Is it a big enough market for you to reach your financial goals? How many homes sell each month? How many agents will you be competing with? Those factors will all influence your real estate agent salary. What other factors will affect your real estate income? According to the Bureau of Labor Statistics , agents in large metropolitan areas make higher salaries. This is in part due to the number of homes that sell each year.
On the other hand, agents in small communities can do very well if they specialize in high-end real estate sales. Many or all of the products featured here are from our partners who compensate us.
This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money. Real estate agents make money from commissions on home sales. Understanding how your agent is paid is an important part of the home buying and selling process. Usually, the seller pays the agent commission as part of their closing costs when the sale is final. The listing agent typically splits the commission with the buyer's real estate agent.
Although the buyer doesn't directly pay for their agent's services, commissions impact how much homes cost. Sellers may build in the cost of agent commissions when pricing their homes. Let's say your house is on the low end of the price range for homes, there's lots of competition, and your home is not in the best shape and probably won't show as well as other homes.
In other words, this will not be a particularly easy or lucrative deal for an agent. But if your home is on the high end of the price range, there is little competition for a home like yours in the real estate market for the area, and your home is in pristine condition, this will likely be an easy and lucrative sale. If you're a real estate investor, you also might be able to negotiate a lower percentage rate from your agent if you do repeat business with them.
Technically, the seller pays the full agent commission. The seller's agent then usually splits the commission with the buyer's agent. There are other splits regarding commissions. This depends on the agent and their brokerage. For example, there could be several players on any one deal who all get a piece of that commission: the listing agent, the listing agent's brokerage, the buyer's agent, and the buyer's agent's brokerage.
Real estate agents work for real estate brokers. It is only the broker who is paid, and the real estate broker often takes a cut before paying their agents. Because home sellers normally pay the agent commission, they often try to recoup that cost. Some sellers tack the agent's fee onto the sale price of their home.
If that is the case with a home you're buying, then you, in essence, are paying the agent's fee in the form of a more expensive house.
A dual agency exists when one agent is representing both the seller and the buyer. Two agents from the same brokerage are sometimes considered dual agents and sometimes are not, depending on the state. In the case of dual agency, the real estate brokerage keeps the entire commission.
There is a problem with dual agency. Realistically, it's difficult for one person to represent the best interests of two opposing parties. Real estate agents hold a fiduciary duty to their clients, meaning they must represent the best interest of their client, so an agent who represents both sides will most likely not be able to do this.
For this reason, some states don't allow dual agency. States that allow this practice typically require the agent to disclose the dual agency nature of the deal and get both parties to agree to this in writing.
An advantage of a dual agency situation is that the seller has some room for negotiation regarding the agent fee since the agent doesn't need to split the commission. There are discounted ways to sell your home that you might wish to consider. Verify your new rate Nov 12th, How Soon Can I Refinance? How Often Can I Refinance?
It Is Worth Refinancing For 0. Talk to a Lender: How much do real estate agents make? And who pays? Erik J. Martin The Mortgage Reports contributor. June 29, - 8 min read. How much do Realtors and real estate agents make? Since commissions can be high, it makes sense to shop around for your real estate agent. Start your new mortgage Nov 12th, In this article Skip to… Real estate agent salaries Who pays the agent?
How commissions are set Dual agencies What do real estate agents do?
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