Many people ask, “How much do real estate agents make per sale?” and the answer is not always straightforward. In some instances a listing agent makes a huge profit but in others a buyer’s agent may earn a small profit. In some cases the agent and/or buyer will make a small commission on each house sold. And in other cases, one agent will have an exclusive contract with a seller offering the highest real estate commission rate.
What is a Real Estate Commission Fee?
Realtors make a minimum commission on each sale and the actual amount you pay them depends on the type of real estate transaction you are completing. For example, selling an existing property requires a greater amount than when selling a new property. A real estate commission fee is the portion of the real estate transaction that is paid by the seller, referred to as a “finder’s fee.” This fee is traditionally paid by the first time home buyer, but some real estate brokers are now including this fee in packages designed for new homebuyers. One way to minimize your commission is to list your property ads for sale by owner and use a real estate agent who specializes in this type of transaction. Another way to save money is to list your property with a real estate agent who has signed a contract to sell the house rather than listing it on his own. A real estate agent will be able to negotiate the best deal for you.
What Does “Flat Commission” Mean?
A low or flat commission means the real estate agent makes a fixed percentage of the entire sale price of a house after expenses. In most cases, this percentage is around 2 percent. However, many times this fee is just a few dollars and in some cases can be as much as one hundred dollars. Some real estate agents will take a set fee, while others may charge a flat commission. However, most of the time, a flat commission only applies to larger real estate deals like townhouses and houses.
What is the Purpose of Real Estate Commission Fees?
The purpose of this fee is to assure the buyer that their agent has taken care of finding a good home for them. Often, buyers have to search high and low before they find a real estate agent that they feel comfortable with. After all, the home purchase process is nerve-wracking and should be given the attention it deserves. By paying a flat or low commission upfront, the real estate agent is showing confidence in the buyer’s ability to pay for the home price, which means the buyer is more likely to feel comfortable buying the home.
Real Estate Commission Through Listing Properties
One area of real estate where agents make big money is through listing their properties for sale per direct realty listing. Listing your home as for sale by owner can save you money per square foot because the listing is free. Plus, it provides exposure to multiple buyers. Because the agent receives a fixed commission per sale, they can set your listing price in a way that allows them to maximize their profit.
The real estate market is a competitive business. The value of your home is determined by many factors including location, condition, and the trends in the real estate market. If you are planning to move, you need to be aware of what your new house will fetch when compared to other homes in the neighborhood. This is known as comparative real estate valuation. Listing your home for sale by owner will allow you to make the most out of your real estate investment.