Determine Who Pays Real Estate Commissions Posted By : Adam S. Waxler
01.02.2010 00:02
There undoubtedly are lots of things to consider whenever you are selling a house. One of the things that you might wonder is who pays real estate commissions? Is it the purchaser, the seller, or some mixture of both? The answer to this question couldmay well surprise you.
In a normal real estate deal the seller of the house is the one who pays real estate commissions. This is usually 6% of the ultimate sale price having 3% of that going to the selling agent and 3% going to the buying agent. However, people should also understandthat these agents have to then give a percentage of the commission to their broker. While some agents can keep 100% of the commission and only pay a desk fee to the broker, most of the agents must pay anywhere from 30% to 50% of the commission to the broker.
However, since the seller one who pays real estate commissions, the commission is going to greatly effect the cost of the home. The seller is going to raise the cost of the home so that they can cover the cost of the commission he must pay at closing. This, in turn, has a bad impact on the purchaser as the house is going to cost more money to buy. It also makes it more challenging for the seller to negotiate and lower his price because he has to cover his costs. Not having the ability to come down in price can sometimes be the difference between getting the sale or not.
So, is there any possibility of avoiding this fee?
Well, yes and no.
Like acknowledged earlier, when a real estate agent is responsible for selling your house there is going to be a fee of 6% that goes together with it. The vast majority of brokers won't permit their agents to lower their commission in order to make a sale.
On the other hand, if you go with a flat fee listing service then it's likely that there won't be anyone who pays real estate commissions or at most the commission will only be 3% to the buying agent.In either case, this will permit the seller to come down in price and save everyone thousands of dollars.
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