Who pays the real estate agent’s commission when you buy or sell a home in Arizona?
Buying or selling a home is a complicated process and can be stressful, especially for first time home buyer or home seller. An experienced real estate agent can guide you through the process and ensure the transaction go through smoothly. In exchange of their hard work and knowledge, real estate agent earn commission as closing. Read on who pay real estate commission when you buy or sell a home in Arizona.
What is real estate commissions?
Most real estate agent are independent contractor or self-employed. Real estate agents are not salary paid and do not get paid every two weeks. Most real estate agents earn money only when a real estate deal goes through. In short, real estate commissions are compensation paid to real estate agent for selling your home.
How real estate commissions work?
Real estate agents work for a real estate broker. All commissions and fees paid to a real estate agent must first pay through their broker. After the broker split, then the broker will pay their agent.
How much is real estate commissions?
Typically, real estate commission is 5% to 6% of the home’s sale price. In most areas the buyer’s agent receives 2.5% to 3% in commission and the seller’s agent receives 2.5% to 3% in commission.
Who pays the commission?
Generally, the home seller pays the commission for the services of both their own listing agent and the buyer’s agent (if buyer has one). Buyer’s and seller’s agents typically split the commission. So if a home sells for $200,000 at a 6% commission, the seller’s agent and buyer’s agent might split that $12,000, and each receive $6,000.
Can you negotiate commission fees?
A seller can negotiate the terms of the listing agreement, which contains the real estate agent fees. Some agents will lower their commission fees, particularly if they are representing both the buyer and the seller in the same transaction, also known as dual agency.
Do you have to pay commission if your home doesn’t sell?
Probably not. Real estate agents are paid when you sell your home, so if your home doesn’t sell, you shouldn’t owe them a commission. However, there may be some exceptions, for example, seller back out of the sale or break the listing agreement. Check and read the fine print inside listing agreement.
What else do I need to know about commissions?
All of the details about a real estate agent’s commission and any transaction fees the agent charges should be outlined in listing agreement. This contract will also specifies how long the agent will represent you.
Bottom line
Since seller is the one paying, it is imperative that the seller do their due diligence when hiring an agent. Spend some time and interview multiple real estate agents. Find one that fits your specific needs and, ideally, one that has a personality that you can work with and feel comfortable with. Read all contracts carefully, make sure everything in writing, especially for the largest transaction in your life.
Selling your home in Phoenix AZ
Contact Us or call Swee Ng at 480.721.6253 today to discuss your potential Phoenix House Value and our comprehensive marketing plan. We will prepare complimentary competitive market analysis (CMA) to find out what your home is worth at today’s market.
Swee Ng, Realtor and Phoenix East Valley resident specializing in win-win real estate transaction through great communication and fighting for his clients’ best interest. After all, this is more than real estates, this is about your life and your dreams.
If you are looking to buy or sell your home in Phoenix AZ and surrounding area, we hope you will consider us. Contact us today for complimentary consultation.
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