What Is A Real Estate Agents Commission


What is a Real Estate Agent’s Commission?

A real estate agent’s commission is typically a percentage of the sales price of a property and is the main income source of a real estate agent. This commission is typically paid by the seller of the property, although there are times when a buyer may pay the commission to incentivise the real estate agent to show the property to more potential buyers.

Computation of Real Estate Agent’s Commission

The amount of commission a real estate agent will receive varies from region to region and is typically agreed to with the seller before a listing agreement is signed. The typical commission rate is between 3-7% of the sales price of the property, although it may be higher depending on the market.

Who Pays the Commission?

As mentioned previously, the seller of the property is typically responsible for paying the real estate agent’s commission. Nonetheless, there may be cases where the buyer pays the commission in order to incentivise the real estate agent to show the property to more potential buyers.

Benefits of Hiring a Real Estate Agent

There are many benefits to hiring a real estate agent, some of which include:

  • Expert Advice: Real estate agents are experts on the local market and will be able to guide you in making the best decisions regarding pricing, negotiations, and other factors.
  • Increased Exposure: A real estate agent will be able to list your property on sites that most individuals won’t be able to access, thus increasing the chance of finding a buyer.
  • Access to Buyers: Real estate agents also have access to a large list of potential buyers, increasing the chances of selling a property quickly.

Hiring a real estate agent may sound like an expensive proposition, but considering their expertise, their ability to quickly sell your home, and the cost savings they can bring to the table, the benefits often make agency fees worthwhile.