Have you ever wondered how real estate agents make money? If you do not understand this when buying a house, you might suspect that you will have an extra fee when hiring an agent. Well, the good news is that you, the buyer, do not have to pay an extra fee for this service. It is the home seller that pays this. So, if you are selling a house, you should expect to pay this fee.
Why people use agents
Did you know that 89% of people who buy and sell homes use a real estate agent? This is a high number, and there are reasons for this. As a buyer, you can have an expert in the real estate industry helping you without paying a dime for it. If you do not buy a house, you pay nothing. If you do buy a house, you have a lot of expenses for the house, including the down payment and closing costs, but you are not actually paying a commission out of your pocket.
The seller pays the commission
The person that is selling the house is the one who actually has to pay for the commissions for the sale. This is one of the reasons that sellers will up their asking prices, as they must pay the commission. The rate is often around 6%, but it might be more or less. A 6% rate would cost a seller $6,000 for a $100,000 house or $12,000 for a $200,000 house. As you can see, this is a hefty amount, but it can be almost impossible to find a buyer without hiring an agent.
The commission is divided
The other thing to understand is that the agent who helps you buy a house gets paid from the commission paid by the seller of the house, but your agent will not receive the full commission. The commission is always split between the agent who listed the house, the agent who sold the house, and the agencies that both agents work for. Therefore, your agent will likely only receive a portion of the full amount of commission paid by the seller of the house.
You should also understand that the agent you hire for help will not receive a cut from the commission unless you buy a house and close on it. So, if you are planning on using an agent, you should make sure you are serious about buying a house.
For more information about buying or selling a home, contact companies such as Joel Robertson: Robertson Real Estate.