December 21, 2010

Real estate commissions - how do they work?


For the first time seller or buyer, real estate commissions can be a confusing thing.

To understand who pays real estate commissions -- whether it's sellers or buyers or both -- we need to look at how real estate offices and their agents are paid, and how they share cooperating commissions. 

 
How Real Estate Commissions Work
 
*  Real estate agents work for a real estate broker/office.

*  All commissions paid from a sale pass through the broker/office.

*  The real estate broker/office pays their agent a portion of the commissions the office recieves from the sale.

*  While sellers usually work with individual agents, the listing agreement is between the seller and the real estate broker/office.

*  The most common type of listing agreement between a seller and her agent gives that agent's broker the right to exclusively market the home. In return for bringing a buyer to the table, the seller agrees to pay a commission to the broker. Typically, this fee is represented as a percentage of the sales price and is shared between the listing broker and the broker who brings the buyer.

What is the Actual Commission Rate?

It is important to note that commission rates are not fixed and are negotiable but generally range from 5% to 7% of the sales price.  Real estate commissions and transactions vary from state to state, broker to broker and even locations within states can be different. 

When you begin to consider the sale of your home, be sure you fully understand the differences between the full services offered by Schwartz Property Sales and the lesser promises advertised by discount real estate brokers.

*  Consider the true risks in trusting the sale of your most valued asset to a company that offers anything less than going beyond the expected to provide you with an outstanding full service real estate experience.

*  The limited services of discount brokerages could prevent you from selling your home quickly or getting the best possible price for your home.

*  Getting the best price often requires the expert negotiating services of a skilled professional who is educated in the intricacies of the most complex real estate transactions - but some discounters expect you to negotiate on your own.

*  Schwartz Property Sales monitors the entire process from initial contact through closing, keeping track of all obligations and promptly resolving any issues.

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Tracy Larson, Realtor in the Florida Keys / 305-522-3812
Thank you for visiting Florida Keys Market Update for information about the Florida Keys real estate market. Licensed since 1993 and a Keys local since 1987, I want to be your Realtor here in our island paradise. Note: Information for listings featured on this blog is gathered from our local MLS; not all properties are my listings.
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