Realtor fees also referred to as agent fees or commissions, are a piece of just about every real estate deal.
Commissions are how most agents are paid for the houses they sell. Some agents will offer their services for a flat rate; however, most realtors charge a percentage of the sales price once the deal is done. The exact percentage can vary from one agent or location to the next but typically ranges from 5% to 6% of the home’s final cost.
So who is responsible for paying these agent fees? Find out more below.
Who Pays Realtor Fees?
Buyers are typically not responsible for paying realtor fees. In most cases, commissions are included in the seller’s closing costs. A portion of the sale is earned by the agents involved in the transaction. Though sellers are most often on the hook for realtor fees, buyers are responsible for several expenses, such as their down payment, potential earnest money, and their own closing costs.
What Do Commissions Cover?
Agent fees are paid for services rendered, like assisting the buyer in finding a home to purchase, scheduling showings and walkthroughs, and processing and handling paperwork. The total commission, between five and six percent of the sales price, is usually split evenly between the seller and buyer’s agents, giving each agent 2.5 to 3%. For example, if the property sells for $600,000, the real estate agent commission of 6% would be $36,000, and each agent would receive $18,000.
In some rare situations, the agent might represent both the seller and the buyer. This is called dual agency and is illegal in some states (Florida, Colorado, and Kansas). The agent would collect the entire 6% commission. As you can imagine, agents are a lot more motivated to show houses to their clients and work towards closing the deal if there’s a commission at the end.
Closing Costs vs. Realtor Fees
Closing costs differ from agent fees that are paid at closing. The amount of closing costs varies greatly with each home sale or purchase and ranges from 2% to 7% of the sale price of the house. In most situations, though, closing costs are close to 3.5%. For example, if a house sold for $600,000 and the closing costs were 5%, closing costs would be $30,000. Some things closing costs can cover including:
- Title company fees
- Loan processing fees
- Mortgage Insurance
- Surveyor costs, if necessary
- Real estate deed recording
- and Homeowner’s association fees
Contact Utah Sell Now
Don’t want to pay commissions? One of the best ways to avoid paying realtor fees is to sell your Salt Lake City, Utah, home to Utah Sell Now.
Convenience is what we strive for, so there are no commissions, fees, repair costs, or waiting. We want to buy your house as-is for cash. We can even close in as little as one week since we do not require financing. Our helpful and knowledgeable staff will work on your terms, so you can sit back and wait for your check. Contact Utah Sell Now to get your all-cash offer today.