Derek Morgan

Derek Morgan

Real Estate planning with professional agent
Derek Morgan

Derek Morgan

    Who Pays the Real Estate Agent Commission?

    When it comes to buying or selling a home, having a top-rated, knowledgeable real estate agent by your side can make all the difference in the world. One question that often comes up is who exactly pays the real estate agent commission? In this post, we'll take a closer look at the standard practices, how much you can expect to pay, and whether or not you can negotiate who pays the real estate agent.

    The first thing to consider is who typically pays the real estate agent commission. Standard practice involves the seller paying the real estate commission for both the listing agent and the buyer's agent. This may sound like a raw deal for sellers, but it's important to keep in mind that most sellers will "wrap" the commission into the price of the home. So, in a sense, the buyer is indirectly paying for the commission. 

    But how much can you expect to pay in real estate agent fees? The total commission is commonly a fee paid at closing by the home seller, unless some other arrangement has been made. The commission is usually a percentage of a home's sales price; so if the commission is 6% on a $200,000 house, that would amount to $12,000, which is split between the buyer's and seller's agents. It's important to keep in mind that commission rates can vary from state to state and even within individual brokerages. It's always a good idea to review the details of the agent's fee in the agreement you sign when hiring an agent, and to ask questions if there's anything you don't understand.

    It's also important to note that additional costs, such as photography, the cost of listing the property, and the cost of any printed materials or signs are usually included in the fee. However, if you need to do major staging or repair work, those costs will come out-of-pocket.

    What if you want to negotiate who pays the real estate agent? While the seller can negotiate the terms of the listing agreement with the brokerage or agent, buyers can also offer to pay some or all of the agent's fees as a way to stand out in a tough housing market or bidding war. Even though buyers usually pay most of the closing costs, these costs are also up for negotiation, and a good agent will help you get the best deal possible.

    Another aspect to consider is what is known as "dual agency, where one agent represents both the buyer and the seller. In this scenario, the dual agent (sometimes called a transaction broker) gets both commissions on the sale. However, dual agency isn't typically practiced among real estate agents and may even be disallowed in some states. The reason is that having the same person represent both parties in a home or property sale can create a conflict of interest. 

    Remember, a good real estate agent can make all the difference in the buying or selling process and is well worth the commission. They will help you navigate the complex process of buying or selling a home, and will help you find the best deal possible. So whether you're buying or selling, it's essential to understand the real estate agent commission and fees, and to have a good agent by your side to help you through the process. 

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