How much is an agent’s commission?
While we encourage you to sell by owner, the truth is, once you start advertising your property for sale the local real estate agents will contact you. In every state you have the right to sell your property without the help of an agent, it is your choice to use an agent. There are different ways to use an agent. You can agree to let them show your property to just one person or you can let them put you into the MLS and let all agents know you are willing to pay a commission. What commission you pay is up to you, not the agent. By state law it is negotiable. The agents may tell you “in this area we all get ____ % for selling a property”. This statement is highly unethical and could be considered a Federal Crime under the Sherman Antitrust Act of 1890. You see, Price Fixing is illegal. When you go to work each day, are you aware of how much you will earn that day for doing your job? And at the end of the day are you aware of exactly how much is owed to you? Agents are no different. Before they bring a buyer to look at your house they want to know exactly what is your selling price and what they will be paid. Otherwise they will not show up. Would you show up for work, did your job and then at the end of the day your boss says “I’ll let you know on payday what you will receive”. So, you will need to confirm in writing and upfront the commission or compensation you will pay at closing. As a reference, you might want to look at the closing statement when you bought the house to see how much agents have received in the past. Also, very important, the agent you are dealing with works for a registered and licensed Real Estate Broker. At closing, it is the Real Estate Broker that receives the commission and they are the ones actually paying the agent. The amount of money the agent receives is strictly between them and their broker. Do not pay anything directly to the agent. Commissions are paid at closing. For the past 10 years, using a Flat Fee agent has been to most cost effective way to use an agent to sell your property.