Selling a home requires real estate agent commissions for the majority of people. However, what exactly are commissions from real estate agents, how are they calculated, and how much should you pay?
There are a lot of costs involved when selling your home Est Property A real estate agent, on the other hand, is an essential partner in achieving the best possible sale outcome, just like other professional services you’ll need during the process.
How much will it cost you to hire a real estate agent to sell your house? Everything you need to know is here.
Some Factors That Affect Real Estate Commission Fees
Your Property & Its Value
The kind of property you are selling and how much it is worth can have a significant impact on the commission fees charged by your agent. The agent might charge less for your home because they won’t have to work as hard to sell it if it has a wide range of appeal and is likely to be purchased by a large number of people.
However, because they will need to put in more effort to sell your property, your agent may charge a higher price if you have a truly one-of-a-kind property that will only attract a small number of buyers. If your home is highly valued, your agent may be willing to negotiate a lower price for you. This is because, even at a lower rate, the agent will still receive a respectable commission.
The Agents Experience
Long-time home sellers typically charge more because you are paying for their expertise. On the other hand, younger agents might charge less. However, if you choose an agent with more experience, your home may sell for a higher price, so even though you pay more, you might get more money back when you sell.
Fees can also be affected by differences between agents in your area. Prices will likely fall if there are a lot of agents competing for your business nearby. That being said, you can anticipate paying a higher fee if there are not many agents working in your area.
The Commission Structure
The commission structure of each agent determines how much they charge. For the most part, there are two kinds of commission structures: tiered and fixed
The most common type is fixed, which is calculated as a predetermined percentage of the sale price. If you sell your home for $1.5 million and lock in a 2.5% commission rate with your agent, Agent fees would then cost you $37,500.
A performance-based fee structure called “tiered” encourages your agent to sell your home for more money. You could, for instance, agree to pay them 2% if your house sells for less than $1.5 million, or 4% if it sells for more than $1.5 million.
Additionally, some agents charge flat fees, which are based on a predetermined dollar amount, regardless of the sale price. The agent’s fee may or may not also include GST and the auctioneer if you are holding an auction. Regardless of the kind of commission structure that an agent uses, you should always find out exactly what is included in their fees and compare several agents to ensure that you are paying a fair price.
Make sure you get the rate in writing once you’ve agreed on it. This will protect you in case something goes wrong. Also, keep in mind that you cannot negotiate the commission after the sale, only before.
Now that you understand how real estate fees work, it’s time to pick experienced real estate agents to help you sell your home with peace of mind. This is where you should choose Established Property, the experts in the field, they will make life so much easier.