How much do we pay our realtor?
We found a home on MLS – our realtor met with us and showed us the home. We made an offer through him. If they accept our offer how much commission do we pay our Florida realtor?
The commission is stipulated on the listing. Your Realtor will be paid through the transaction. Although, if you agreed to pay your Realtor a specified percentage of the Purchase price, then you will be paying that.
By the way, the buyer pays the commissions for the total Real Estate sale. Shocked? You shouldn’t be. Here is why:
Let’s say you are not buying a home, but a simple thing, like a $50.00 shirt at Nordstrom’s
Does Nordstrom’s keep the $50 as profit? The answer is no
A simple breakdown:
$50
-minus the $20. For the shirt manufacturer
-minus the $10. For shipping and handling
-minus the $ 5. For the lease of the building that Nordstrom’s leases
-minus the $ 5. For the wages for the account executive
-minus the $ 5. For the advertising of the sale that invited you to the store.
Which leaves $ 5. For Nordstrom’s
All of it being paid when the buyer swipes their credit card to pay for it. The buyer pays it all
Now, when you buy a home, guess what, the buyer pays for everything as well.
The Home is listed at an asking price of $500,000. When an offer is accepted from a buyer, there are all these fees that are incorporated in buying a home that get paid when the Buyer signs their loan docs.
6% goes to the Realtors
2% goes to Title and Escrow
2% goes to taxes and insurance impounds
The rest goes to the sellers
You will see this all broken down in your HUD-1 Statement that is included in your loan documents.
So, you will ask why is the commissions are on the seller’s side of the HUD-1, it’s because, the buyer is financing the commissions through the loan. Is it true, that if the buyer had the 6% for the commissions, the buyer can pay that up-front and, reduce 6% off the purchase price, and have lower property taxes because of the lower purchase price? The answer is true. So it is true that the Buyer does indeed pay the commission.
So, congrats buyers, you have made your biggest Retail purchase. Don’t fret because when you sell your home, you’ll have a buyer pay the commissions.
February 7th, 2010 at 1:06 am
usually the seller pays the commission to his realtor who then splits it with your realtor
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February 7th, 2010 at 1:44 am
I think the seller pays the realtors. The buyer doesn’t.
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February 7th, 2010 at 2:12 am
The seller pays the commision out of YOUR buy money, so you don’t have to worry about it. However your agent should’ve explained the commission agreement to you befoer you made an offer.
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February 7th, 2010 at 2:43 am
I have known people to give their realtor an added bonus for doing a fantastic job. Typical transactions are 6 bases points (6%) which is paid buy the seller of the home. That percentage can be negotiated by the seller with his/her agent. That % will directly affect how much your agent could/will get paid…but the fee can vary from state to state. Generally, the fee is split down the middle though. That doesn’t mean that you can’t also give your agent additional money as a bonus.
References :
February 7th, 2010 at 3:20 am
The commission is stipulated on the listing. Your Realtor will be paid through the transaction. Although, if you agreed to pay your Realtor a specified percentage of the Purchase price, then you will be paying that.
By the way, the buyer pays the commissions for the total Real Estate sale. Shocked? You shouldn’t be. Here is why:
Let’s say you are not buying a home, but a simple thing, like a $50.00 shirt at Nordstrom’s
Does Nordstrom’s keep the $50 as profit? The answer is no
A simple breakdown:
$50
-minus the $20. For the shirt manufacturer
-minus the $10. For shipping and handling
-minus the $ 5. For the lease of the building that Nordstrom’s leases
-minus the $ 5. For the wages for the account executive
-minus the $ 5. For the advertising of the sale that invited you to the store.
Which leaves $ 5. For Nordstrom’s
All of it being paid when the buyer swipes their credit card to pay for it. The buyer pays it all
Now, when you buy a home, guess what, the buyer pays for everything as well.
The Home is listed at an asking price of $500,000. When an offer is accepted from a buyer, there are all these fees that are incorporated in buying a home that get paid when the Buyer signs their loan docs.
6% goes to the Realtors
2% goes to Title and Escrow
2% goes to taxes and insurance impounds
The rest goes to the sellers
You will see this all broken down in your HUD-1 Statement that is included in your loan documents.
So, you will ask why is the commissions are on the seller’s side of the HUD-1, it’s because, the buyer is financing the commissions through the loan. Is it true, that if the buyer had the 6% for the commissions, the buyer can pay that up-front and, reduce 6% off the purchase price, and have lower property taxes because of the lower purchase price? The answer is true. So it is true that the Buyer does indeed pay the commission.
So, congrats buyers, you have made your biggest Retail purchase. Don’t fret because when you sell your home, you’ll have a buyer pay the commissions.
References :