A Guide To Real Estate Agent And Broker Fees

Dated: 03/19/2015

Views: 635

Are you thinking about buying or selling a home? You’re entertaining a major financial decision, and it’s important to make sure costs are minimized when buying and maximized when selling. The mere mention of the word “fee” can make you cringe, and it tends to slow your decision-making as you investigate the details. Just what are real estate agent and broker fees, and how do they work? You will need the upfront answers to make the best decisions.

What’s Up with Broker Fees?

Upwards to 80 percent of homeowners use a real estate agent or a broker when purchasing or selling a home. It’s a smart move because a real estate professional is a valuable asset. They understand the local market. They know how to negotiate a good deal. And they are first and foremost concerned with landing the best possible deal because their business comes from word-of-mouth referrals.

Real estate agents work on commission. Therefore, they are only paid when a home sells. They won’t receive payment until after the settlement. Their commission is usually around 6 percent, split between the sales agent (i.e. the listing agent) and the buyer agent. The full percentage does not go to the sales and listing agents, though. It will first go to the listing brokerage where an agent then receives a cut of between 60 and 90 percent, sometimes lower.

According to Investopedia.com, it is highly recommended for potential homebuyers and sellers to research an agent prior to working with them. If their track record is good, it might be well worth paying a premium, which essentially means paying their full commission. In the long run, this move can save on expenses.

Tips for Homebuyers

Buying a home is a huge decision. It carries great weight because the house you buy will be your responsibility for years to come. A real estate agent can be your first and best defense against buying a lemon. As you search for the right real estate pro, here are some tips to keep in mind:

  • Shop Around: Search for an agent with a great reputation. They won’t be hard to find because they’ll be the most talked about in the community. Chances are they’ll also be involved in it. Remember, paying a premium can potentially save you thousands, especially when you choose the right real estate agent.

  • Go Local: If you’re an out-of-state buyer, find an agent local to the area you’re planning to buy in. In today’s high-tech world, it’s easy to establish and maintain a business relationship with far away pros. And the real estate world is often best entered with a local, knowledgeable agent.

As a homebuyer, be aware of what a listing fee is and how to ensure your costs are minimized. A trained real estate professional will be able to back you up in doing just that.

Home Sellers

As a home seller, using an agent is your choice. A listing fee will apply, and it’s traditionally in the neighborhood of 3 percent.

Some sellers attempt to sell a house outright. They hire an independent appraiser to ensure they price the home correctly, and then they hit the seas of the market on their own.

The smoothest sailing comes with a real estate professional at your side. Their expertise is invaluable for circumventing and navigating turbulent water. They have knowledge of everything from local market trends to the nitty-gritty details of procedures and contracts. And if you happen to be selling an unusual property, they can make the difference between a short and long sale.

Where to Look in Hampton Roads

Making a move to buy or sell a house is one of the largest financial decisions and transactions most people undertake. Understanding how real estate agents at each end of the transaction get paid is important. It’s knowledge that can assist in choosing the best agent and securing the best deal.

If you’re looking to buy or sell in Hampton Roads, start your search with Blu Skyy. We are committed to offering the kind of service you need and want. In fact, we’re listing homes for 1.5 percent versus the traditional 3 percent rate! Learn more in our upcoming release entitled, Why You Need to List Your Home with Blu Skyy Today.

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Chenea Powell

Whether it is your first home or the home you plan to retire in, I will be there to ease the process every step of the way! I find great pleasure in helping people achieve their goals in real estate a....

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