How much should the real estate agent earn?
In residential purchase/sale transactions, it is usually 6% of the sale value of the property, which is divided 3% for each of the agents involved in the transaction, that is, for the representative of the buyer and the representative of the seller.
In the case of a residential rental transaction, the standard is 10% of the value of the annual contract or one month of rent. This commission is divided equally for each of the real estate agents involved in the process.
Who should pay the commission?
The owner of the property is always in charge of paying the commission, both in the case of sale and rental. This transaction is carried out on the closing day and the lawyer is in charge of giving the money to each of the parties.
It is important that you understand how a real estate agent earns his money:
Real estate consultants are not paid by the hour, or by completion of work done, they only charge if the transaction is successfully closed. An agent can spend days or months working with a buyer or seller and if the transaction is unsuccessful, they are not paid.
Where is the amount of the commission established?
This must be stipulated in the agreement to promote the property. Said agreement stipulates the percentage of commission that the agent will receive at the closing of the transaction and the percentage to be paid to the agent who represents the buyer/tenant. This percentage is published in the multiple listing system (MLS) along with the other data of the property, in this way the agents are aware of how much their fees will be at closing time.
It is important that you understand that the support of a professional real estate agent is worth every dollar of the commission.
Does the buyer pay any commission?
No, this hardly happens and the truth is unusual. The home buyer in the vast majority of cases does not pay any kind of commission to the real estate agent.
Can the seller save the commission?
89% of all sellers use the advice and support of a real estate agent. Only 8% of all sellers attempt to sell the property on their own for the sole purpose of saving six percent (6%) of the commission.
However, it is important to understand that you are highly unlikely to succeed in the United States real estate market without the support of a professional and knowledgeable real estate agent to guide you through every area of the process.
Deciding to carry out a real estate transaction is one of the most important in a person’s life, we recommend that you hire a professional, a real estate agent who has a team capable of providing legal, financial, inheritance and tax advice, like the one you need.