Learn About Real Estate Agent Commissions

For many, buying or selling a home is an inordinately stressful event. Between managing finances, redecorating, packing, and engaging in total life upheaval, the experience can be a lot to handle.

Fortunately, the job of a real estate agent is, more or less, to put clients at ease. Consider that when handling your agent’s commission.

How Real Estate Agents Help

The ideal real estate agent is the ultimate jack-of-all-trades. She endeavors to do everything in her power to make her clients happy, and that requires knowledge of myriad tasks. The basics of the job entail:

  • Listing the home
  • Marketing the property
  • Offering price recommendations
  • Negotiating with buyers and sellers
  • Handling the transaction and closingLearn-About-Real-Estate-Agent-Commission-300x200
  • Manage the home inspection

An overwhelming majority of people use real estate agents to manage buying or selling their homes, and it’s easy to see why.

How Commissions Work

Real estate agents are only paid when the clients they represent successfully sell or buy a home. They don’t get paid otherwise.

This format motivates the real estate agent to work tirelessly to ensure that the client undergoes the best experience possible. Agents want the transaction to go as smoothly and as quickly as their clients do.

For the fine details of an agent’s commission, clients should check the contract they sign. Typically, the real estate commission fee is 6% of the transaction cost. Some may be higher; some may be lower. It’s even possible for a client to negotiate the fee down, if necessary. The National Association of Realtors encourages agents to go no lower than 5%.

But the individual agent does not take home the full commission. If another agent is involved in the transaction, the commission is split. The remaining amount is then apportioned to a variety of fees, sometimes leaving the real estate agent with only 30 to 40 percent of the original commission.

When negotiating a contract, it’s important for both the client and the agent to consider the most appropriate commission for their partnership.

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