you on the next one. Make it a great home-buying and selling day!