Real Estate Agent Commission: Who Pays The Bill?

If you are thinking about buying or selling a home, you may be concerned about the many costs that are invariably involved in this process.

Aside from the expenses of the move itself, the dreaded specter of the agent’s commission could hang over the entire deal, especially if this is your first time going through with a property sale.

So who is responsible for paying the agent’s commission and is this something you need to worry about in your specific circumstances?

Responsible party

It is standard practice for sellers to accommodate not only the commission paid to the agent with whom they list their property, but also the commission of the agent whose services are secured by the buyers as well.

This might seem like it places an unfair financial burden on just one party involved, but of course because this is a well established trend it is also something which sellers typically factor into the asking price of their home in the first place. This means that buyers are arguably paying for the commission, albeit indirectly.

Commission percentages

Thanks to the capabilities of modern solutions, like the Paperless Pipeline commission tracking software, it is simple to break down commission costs for real estate agents at the start of the sales process, rather than leaving this up in the air until further down the line.

Again there are regional variations in how much agents will ask for as their commission payout, but in general you can expect this to fall in the 5 to 6 percent bracket. Furthermore this percentage represents the total commission that will be payable to agents for both buyers and sellers, meaning that each will receive around 2.5 to 3 percent of the total sale value.

Scheduling & negotiation

Another aspect of real estate agent commission payments that you should keep in mind is that this fee is only payable once the deal is closed. If a deal does not go through, the seller may not be liable for this fee, although this will depend on the agreement that they have committed to with the agent in the first place.

One instance in which the seller will be liable for a commission payment even if the deal is not closed is if they pull out at the last minute, so remember to read the small print carefully to avoid getting burned.

In some cases you may be able to negotiate a lower commission fee with your agent, so it never hurts to try and get a discount, or request certain perks, particularly if you are selling at a time when there is plenty of demand for property in your area.

Buying or selling a house is proven to be one of the most anxiety-inducing experiences in life, so preparing yourself by understanding your roles and responsibilities, especially when it comes to agents’ fees and commission, will help you to limit the stress as much as possible.