What Jo Knows: How Much Commission Does An Agent Charge?
How to Choose a Real Estate Agent: Understanding Commissions and What to Look For
When selling your property, one crucial question arises: Should commission influence how you choose your real estate agent? Understanding what commission is and how it works is key to making an informed decision.
What is Commission?
Commission is the agreed payment an agent receives for successfully selling your property. It's their reward for achieving an outcome you're satisfied with—an unconditional sale at a price, and with terms, that you’ve signed off on.
The Vital Question: Agent Selection
When considering an agent, imagine all agents charged the same commission. Who would you choose then? That reframing helps you focus on what matters most beyond just the percentage. Often, people get stuck on the numbers, but it’s important to look at the overall value an agent brings.
Commission Rates: The Nuts and Bolts
Real estate commissions typically range from 1.5% to 3.5% of the final sale price. These rates can vary based on several factors:
- Experience: Less experienced agents may charge a lower rate to attract clients and build their portfolio.
- Sale Price: Higher property values tend to command a lower commission percentage because the total commission amount is larger.
It’s not just about the percentage; it’s about understanding what that translates to in dollar terms. For instance, 1.5% might seem low, but on a $1.5 million sale, that adds up. It's crucial to calculate how much you’ll walk away with after the commission is deducted.
What to Consider Beyond the Commission Rate
While the commission rate is important, focus on what the agent is offering for that fee. Key questions to ask include:
- Will the agent personally attend every open home, or will a second agent assist?
- Do they have a team working with them?
- Do they assist with preparing the property for sale, including staging or other services?
- Are there upfront costs the agent covers until the sale goes through?
Lastly, if the percentage-based commission doesn’t suit your preference, you can always ask about a flat fee option.
Conclusion
Choosing the right real estate agent involves more than just focusing on commission rates. Consider the value and services the agent brings to the table, and always understand how much you’ll walk away with after the sale. The right agent will offer a balance of expertise, support, and fair compensation that works for both parties.