If you’ve just sold a property through an agent, or are planning to sell one in the near future, then keep in mind that you have to pay a commission to the agent as well. Usually, it’s the home seller who pays the commission, and the commission is equally split between the agents of buyer and seller.
Here are some points on how you can calculate your real estate commissions. This will make life easy for a lot of homeowners looking to sell their house.
Know The Normal Commission Amounts
Whenever you buy or sell a house, the broker selling or buying it (for you) receives a fixed percentage of the selling price as his commission. This is basically their fees for helping you buy or sell your house. This percentage usually fluctuates between 5% to 7%. You can contact you broker to find out how much they change before starting the buying or selling process.
You can also easily use an online calculator to calculate the commission on a real estate deal.
Discuss The Commissions Beforehand
Some brokers keep changing their fees depending on the value of the house they’re selling, while other charge a fixed percentage per house purchase or sale.
So, no matter what the fees or commission of your broker might be, you should always discuss it with them and get everything in writing to avoid confusion later on. Do all the calculations before making any financial transactions.
Know How Brokers Split Commissions
As a rule of thumb, the seller’s and buyer’s brokers split up the commission cost 50/50. Keep in mind that if buy the house directly and don’t hire a broker, the seller’s broker will get all the commission. Commission fee can also be negotiated between the buyer and seller.