How much is the commission?
In residential purchase/sale transactions the standard is 6% of the sale value of the property, which is divided into 3% for each of the agents involved in the transaction (the representative of the buyer and the seller).
In residential rental transactions the standard is 10% of the annual contract value or one month’s rent. This commission is divided equally for each of the agents participating in the transaction.
Who pays the commission?
The owner of the property is always responsible for paying the commission, both in the case of sale and rental.
Do you know how the real estate advisor is compensated?
Real estate advisors are not paid by the hour or by completion of work performed, they only charge if the formalization (closing) is achieved. An agent can spend days or months working with a buyer or seller and if the transaction is not completed they are not compensated for their time.
Where is the amount of the commission stipulated?
It is stipulated in the agreement to promote the property (listing agreement). This agreement stipulates the percentage of commission that the agent will receive at the closing of the transaction and the percentage that will be paid to the agent representing the buyer/tenant. This percentage is published in the multiple listing system (MLS) along with the other property data, this way agents are aware of how much their fees will be at closing time.
The support and advice of a real estate professional accounts for every dollar of the commission. No matter if you are selling or buying a property, be sure to work with a real estate agent who has the knowledge, experience and equipment necessary to provide you with the advice you need.
Does the buyer pay commission?
The home buyer in the vast majority of cases does not pay any type of commission to the real estate agent.
As a seller, can I 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 (known as For Sale By Owner) with the sole purpose of saving six percent (6%) of the commission.
However, it is important to take into account:
- According to national statistics, the price achieved by the “For Sale By Owner” is 19% lower than what a real estate advisor can achieve. If 6% of the commission is subtracted from that 19%, the owner would achieve at least 13% more if he had the professional services of a real estate agent.
- Cost of printed advertising (flyers, brochures, open-houses),
- Sales price estimation and market monitoring
- Selection of potential buyers
- Coordination of visits
- Legal implications as a seller
- Security and time that prevents you from possible stressful and risky situations for yourself and your family group.
Taking into consideration that the decision to carry out a real estate transaction is one of the most important in a person’s life, this is why we recommend that you make sure to hire a professional, a real estate agent who has a capable team. to provide you with the legal, financial, inheritance and tax advice that you need.
