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Who is typically responsible for paying the real estate agent's commission when buying a house: the buyer or the seller?
Real estate agent commission is negotiable and not set by law.
The commission is typically a percentage of the sale price, usually ranging from 2% to 3%.
Split of commission: The listing agent and the buyer's agent usually split the commission, with each agent receiving around half.
Commission paid by the buyer: Technically, the buyer pays the commission through the final sale price, which is increased to include the agent's commission.
The seller can, in some cases, negotiate a lower commission or ask the buyer to cover more of the commission.
The commission is part of the closing costs and is paid at the time of closing.
In most cases, the seller agrees to pay the commission as part of the listing agreement with their real estate agent.
There is no universal standard for the real estate agent commission, as it may vary based on the location and market conditions.
Commission costs are usually built into the property price and are not an additional cost for the buyer.
In rare cases, the buyer and seller might negotiate a deal where the buyer directly pays the buyer's agent's commission.
The commission isn't just for showings or open houses, but it also covers the agent's time, effort, and expertise throughout the transaction process.
Some discount real estate brokerages offer lower commissions for both the seller and the buyer, but these services may come with limitations or reduced support.
The commission structure is often open to negotiation, and the agents' experience, expertise, and local market conditions can influence the final agreed-upon percentage.
Real estate agent commission rates may fluctuate based on the real estate market, economic conditions, and the services offered by the agents.
It's important to review and understand the commission agreement before signing the listing agreement or purchase contract.
The commission system encourages real estate agents to work harder, as their pay increases with the sale price of the property.
Real estate agents are usually not salaried and make their living primarily from commissions, making it important to efficiently manage their time and resources.
The total commission paid in a real estate transaction is typically higher than in other industries due to the complexities of property transactions and the services provided by agents.
Real estate agents' commissions are typically an investment for sellers, as a successful and well-executed sales process can lead to a higher final sale price.
In some cases, a buyer's agent may agree to a reduced commission if the buyer is willing to forgo some of the agent's services, such as assistance with negotiations or inspections.
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