If you are in the market to buy or sell a real estate property and a middle man is involved in helping you to sell the property, then that kind of transaction involves a realtor Commission. In this transaction the middle man is called the real estate agent and the commission you provide to him is called the realtor commission.
Before you enter into any real estate transaction you must know the real estate commission percentage in that particular transaction. This will help you prevent a lot of issues in the future. In some areas, the real estate Commission may be very high when compared to what it is in your country. So it is always advisable for you to be very clear with your real estate agent or realtor company about the percentage of real estate commission they charge.
What is the Commission Percentage?
The real estate brokerage firm usually enters into an agreement with the buyer and seller to receive a portion of the sale as commission after the completion of the transaction. You need not pay anything to them until the transaction is complete.
Real estate agents are not paid a salary similar to other businesses, instead, their entire income of them is the final commission they get after closing a particular transaction. The commission that a real estate agent gets is between 5 to 6 percent of the entire transaction.
This 6 percentage commission does not go to a single real estate agent unless the real estate agent for both the buying and selling party is the same. Usually, buyers pay a 3 % commission to the real estate agent who introduced the property to them, and similarly, the seller pays a 2.5 to 3 % commission to the real estate agent who introduced the property to him. So the final Commission would be 6% only if the real estate agent for both sides is the same company or person.
There are buyers and sellers who do not seek the help of real estate agents during the transaction but having a real estate agent by your side has a lot of benefits. The real estate agent you hire can save you from a lot of common market pitfalls and will also help you to close that deal much faster than what you will do if you choose to avoid a real estate agent.
Do You Need To Pay Commission If Your Home Doesn’t Sell
No real estate agents are paid only for the results they bring in. If they are unable to sell your home, then you are not entitled to pay any amount as commission to them. They must be able to sell your real estate property within 90 to 120 days of you finding an agreement with them. If they are unable to sell your property in that period you are not entitled to pay them any commission.
If they find a buyer before the time period expires, but the transaction takes place after the time period then still you are entitled to pay them their full Commission.
