Hiring a realtor is a great decision when selling your home, but the fees can be high. Although it’s possible to sell your home on your own, an experienced Del Aria Teamâ€™s offering valuable services, especially in fast-paced, hot markets. Another major benefit of hiring a realtor is that they are paid only when your home sells, so their main motivation is to get you the best price possible.
Fees charged by a real estate agent
Fees charged by a real estate agent are based on the type of transaction that the agent is involved in. Traditionally, an agent is compensated by a percentage of the sale price, which the seller will factor into the listing price. However, some FSBO home sellers will not pay a commission, opting instead to work with a buyer’s agent.
However, some states have made it illegal for brokers to charge a commission. These fees are typically equal to one month’s rent. While this may seem insignificant, it can amount to thousands of dollars. A recent change in the law has made fees legal again. You can now avoid paying a broker by renting a home directly through the landlord or property management company.
Real estate agents usually charge a commission of five to six percent of the final sale price. This amount may vary depending on the area or type of property for sale. However, fees are generally negotiable. If a home costs $300,000, a 5% commission would mean that a real estate agent earns anywhere from $16,000 to $28,000. The percentage charged by real estate agents is dependent on several factors, including the total sales price of the home, housing supply, market trends, and the cost of living.
Commissions for real estate agents have decreased over the past several decades. According to Bankrate, the average real estate commission is 5.5 percent, down from six percent in 1990. However, this decrease in percentage does not mean that agents are earning less than they were in the past. The percentage charged by real estate agents is still negotiable, so they are still making more than their predecessors.
Flat-rate vs commission-based agents
When hiring a realtor, you should consider whether you want to work with a flat-rate or commission-based agent. A flat-rate agent charges a flat fee rather than a commission, which can save you thousands of dollars. A commission-based agent will usually earn five to six percent of the selling price of the home. While this rate is higher, it can also be negotiated. However, it’s important to remember that commission rates are not set by law and can vary from state to state.
Another difference between a commission-based and flat-rate realtor is their service fees. Some commission-based agents will charge a percentage of the sale price, while others charge a flat fee. You need to keep in mind the number of clients an agent has, as this can impact the level of attention they provide to each client. If you need the services of a real estate agent immediately, a flat-rate agent may be the better option for you.
A flat-rate realtor has no obligation to work for a lower commission than a commission-based agent. If you sell your home for $600,000, your flat-rate realtor will charge you $5,000. That amount may sound small, but it’s still less than $31,000 saved.
Closing costs separate from commissions
Whether you’re buying a home or selling your existing one, it’s important to understand the costs involved with real estate transactions. While many consumers overlook these costs, they can make a huge difference in the process. In most cases, a realtor’s commissions are covered by the seller and are not included in the closing costs.
Closing costs include the charges associated with closing a transaction, such as lender fees, appraisal fees, home inspection fees, transfer taxes, and more. These expenses can add up to about 15% of the purchase price. In some cases, the seller pays these costs, but they’re usually split between the buyer and seller.
When hiring a realtor, you should ask about the costs involved in closing. The average closing cost is 6 percent of the sale price. In some cases, you might even be able to negotiate who pays for them. For example, if you’re a motivated buyer, you may be able to pay your realtor’s fees. Alternatively, if the buyer counter-offers the sale price, the seller may pay the fees.
Closing costs can be a huge burden to buyers. In addition to commission costs, there are often other costs that come along with a sale, including homeowner’s association fees and utility bills. These costs will be pro-rated according to the date of closing.
Del Aria Team
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