Whether you’re a homeowner or prospective buyer, the common question in everyone’s mind is, “who pays the real estate agent?”
There are a lot of misconceptions out there with regards to the commission of Georgetown real estate agents. First off, real estate agents typically have no legal authority to enter into contracts with parties.
Most states only give that right to real estate brokers. As a result, any transaction entered into by the real estate agent must first pass through the broker where they attach their license to.
So the process is this:
- The real estate agent will bargain with both the seller and buyer for the right price
- You close the deal
- You pay the fees, which will be endorsed to the real estate broker
- The broker will sign the listing agreement with the seller
- The broker will give the real estate agents their commission
But that Still Didn’t’ Answer the Question
Customarily, the seller will shoulder the commission fee of Georgetown real estate agents. The commission fee is usually from five percent to seven percent of the total purchase cost of the property.
As a buyer, you don’t have to pay for anything. However, the commission fee is already baked in the selling price of the home.
There are several modes of computing the commission. Some real estate brokers will charge a fixed percentage commission on the first $100,000 of the total value of the house. The broker will then charge a smaller percentage for the remaining balance.
For instance, the real estate agent will charge a flat fee of eight percent for the first $100,000 and two percent for the remaining balance. In some cases, the realtor will simply charge a flat rate, which is ideal because you will dispense with all the complex computations.
This is why you should never be embarrassed to ask questions from your real estate agents regarding their commission fees. This is something they already anticipated and prepared for.
While the buyers don’t pay the agent, they will shoulder the closing costs, which will range between two percent and five percent of the purchase price.
Some home sellers, however, will also pay for the closing costs to sweeten the deal.
The closing cost is the umbrella term for the multiple expenses you will incur before you can take out the house. Among these include:
- Attorney’s fees
- Application fee
- Credit report
- Home inspection
- Survey fee
- Underwriting fee
- Administration cost
- Courier fee
- Property tax
How Much Will the Broker Pay the Agent?
Real estate agents and brokers operate on a commission agreement. The amount varies, but the typical arrangement is between 30-40%.
Meaning, for every $100 you pay the broker, at least $30 of that will go to the agent.
You may think that you will save money if you simply don’t hire the services of a real estate agent. However, you may be risking a lot. Most homeowners and homebuyers deal with brokers and agents anyway. That means you are severely limiting your target market. Also, you have very little elbow room for making a mistake, which can cost you more in the long run.