Real Estate Agents – How Much Do They Cost?
The real estate business can be a complex game, both for clients and the agents themselves, when it comes to the costs involved. Many an estate agent works primarily on commission, rather than earning a regular salary, and this will affect the cost of properties in addition to causing additional cost when it comes to paperwork.With that in mind it is a god idea to look at the costs that bother sellers and buyers are likely to face when working with a real estate agent.BuyersBuyers will generally face much less in terms of upfront commission payments than the sellers, however that doesn’t mean that the commission taken from the amount paid to the seller doesn’t affect the buyer.Imagine a property is worth $100,000 and the commission is 6%. This 6% will then be divided between the buyer’s and seller’s agents appropriately from the money that is paid to the seller. While this doesn’t appear to affect the buyer, one must remember that this 6% could have been knocked off the price of the property if the commission wasn’t a factor, which means that they may have paid slightly more for the property as payment for using the estate agent.Furthermore, when buying a property there is a lot of paperwork that needs to be filled out to ensure all of the legalities are squared aware and the handover goes smoothly. While this can be handled by the buyer as they see fit, most will often call on the services of their real estate agent, which in turn will result in additional one-off fees.SellersThe seller is much more direct in terms of what they pay their estate agent. A seller will essentially be paying for a “listing”, which amounts to any and all processes the selling agent undertakes to find a buyer for the house. In most cases this will be done on a percentage basis of the eventual sum paid, rather than a flat fee.Again using the $100,000 example from earlier, the 6% commission comes directly from the money received by the seller and they are the ones who will actively pay it to their estate agent. This leads to many sellers upping the price of the property a little in an effort to compensate for the payment, though this may not always be the best idea.With this in mind, it can often be difficult to determine exactly how much you will pay an estate agent, as much depends on the price of the property and the percentage of commission the agent will receive from the sale. Buyers can plan for costs a little more effectively as the charges for paperwork-related tasks will usually be a flat fee, however sellers are not always so lucky.Also remember that, because the agent works on a commission basis, the properties that offer a higher commission will often be given priority. Always bear this in mind when negotiating with an agent as a lower percentage can often mean a slower sale.
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