Who Pays The Real Estate Commission? Realtor/ Real Estate Agent Fees

Who Pays The Real Estate Commission? Realtor/ Real Estate Agent Fees


– If you’re thinking
about selling your home, you may be wondering, who pays
the real estate commission? Well, stick around because what I’m gonna
be talking about today, and it starts right now. (upbeat pop music) Hey everyone, welcome back to my channel. I’m Ledeana Strand with Homes By Strand and RE/MAX Town and Country
in Port Orchard, Washington. If this is your first
time visiting my channel, go ahead and hit that
subscribe button down below and click on that little bell to be notified of my future videos if you want to be kept up-to-date on all things real
estate in Kitsap County. So, who pays the real estate commission? Is it the buyer or the seller? What about the standard commission rate? These are all great
questions that sellers ask when they meet with a realtor. Now, here in our local area, the standard commission rate
is anywhere between 5% and 6%, but it is negotiable and
it’s not set in stone until there’s an agreement
that’s taken place between the seller and the brokerage, and we use a contract called
the listing agreement. So, let’s use the example of the 5% on the listing agreement. From that 5%, the listing agent agrees to cooperate with a buyer’s
agent and give them half. So, 2.5% to the buyer’s agent,
2.5% to the listing agent. It’s important to know that
of the 2.5% commission rate that the listing agent gets,
that’s gross commission. Now, outta that comes their
split with their brokerage, any up front costs that they incurred while listing the property,
which includes advertisements, flyers, signs, putting up the signs, putting up lockboxes, et cetera. All of that comes outta
the 2.5% commission, then they get the remaining balance. Now, however, Uncle Sam is hungry and they want a bite of that too, ’cause remember it’s gross commission. So, essentially, as a listing agent, we’re taking on all the risks from hiring the photographer
and the videographer, running ads, placing the
sign on the property, printing the flyers, the
lockbox, you name it. We’re doing it upfront with the knowledge that when we sell your home,
we’re gonna get it back. Now, you definitely wanna be careful and aware of sales tactics and gimmicks when searching for your listing agent, and everybody wants your business, but some discount
brokerages will offer things like 1% commission rates or a
flat fee of let’s say $1,500. Now, in these scenarios,
there’s a lotta things that our broker just will not do, such as professional
photos, videos, staging, setting appointments,
negotiating with buyers, with agents, the contracts, and so on. Now, if you wanna do this and you think you could
take it on, that’s fine. You just wanna be upfront
and know what you’re getting for your commission that you’re paying. Remember, you get what you pay for. Now, it’s normal for some agents to discount the commission
rate to try to get business. So, in the scenario of the 5%, let’s say an agent
comes in and charges 4%. Now, immediately, most
sellers are gonna be like, “Yay, I’m saving 1%!” However, where’s that 1% coming from? Chances are the 1% is going to come out of the marketing of your property. Now, wouldn’t you want
your home to be exposed to the maximum amount of buyers so you can get the most net possible? I’m sure that you do. Instead of trying to search for an agent that charges the least
amount of commission, I would recommend focusing
on what you’re getting for the commission that
you’re paying the realtor. Now, with social media nowadays, you wanna make sure that your agent has a very detailed and
targeted ad campaign to get your home in front of the masses. A lot of agents use social media, but, surprisingly, less than
1% know how to do it correctly. Again, you need to get your
home out in front of the masses, and I can do that through very targeted
social media campaigns, and that is just one of the many ways that I advertise your home. Now, you’d be surprised
when you ask a realtor what I’m getting for my commission, what they list, and what they
say they’re gonna do for you. I think that’s a better route to take. So, that pretty much sums
up who pays the commission and the different scenarios that happen during a real estate transaction. But before you leave, and
if you’re ready to sell within the next, say, three to six months or if you’re ready now,
click on the link down below to download my free
Ultimate Sellers Guide, which is gonna walk you through the selling process step by step, such as what is a
comparative market analysis and how will it help sell your home fast and for the most amount of money, what is in the listing agreement, and should you stage your home or not? Picking the right realtor that is going to
aggressively market your home and negotiating are just
a few of the subjects that are covered in my seller’s guide. Now, this guide could potentially save you thousands of
dollars, so don’t miss out. Click on the link down
below in the description to get your copy. Now, if you have any questions, feel free to reach out to me anytime. Even if you’re not in Kitsap County, I’d be happy to connect you
with a great agent in your area. Thank you so much for watching my video, and I’ll see ya on the next one. Make it a great home-buying
and selling day!

20 thoughts on “Who Pays The Real Estate Commission? Realtor/ Real Estate Agent Fees

  1. Good information. You need to know what your getting for your money. And you want a good negotiator. Sometimes you save upfront on fees but there can be trade offs including more stress and problems.

  2. Great explanation! You definitely do get what you pay for when it comes to selling your home!

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