So you’ve decided to sell your home. You went out and found the best realtor you could find. As you are going through all the legal gobbledygook, you come upon the section addressing the realtor’s commission. Now this sounds interesting.
But you lead such a busy life that you have no time to decipher the legal jargon that describes the boundaries and rules of realtor commission fees. Too bad, really, that the attorney who drew up this document didn’t simplify it according to your time constraints… because you really need to know what it says.
I am a bit more sensitive to your busy schedule, so let me break down the complexities of realtor commission fees.
*First of all, there is a customary percentage that realtors expect to make–usually six or seven percent of the sale. However, did you know that this amount is negotiable? You may have assumed that this fee is set in stone, but it is as liquid as your property will be after the sale.
*The advent of the web changed many things, including the way some real estate agents decide their commission rate. Many agents are offering “cut-rate” commissions, but they’re usually tied to a lower level of service.
*If all you want is to be listed with the multiple listing service and have a sign in your front yard, then you may want to go with the “cut-rate” commission. If you want an agent to go out and actively find buyers for your property and spend money on advertising, then you should not go with the reduced commission.
*Some agents offer lower commissions if other services are tied into the agreement, such as using a specific lender, escrow, settlement, or title company. The broker often has some kind of tie-in with these services. The problem is that these services and products may not be as competitive in their pricing as others.
*Reduced commissions are sometimes contingent upon whether you buy your next home through the same agent. The savings do not come with the property you are currently selling. Ads for these reduced commissions are often unclear.
Confusion as to whether your agent has earned his or her money may arise in certain circumstances. Normally, if the agent brings a buyer and the sale closes, they get their commission. If the buyer proves unable or unwilling to close the sale, the house goes back on the market and the realtor begins the process again. However, if the seller backs out or does not accept an offer that meets with the listing agreements, the listing broker has still earned the commission. They may want to be paid even though they didn’t sell your home.
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