Real estate agents aren’t cheap. Usually, when you sell your house and hire an agent, they’ll charge a 6% commission fee on the home’s sale. That doesn’t seem like a lot, right? It’s only 6%! Well, if you sell your home for, say, $300,000, is your Realtor going to pocket $18,000 of that? Additionally, the more your home sells for, the more that 6% is worth. It’s almost a wonder that more people aren’t going the “for sale by owner” route. Of course, there are quite a few reasons why a good real estate agent is a necessary investment. Additionally, that 6% commission rate that keeps popping up is more complicated than you think. So, is an agent really worth the price? Read this to find out.
First Off, Let’s Break Down that Commission
When most people are confronted with the decision of having to pay 6% of their home’s sale to their agent, they’re thinking, “wow, that’s a lot of money.” But the reality of the situation is that people don’t have all of the information about an agent’s commission. To start, the Realtor selling your home is likely only pocketing a fraction of that percentage. They usually split the profit 50/50 with the buyer’s agent. While this might still seem like a pretty good deal, you’ll also want to factor in that real estate agents are subject to paying out their broker, which can sometimes be up 50% of the agent’s profit after splitting it with the buyer’s agent. Then, that agent needs to pay membership fees to organizations like NAR and MLS, which can be pricey.
At the end of the day, the agent isn’t taking home nearly as much money as you might think.
Is it Always 6%?
This commission rate isn’t set in stone, and varies per area as it’s not regulated. If you’re thinking about negotiating for a lower rate, think about the point above. At the end of the day, the agent uses a fraction of that 6% towards resources needed to sell your home. Without all of those resources, your home could potentially be sold for a lower price. This could cost you more money after all is said and done than had you kept the standard commission price.
How Much Work is the Agent Doing?
In short: a lot. You might only see your agent in action a handful of times during the home selling process, but behind the scenes, they’re working their magic. From handling phone calls, to coordinating showings, to negotiating contracts, to referencing home affordability calculators regularly; the list goes on! Real estate agents are a jack of all trades, and are an invaluable resource to people who want to sell their house quickly and for the best price possible.
Is a Realtor Actually Worth the Cost?
Unless you absolutely have the time, resources, and knowledgebase to sell your home on your own, then going the route of a real estate agent is going to be very beneficial. By finding a trustworthy Realtor, you are putting your home’s sale in good hands. The more that they are able to sell your house for, the more that both you and them will be able to take home at the end of the day.