When selling your house, you want to do everything possible to avoid making costly mistakes to include paying high commissions. Although you have the option of selling on your own, most people prefer to pay real estate commission to avoid the hassle of researching, advertising, marketing, showing, dealing with potential buyers, writing up contracts, and so on.
If you plan to sell your home and you want to use the services of a real estate agent, it is important that you work with a qualified and honest real estate agent who can provide all the necessary services while also not charging you a fortune in commission. Typically, real estate agents will charge 6% off the sale of the home. In other words, if you have the house on the market and sell for $200,000, the commission earned by the agent would be $12,000 but again, he or she provided tremendous time and effort for that money.
Sometimes, a family member or friend who sells homes may offer a discount of 4% to 5% commission but again, they are working very hard for you to sell your home quickly and at a good price. In most cases, licensed real estate agents are hard-working, honest individuals who want you to sell. Remember, the agent earns his or her living by selling homes so they are professional and there to provide guidance or answer questions throughout the selling process. Unfortunately, you will find some agents that do little while charging an outrageous commission rate.
Before you lock into any contract or agreement with a real estate agent, you always want to make sure you understand the commission being charged and that you have that written in a signed contract. That way, there are no disputes. Now, another consideration for an agent’s commission is if you plan to do a “For Sale by Owner” or FSBO. In this case, while you would not actually be using the agent’s services, you might have someone to help with various situations, thus you would be charged some type of commission.
Typically, as long as you work with a reputable agent and the two of you have a firm agreement in writing, you would be fine. Finally, there are times when a real estate agent would lower the commission rate due to unusual circumstances. For instance, if your parents passed away and you had to sell their home, trying to handle all the transactions from out of state, the agent may agree to take a lower cut. Although this would not be guaranteed, it never hurts to ask if the commission rate can be reduced.