Who pays the realtor? This is a question that many people often ask when looking to sell their home. Selling your house on your own can be quite stressful and time consuming, and you may not be able to list your home quickly in order to take advantage of all the potential home selling prices. On top of listing and selling your home yourself, you have to pay for the real estate commission, attorney fees, realty consultation fees, taxes, etc. If you are selling your home by yourself, who pays the realtor?

The Home Seller Typically Pays the Real Estate Commission to the Realtor

The fees that are paid to the real estate agent are referred to as “grounds charges” by the FHA. In most states, a seller pays these fees regardless of whether they intend to list the property or if they are listing it with an agent. However, the majority of realtors agree that a buyer’s agent is entitled to a portion of the “grounds charges” each month. This is typically a percentage of the listing price, which means that if your property is sold for less than what you are charging for it, you can expect to pay the realtor for their services.

What is Real Estate Commission?

A real estate commission is an annual fee paid to a realtor to sell a realty property to another person. The realtor’s fee is paid to the realtors by the home seller and this fee usually varies between six to ten percent. The commission rate paid by the realtor depends on the size of his or her home business. It is also dependent on the realtor’s knowledge of the local realty market in the areas where he or she serves as a listing agent.

What is the Average Commission Rate for Realtors?

The commission rate that you will receive can vary significantly from seller to seller. The average commission rate usually lands at between 5-6% of the sale price. A seller who wants to split the commission rate will typically consult with a real estate lawyer to get an accurate figure. It will be in the seller’s best interest to try to get as high a commission rate as possible. The reason is that this portion of the transaction is usually the largest expense for a seller. If he gets a high commission rate then he will be able to relieve a lot of his financial obligations associated with the home selling process.

There Are Two Different Ways For a Home Seller to Pay a Realtor

Real estate commissions can be in one of two forms, a fixed fee or a percentage of the sales price. There are many different ways that a realtor can make their money. Some brokers earn their fees by doing joint ventures with other real estate agents and some brokers make their money solely by closing a sale. Most real estate agents do not charge a fixed fee, however, there are some brokers who do. These agents are generally found online or in the yellow pages of your telephone book.

The way that the commission is split in these transactions is very important. If a listing agent only earns one percent of a house selling price, does this mean that they will get one-fifth of the commission on each sale? No, it does not mean anything. The buyer, who pays a fixed fee to the listing agent will split that fee equally between the buyer and the seller. A buyer paying a listing commission does not have to do his or her research; the agent simply tells the potential buyer what the commission is.

It is Impossible For a Realtor to Get All of the Commission Money

Another aspect of commission splitting that is important to know is that it is impossible for a realtor to get all of the commission money. A portion has to be paid to the commission-only broker. Now, the closing costs are not refundable and they cannot be altered in any way during the transaction. However, part of the commission will be put into a savings account which the seller will be able to access throughout the life of the contract. This is a wonderful idea because it allows the you to have a bit of security in the future when selling your home. It also makes it easy for an agent to access the savings as needed throughout the life of the contract.

Conclusion

There are several different ways in which real estate agents can split the commission costs of a house sale. They can give the buyer a break on one or both parts of the purchase price and they can split the cost between the two parties. However, the person who is listed as the seller has the final say in all matters concerning the price that is set by the buyer. This price will include any mortgage rates or insurance and/or down payment money that is paid by the buyer. If the seller agrees to the price then the buyer should feel comfortable with the price that has been offered.

What not to do When Putting Your Home on the Market

If you are thinking of selling your home there are quite a few things to do. This includes hiring an experienced, local real estate agent to list your home and work with you from listing all the way through closing. You need to price the home correctly and pay a decent real estate commission to the buyers agent to incentivise Realtors to show your home.  There are a few things you shouldn’t do, however.

Don’t Over-Improve Your Home

Many sellers do a few things to get their homes ready to list for sale. If you have colors on your walls that are not neutral, it’s a good idea to paint them a neutral color. Making a few repairs are a good idea if you know of any defects or safety hazards. Changing a few rooms of carpeting is a good investment if the carpeting is old, worn or stained. Just don’t do any improvements that are expensive and specific to your tastes and colors.

Your real estate agent can guide you on what is important to update or change. You want to do things that will get you your money back and then some. You don’t want to spend an excessive amount of money on updates or upgrades that won’t get you your money back.

Don’t Over-Decorate or Over-Stage

The rule of thumb is “less is more” when it comes to staging and decorating a home when you list it for sale. It’s always a smart idea to start packing by putting away some of the knickknacks and photos on your tables, shelves, and walls. Be sure your kitchen counters show that they are spacious by putting away some of your small appliances and decorations you have on them. If you have collections that you display, it’s a good idea to pack those before listing your home. Put away your toiletries and whatever other personal items you keep on your bathroom vanities.

If your rooms have too much furniture in them and it makes them look crowded, store them during showings. The less you have in a room, the larger it will look. You want to show your prospective buyers as much open space as you can so they can imagine their furnishings in the home. Vacant houses give buyers a blank space to envision themselves in. If you want to stage your home, do it minimally. Talking to a professional staging company will help give you ideas.

Don’t Stay in the House During Showings

It’s best to leave your house during showings. Buyers and their real estate agents don’t want you hanging around and following them during the showings. Some sellers like to be there in case the agent or buyers have questions. This is one of the reasons you hire your real estate agent. If they have questions they can call or email your agent. Buyers like to talk freely with their agents about things they like about the house and things that don’t suit them. If you are there, they won’t feel comfortable talking among themselves or with their agent. If you have a pet in your home and have to stay home because of your pet, it’s best to take your pet out of the house for showings. Take them for a walk or a ride in the car. If a showing is inconvenient because you have children napping, ask the buyers agent ahead of time to reschedule.

Don’t Get Down About Negative Feedback

Don’t take things personally when you receive negative feedback. Your buyer is out there somewhere. Some people get very upset and defensive if some of the buyers don’t like their home. A home is very personal. Also, don’t get too upset if you receive a low-ball offer on your home. It is a buyer’s agent’s job to help their buyers get a deal on a house. Just negotiate the offer until it’s a win-win and you can agree on a price. If you cannot get to a price point where you and the buyers agree, then move on to the next showings and offer.

Listing and selling a home can be stressful at times. Try to stay positive and think about the wonderful future ahead of you in your new home. Listen to your real estate professionals. They do this for a living and the advice they give will benefit you.