Paying Commission to Real Estate Agents
Bear this in mind that on either selling or buying a home, an individual should be aware of paying commission to real estate agents. That is, percentage rate of commission to be paid, proper channel of paying the commission, getting legal documents related to commission payable etc.
Most of the times, commissions will be paid to real estate agents by sellers, especially in case of a dual agency. A Dual agency is nothing but both buyer and seller will have the same real estate agent. Also, if there are different agents for the seller and the buyer, then both individuals have to pay commission to their own respective agents.
Percentage of Commission to be paid to an agent
Percentage of Commission may vary from country to country according to its economy. General idea on commission rate is 2% to 5% of selling price. Many customers do not have proper awareness on commission rates. In such circumstances, it is advisable to know the market rates for selling or buying a property from the concerned government regulatory offices in the locality.
By law, commission rates are to be negotiated to avoid Price fixing so that your money will be saved. Here are some tips to calculate and pay commission:
Keep your property that is going to be sold in good condition because the faster you sell, commission rates will become lesser.
If you are a buyer, it is a bit difficult to expect less commission rates but one should be aware of knowing exact commission rates prevailing in the market.
It is good to sign an agreement, if you are going with variable commission rates. That is when both the buyer and seller deal with one real estate agent.
Find an agent from a large, well-established and well-known franchisee company to negotiate their commission, and then search online for a broker offering discount in your area.
You must also be aware of the payment schedule as well as the payment options of the real estate agents. Normally, the fee ranges from 2 to 6 percent in case of flat fee or in case of dual fees.
In some circumstances, Real estate agents will take customers who are sellers of highly priced properties. Because it is profitable to these agents, if business is done by taking these types of customers. They earn more commission rate instead of normal market rate. If it is going to be dual agency, this method is less profitable.