As a local realtor in Niagara, it's important for me to ensure my clients understand how real estate commission works. Buying or selling a property is a significant financial decision, and understanding the fees involved is crucial. In this article, I'll explain how real estate commission works and what my clients need to know when working with an agent.
It's important to understand that when you hire a real estate agent and pay for their services, you're not just hiring an individual realtor, but a you're essentially hiring a marketing team. Our job is to not only help you buy or sell a property but to ensure that your property is marketed and presented in the best possible light. This includes creating professional photography and videos, promoting the property on various platforms, and conducting open houses and showings. We understand that hiring a real estate agent is an expensive service, and we don't take it lightly. Our goal is to provide you with a high level of service, expertise, and guidance throughout the entire process to ensure that you achieve your real estate goals.
What is Real Estate Commission?
Real estate commission is the fee paid to the real estate agent who represents the buyer or seller in a property transaction. The commission is calculated as a percentage of the sale price of the property and is paid at the closing of the sale. The commission is typically split between the buyer's agent and the seller's agent, with each receiving a percentage of the total commission based on their agreement with their respective clients.
Who Pays the Commission? In Niagara, the seller typically pays the commission to both the buyer's agent and the seller's agent. This fee is usually paid as a percentage of the sale price of the property and is deducted from the proceeds of the sale. The commission is split between the two agents based on their agreement with their respective clients.
In some cases, the buyer may agree to pay their agent's commission, either as a separate fee or as part of the purchase price. This can be negotiated between the buyer and their agent and is typically outlined in a buyer's representation agreement.
How is the Commission Divided? The commission is typically split between the buyer's agent and the seller's agent, with each receiving a percentage of the total commission based on their agreement
with their respective clients. For example, if the commission rate is 5% and the buyer's agent and seller's agent have agreed to a 50/50 split, each agent would receive 2.5% of the sale price.
It's essential to note that the commission split is negotiable between the real estate agent and their client. The agreement between the agent and their client is outlined in a listing agreement for the seller or a buyer's representation agreement for the buyer.
What Does the Commission Cover?
The commission paid to the real estate agent covers a range of services provided by the agent during the transaction. This can include listing the property for sale or searching for properties to buy, marketing the property to potential buyers or searching for properties that meet the buyer's criteria, negotiating offers and counteroffers on behalf of the client, drafting and reviewing contracts and other legal documents, coordinating with other professionals involved in the transaction, such as inspectors, appraisers, and title companies, and providing guidance and advice throughout the transaction process.
It's important to note that the commission paid to the real estate agent is not the only cost associated with a real estate transaction. There may be other fees involved, such as closing costs, property taxes, and insurance.
Conclusion
Real estate commission is a fee paid to the real estate agent who represents the buyer or seller in a property transaction. The commission is typically a percentage of the sale price and is split between the buyer's agent and the seller's agent. As a local realtor in Niagara, I want my clients to understand the fees involved in a real estate transaction and the services they can expect from me. It's essential to work with a knowledgeable and trustworthy real estate agent who can guide you through the process and ensure a successful transaction.
