Real estate commission is the amount of money that a real estate agent or broker
earns on a home sale. The commission rate is typically negotiated between the
agent and client upfront. Most agents charge a flat fee of 4%-6% of the sales price,
but the specific rate is usually up to the client to decide on. In some cases, the
buyer’s agent may also choose to take a reduced commission rate. For example,
some national discount brokerages like Redfin pay their agents salaries instead of
requiring them to split the commission with the broker.
While the commission structure is standard across most of the country, it can be
confusing for home buyers and sellers. This is especially true in New York, where the
real estate market is among the most competitive and expensive in the country.
In NYC, real estate agent commissions are generally in the range of 5%. The exact
commission percentage is negotiated between the agent and client, and is detailed
in the initial contract. For a $250,000 sale, a full-service listing agent would typically
receive around a $10,000 check once the transaction is complete.
However, that $10,000 is rarely the agent’s to keep. Most of the money will go
towards the cost of selling the property, including professional photography, staging,
open houses, online and offline marketing, negotiating with clients, and facilitating
the sale from contract to closing. In addition, many real estate agents will also pay
for their own personal expenses from the commission. Also read https://www.prestigehomebuyers.co/
As an independent contractor, most agents will also have to pay taxes on their
commission income. This means that even a $10,000 check will only end up being
worth about $6,000. It’s important for any aspiring real estate agents to understand
this before they decide to start working in the industry.
Additionally, some real estate agents will offer a discount on their commission rates
in exchange for repeat business from sellers. This is a great incentive for sellers, and
it can also be a good way for buyers to save on commissions by using the same real
estate agent as they purchase their next home.
The answer to the question of “How much is real estate commission?” depends on
many factors, including location and the specifics of each transaction. Real estate
agents and brokers work hard to ensure that their clients are happy, but it is
ultimately up to the home seller to negotiate the commission rate they are
comfortable paying.
If you’re ready to sell your home in NYC, Hauseit’s interactive closing cost calculator
can help you estimate your seller’s closing costs. And if you’re a home seller, don’t
forget to ask your prospective agent about their commission rates and any other
fees they may have to add on.
