A good real estate agent can be a valuable asset if you’re looking to sell your house.
In return for their expertise and time, agents charge a commission fee. What exactly are agent commission fees covered by? What can homeowners expect in return for these costs?
Learn about real estate commissions, their cost, who pays them, and how sellers can save money.
Table of Contents
What is the average real estate commission?
Who Pays Real Estate Commission Fees?
What are the Real Estate Commission fees?
Can I Negotiate Real Estate Commission Fees?
Can you avoid paying commission fees?
What is the best option for me?
What is the average real estate commission?
What is the commission for a real-estate agent? Clever Real Estate conducted a survey of agents across the country and found that the average commission is 5.45%. The answer depends on where you live, since realtor rates vary widely by state.
In Florida, for example, the average commission fee is 6%. This is split evenly between buyer’s agents and seller’s agent. Texas has a lower average commission fee of 5.65%. New York, California and D.C. all have lower rates than the national average. They are 5.29%, 5.02 % and 4.90 % respectively.
It is important to note that the home sale prices of New York, California and Washington D.C. may also be higher than average. This could offset any savings from lower commissions.
Agents charge different rates. Some agents may charge a lower rate if you bargain with them. There are discount brokers, such as Clever real estate, who negotiate on behalf of their clients to get lower rates. We will discuss this later in the article.
Who Pays Real Estate Commission Fees?
In most cases, the seller is responsible for paying real estate commissions. This means that sellers are responsible for paying both their agent to list the property and the agent of the buyer.
The commission is usually divided between the agents, but it can be varied. Some experienced agents get more than others. Dual agents, who represent both the buyer as well as the seller will receive both commissions.
The fees of both the seller and buyer’s agents are set in advance by their contracts with clients.
What are the Real Estate Commission fees?
Real estate agents are paid a commission based on their expertise, time and services. A good agent can make the process of selling your home much easier and has a wide network of buyers who will show you your property.
In a seller’s market, they know their area like the back of a hand and may be able to bring in multiple bids. Multiple offers can even lead to a bidding battle, giving you greater leverage in negotiations.
Your agent will take care of all the details of selling a house, including listing it on MLS, marketing via various real estate channels and negotiating with buyers.
A knowledgeable agent with good connections will also result in a more expensive sale. According to a recent survey conducted by the National Association of Realtors, the average FSBO (for sale by owner) home sold for $190,000. This compares with $249,000 when an agent is involved.
Most people choose to use agents because of the huge difference between the sale price and the amount they save.
Can I Negotiate Real Estate Commission Fees?
You can and should negotiate your commission fees.
Agents know that in the current market where clients are looking for lower rates, they can easily go elsewhere. If you live in a high-demand market like Miami or San Francisco, or have a home that is likely to sell quickly then you should try to negotiate a lower price.
You can ask for a lower price, but your agent is not obliged to comply. Consumer Federation of America reported that 73% of agents would not lower the standard rate for a client who asked.
You may be a person who sees the glass as half-full, but this study shows that over one-fourth of agents will lower their rate standard if asked by a client. Negotiating for a better price is not a bad idea.
Can I avoid paying commission fees?
Instead of paying commissions, homeowners can use a local Multiple Listing Service (MLS) which charges a flat rate between $99 and $500.
The owner is responsible for the usual responsibilities of an agent, including marketing, closing costs, home inspections and more. It isn’t easy to sell a house as FSBO. This is why only 7% used this method of selling in 2019.
Clever Real Estate is a discount broker that offers a flat-fee service instead of charging a commission based on a percentage.
Clever negotiates lower rates with local top real estate agents. They offer a full service sales experience at a flat rate of $3,000, or 1% for homes selling for over $350,000.
Brokers can offer such low rates because they provide agents with a constant stream of income, which allows them to compensate for the commissions they lose by increasing their volume.
What is the best option for me?
You should consider the amount of time and effort that you are willing to put into selling your house before deciding whether or not to hire an agent.
Listing on a local MLS may be the best option for you if you are a real estate expert who knows the market. You may not be a real estate expert, but if you’re like most sellers and don’t know much about the market, using an agent will probably be a better choice.
Here’s an example of what you would pay for a commission on a $211,000 home if you used a discount agent, a traditional broker or a flat-fee MLS listing service.
Real Estate
You can see that using a discount agent versus a conventional agent will save you a lot of money.
Clever Real Estate is a discount broker that many people choose. Clever Real Estate offers its clients a full-service experience at a flat fee of $3,000 or just 1%. All of Clever’s agent are the best in their respective areas.
List your property today by visiting listwithclever.com and getting in touch with the thousands of local agents.
This article was originally published on Wealth of Geeks. It has been republished by permission.
