What Percent Do Real Estate Agents Make
Real estate agents usually charge a fee of 3%-6% of the houses they sell. The fees in some states are higher and lower in others. In certain cases, the fees are negotiable.
Usually, agents work with other real estate agents. The listing agent takes half of the commission and the buyer agent gets the other half. If the listing agent sold the house on his own, then he gets the full commission.
Let's say if the real estate agent's commission is 5%, and the house is sold for $400,000. The seller will have to pay a fee of $20,000 to the agent(s), and the homeowner will receive $380,000. If there two agents work together to sell the house, then each of the agents will get $10,000.
You can use the real estate commission calculator to calculate the realtor's commission based on the estimated value of your house.
Should I hire a real estate agent to sell my house?
If you want to sell your house, there are a few things that you need to consider before deciding whether you should hire a real estate agent to sell your house or take the for sale by owner approach.
- Better Price - Experienced realtors are able to sell houses at a better price than houses that are listed for sale by the owner. It is in the real estate agent's best interest to sell your house for a higher price since their commission is dependent on the selling price of your home.
Experience realtors are excellent in marketing. They know exactly what the selling points of your house are for potential betters and they also have better negotiation skills than you because that is what they do.
In addition, the real estate agent is likely to have more data than you. They will evaluate your home and give you an appraisal on how much your house is worth. The appraisal is usually made based on recent transactions of similar houses that were sold in your area, and the conditions of your house.
- Quicker - Realtors can sell your house much quicker than you are. Usually, experienced real estate agents have a broad network of buyers, sellers, and other agents that they work with. This allows them to put your house on the market quicker and they might be able to bring a buyer sooner than you think.
For sale by the owner usually means you need to advertise your house and may need to pay money for promotion. If you are in a state or city where the real estate market is not hot, you may get stuck with your house for a long time. Simply putting up a sign that says "House for Sale" might not be effective.
Working with a real estate agent, on the other hand, it is their responsibility to bring potential buyers and they will cover any fees for advertising. In other words, if you need to sell your house as quickly as possible, hire a real estate agent.
- Open House - Selling a home takes time and effort. Open house is a procedure that real estate agents use to showcase your house to potential buyers. If you sell the house on your own, you will have to do all the work.
Depending on the price that you asked for, you may have to do open house sessions frequently in order to sell it. Time is money, if your time is more valuable than the commission, by all means, hire a realtor.
- Filter Unqualified Buyers - A lot of the time, you may need to deal with people who are unqualified to buy your house, either they are not eligible to get a mortgage, or they don't have enough money.
A realtor will help you weed out these unqualified buyers and only deal with the people who show genuine interest in your house and that are financially strong enough to close the deal.
They will require the potential buyers to have pre-approved letters from the bank so that they can get a mortgage, credit scores checked, and income and employment verified to make sure they have the ability to buy your house.
You can do these all by yourself if you have the time, but it is a lot of work since you are asking for this information from all of the prospects.
- Paperwork - A real estate agent will give you all the paperwork that is needed to prepare you for a smooth closing and help you avoid any legal issue that may come up.