Realtor Commission: Who Pays, and How Much? – Elvin Villalobos

Professional realtors get paid a “commission” when they sell your home, but what exactly does this mean, and how much is it? Do you have negotiating power when it comes to the listing fee?

Realtor Elvin Villalobos has all the information you need, from where the money comes from, to who it goes to, and how much it costs.

How much is a Typical Real Estate Commission?

Unlike in traditional careers, realtors are paid only when the lender closes and seals the deal on the property being sold. While some brokerage firms use flat rates to determine their commission, most properties are sold through realtors who charge a set percentage per listing. Typically, this is 4.5% – 6% for residential properties, and up to 20% for commercial properties. In this article, we will just be focusing on residential properties.

Who Takes Home the Commission?

To bring these percentages into perspective, Elvin Villalobos explains that if you are selling your home for $100,000 a 6% commission would be $6,000.00. Although this may seem like a high fee to pay, Realtors are not walking away with the entire amount. There are brokerage fees, office fees, up front marketing dollars to attract a huge pool of buyers and miscellaneous costs associated. In addition, the commission is split from the top 50/50 with the buyer’s realtor.

Why Hire a Realtor?

Although it may seem like you’re losing money by having to pay commission, a recent survey noted that experienced Realtors can increase your bottom line profit more than if you tried to sell your property yourself (aka For Sale By Owner). This greater profit margin offsets any commission you would pay. In addition, just because you are conducting a For Sale By Owner (FSBO) sale, does not mean you won’t be paying commission. Nearly 99% of buyers are represented by a Realtor. A buyer’s agent can get paid in two ways – both of them by the seller. The first is by simply including the commission in the offer, and the second is when the seller out-right pays the commission for the buyer’s agent.

How Can you Save on Commission?

One way to save on commission is by negotiating with your realtor when they bring in a buyer. Have what was agreed upon in writing, and it will be a win-win for all parties. You, as the seller, will pay less on commission and your agent will earn a bit more.  Communication is key in real estate. All the fees associated with the home’s listing should be outlined in the contract. You should also make sure to obtain a Net Sheet, which shows approximately how much you will be profiting after all the expenses. As Elvin Villalobos says, “Ensuring all parties involved understand the entire process, and the precise figures will lead to the successful sale and transfer of your home.”

Elvin Villalobos and RE/MAX Interaction Realty

If you are selling your home and looking for help with the process, Elvin Villalobos and the team at RE/MAX Interaction. You can always count on us to provide the best advice for your needs.