Real Estate Agent Commissions: Understanding the Truth

Real Estate Agent Commissions - Understanding the Truth

Whether you want to sell your house now or in the future, you should ask some questions before moving ahead. How much does it cost to take a property off the market? What are the expenses for repairs and renovations? How much do you need to pay a real estate agent as their commission? 

The answers to these questions will tell you if the home sale will be profitable or not. Based on this, you can list your home on the market. 

Once you learn about the intricacies of home selling, you will know that there are several expenses involved in the traditional route. It is also a slow and lengthy process. 

So, if your priority is a quick and stress-free sale, hire cash home buyers in Michigan like Detroit Cash For Homes. 

On the other hand, if you think working with a realtor is a better option, you should be ready to pay 3-6% in commissions. How much will you pay exactly? It will depend on your real estate agent. Before you dive into the home selling process, here is everything you need to know about a realtor’s commission. 

  • Are commission rates negotiable? 

The answer is yes. You can negotiate realtor commissions unless you are in a country that has a regulated and fixed commission rate. You do not have to hire a realtor until they agree to the desired price. For example, if a real estate agent charges more than you can afford, you can consider other options. 

  • Are commission rates inclusive of marketing costs? 

Not always. Some commission agreements are inclusive of listing and marketing prices. Others include the realtor’s fee only. If you do not want any future confusion, it is best to discuss this with your agent prior to landing in an agreement. It will give you clarity on what the commission covers. Also, various types of commissions are charged by the agents themselves. So, make sure you know which suits you best. 

  • How many types of commissions are there?

In the real estate industry, we have two types of commissions: fixed and tiered commissions. 

  • A fixed commission refers to a flat percentage of the sale price that a seller pays to a real estate agent. As the name suggests, it does not change based on profit or loss. Usually, the government body regulates and sets a particular rate in fixed commission. 
  • On the other hand, the tiered commission can change depending on the profit or loss after the sale. Most realtors practice this type of commission because they bag in more money. For example, if the selling price is higher, their commission rate will also be higher. 

In closing 

It does not matter which type of commission your realtor asks for. It will take a significant amount from your selling price. Moreover, you have to deal with costly repairs and delays because of processes like staging, marketing, etc. At Detroit Cash For Homes, we buy houses for cash in Michigan directly from sellers. It means you do not need a realtor and can skip whopping commission rates. 

If you are looking for one of the best real estate cash buyers in Michigan, Detroit Cash For Homes is your safest bet. Call us today and get a free estimate of your house!