There’s a lot more than meets the eye when selling a home with real estate agents.
When you sell your home, you always hope to get the highest possible price from your buyer. A good realtor can help you do this, but there are a number of caveats when you sell your home using a realtor. These caveats come in the form of real estate commissions and closing costs.
Today, we’re going to tell you who pays these real estate commissions and how they work in general. If you’re questioning the whole system of selling your home in the traditional way, keep reading, and we’ll shed some light on the extra fees and tell you what other options you might have.
Real Estate Commissions Explained
In hiring a real estate agent to help sell your home, you don’t pay them a flat fee or by the hour. Instead, they take a small cut of whatever your home sells for – this is known as a real estate commission. The contract that you sign with your realtor will determine what the commission ends up being.
Your realtor doesn’t keep the entire commission, however. The way that it works is that the realtor who sells the home will split the commission with the buyer’s agent. Usually, this is an even split unless there was some prearranged agreement that one agent would earn more than the other.
There’s actually one more step before your agent gets his or her commission. First, it goes to the listing/selling broker to cover their costs and pay themselves. After this, the remaining fee goes to the agents themselves.
How Much Are Real Estate Commissions?
So, how does this actually break down financially?
Real estate commissions are different in every state. The national average is currently sitting at around 6% of the sale price of the home. If you’re dealing with a $300,000 home sale, at 6% real estate commissions works out to be $18,000.
Now that we know who gets the money, we can take a closer look at the actual breakdown of funds. Most of the time, the commission is split evenly between the two agents, as well as the listing and selling broker. With this math, each entity takes 1.5% of the sale of the home, working out to $4,500 apiece.
It should be stressed that the 6% is an average. In reality, real estate commissions are negotiable, so you’ll need to work with your real estate agent to determine how much the commissions really are.
Who Pays These Commissions?
We know who gets the real estate commissions, but who has to pay for them? On the surface, it isn’t the buyer. The financial complexities of buying a home are all laid out at the beginning of the process, but for the seller, there’s a lot to deal with after the home is sold.
Yes, the seller is technically the one who has to pay the real estate commission. However, knowing that this is part of the standard operation of things, sellers fold the cost of real estate commissions into the price of the home.
So, you’re not paying an extra $18,000 after you’ve sold the home, you’re just receiving less when the home sells. You can adjust the asking price of the home accordingly, but at the end of the day, it’s still money that you could keep in your pocket.
Is It Worth It?
It’s not easy to say one way or another if a real estate commission is worth it. There’s no denying that it’s a lot of money to pay someone acting as a middle person in the sale of your home. On the other hand, many homeowners feel like they need a realtor to sell their homes for the most money.
There are scenarios where a realtor doesn’t have to do much at all. If your house is desirable enough in a hot market, it could sell in a day. Your realtor doesn’t have to do much to collect a massive paycheck.
It’s also possible that your realtor won’t do a good enough job, and you’ll have trouble selling your home. Having to pay a realtor a full commission when they don’t do their job properly can be extremely painful.
Alternative Ways to Sell a Home
It’s important for homeowners to understand that there are alternative methods for selling a home that doesn’t involve realtors. One of the most effective ways to sell a home quickly is by selling it to a cash home buyer.
This process is simple, fast, and there are never any hidden fees involved. Let us explain exactly how it works so you have a better idea.
Cash Buying Explained
When you decide to sell to a cash buyer, you start by getting in touch with them to provide details about your home. For us, it involves filling out a secure online form. Once we’ve got your contact info, we give you a call to arrange a visit to appraise your home.
You’ll then get a no-obligation cash offer that’s reflective of the market and the condition of your home. If you choose to accept, the process can be over in a matter of days. In fact, you choose a closing date that’s most convenient for you, and we’ll take care of the rest.
You get cash in hand, and we handle all of the paperwork. There are no real estate commissions or closing costs to speak of.
Choose the Right Cash Home Buyer
If the thought of paying real estate commissions bothers you, selling your home to a cash home buyer is a fantastic alternative. It’s really important to find a reputable cash buyer, however, since there are plenty of scammers out there.
Look at ratings and reviews, and always ensure that you’re dealing with an authentic company. As one of the top cash home buyers in the country, our priority is to conduct fair transactions that benefit you, the homeowner.
To get a no-obligation cash offer for your home, don’t hesitate to contact us or fill out our secure online form today.