How much does a Realtor® cost?
Looking at buying or selling a home? A Realtor® is an important figure in both processes. If so, you’re probably wondering how much a Realtor® costs. I think there’s a lot of misconceptions about how much Realtors® cost or how we get paid, so I thought I’d break it all down for you below!
How much does a real estate agent cost?
Realtors® get paid through commission, which means we only get paid when a transaction closes. We’re not paid hourly or on a salary. In general, Realtors® are business owners and are independent contractors through a broker, and only make money when a deal goes through.
One thing to note: some Realtors® charge a flat fee, but typically, commission is paid as a percentage of the sales price of the home involved in the transaction.
That percentage is usually around 5% to 6% of the sale price, and is split between the two real estate agents involved in the transaction (the buyer’s agent and the listing agent).
That might seem like a lot of money, but something else that people might not know is this: most brokers also take a cut of their agent’s commission - and depending on how experienced the agent is, I’ve seen some commission splits start as high as 90/10 (90% to the broker, 10% to the agent). So, something to be aware of when you think about commission in the overall picture!
Are real estate commissions negotiable?
There are no set commission rates for Realtors®. Generally, 5% to 6% (for both agents) is pretty typical, but it can vary! You can always negotiate with your Realtor® to find a commission you’re both comfortable with.
I will say though: the phrase “you get what you pay for” can be true even in real estate. While not always the case, the commission you’re paying not only goes toward paying the agents involved in selling a house, but also helps pay for the listing agent’s advertising dollars that go toward getting exposure to your house. Some agents who agree to a lower commission may also reduce the amount of advertising they put behind your home.
Before I got into real estate, I’ve been on both sides of the home buying and selling process, so I understand - it’s a lot of money! And while most Realtors® will do a great job no matter the commission, buying and selling a home is one of the biggest and most important transactions in your life, so the commission probably shouldn’t be a sole determining factor
Who pays for Realtor® fees?
In general, the seller pays the commission of both their listing agent and the buyer’s agent. This is because the buyer’s agent brought a buyer to their home and was a large part in coordinating a smooth transaction, so the seller pays for both agents’ work. (Keep in mind, though, that buyers and sellers pay for different real estate closing costs, so it’s not like the seller is paying for everything!)
If you’re in the Las Vegas area and are thinking about buying or selling your home, I’d love to answer any questions you may have! Feel free to contact me here.
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