If you have never sold a house before and are ready to sign a contract with a real estate agent to help you sell your home, you may be surprised to learn that the average real estate commission is around 6%. This might seem like a high rate for selling a house, but it really is a fair rate, and you may see this once you understand what your agent will do for you and how the commission is paid.
What your agent will do for you:
When you hire a real estate agent to help sell your home, he or she will have a lot to do to make this happen. With each listing, an agent will complete the following tasks:
These are just some of the things real estate agents do, but there are many others. Real estate agents can spend hours, days, and weeks on selling a house, and this eliminates the work you would have to do if you sold the house yourself.
How the commissions work:
When you list your house, you will not pay the agent a dime until the house sells. If the house never sells, you will pay nothing for all the work the agent did to try to help sell it. When the house does sell, the commission is calculated by multiplying the commission rate by the asking price. If the house sold for $180,000 and the commission was at 6%, you would pay a total commission of $10,800. Your agent will not receive all of this though.
The main thing to understand is that the agent who listed your home may not be the agent that sells the home. Once the home is listed, any agent can show the home. When another agent shows the home, this commission is split in half (usually) between both parties.
Unfortunately, though, the agents do not keep the full 50% of the commission amount. They typically have to pay the agency they work for a certain percentage, plus they have to pay their own expenses. Their expenses can include money for gas and advertising. In other words, your agent may not earn a lot of money on the sale, even if the rate is set at 6%.
If you would like to learn more about selling your home through a real estate agency, contact an agent in your neighborhood today.
Share21 December 2016
After I decided to buy a new home, I realized that I probably needed to prioritize the things on my wish list. Since I am not wealthy, I realized that I probably couldn't get everything that I wanted out of a single home--at least, not this time around. Fortunately, I worked with an incredible real estate agent who helped me to figure out which type of property would pay off in the end. Finding a home took a lot of time, but I am really pleased that I found the right one. This blog is all about learning to prioritize your home hunting wish list so that you can have the home and financial situation of your dreams.
