REALTOR® Fees: What Are They And Who Pays For Them?
Sidney Richardson4 MINUTE READ
June 16, 2021
When buying or selling a home, there are various costs involved with closing, including REALTOR® fees. If you hire a real estate agent or REALTOR® to help you buy or sell a house, you’ll have to pay this fee, so it’s important to know how much you might be paying to whom and why. Here’s a few things you’ll need to know.
What Are REALTOR® Fees?
A REALTOR® fee, also known as a real estate commission, is the price you pay to work with a real estate agent or REALTOR® to buy or sell a house.
REALTOR® fees might sound intimidating, but you shouldn’t let them deter you from working with a real estate agent or REALTOR®. Real estate commission fees are a small price to pay to get the best price for your house, whether you’re buying, selling or both. Having professional help when selling or buying can turn the negotiations in your favor and is usually more than worth the cost.
These fees cover the cost of many services that your real estate agent or REALTOR® may provide you, from marketing your home to walking you through the various processes involved with selling or buying a house.
What To Look For When It Comes To A REALTOR® And Their Fees
There’s a lot to consider during the process of buying or selling a home, so it can be very advantageous for you to have a real estate expert with lots of experience on your side. No one expects you to tackle buying or selling all on your own – it’s okay to ask questions, and real estate agents and REALTORs® can usually answer them.
When looking for the right real estate agent or REALTOR® to work with, it’s a good idea to shop around a bit. Buying or selling a home is one of the biggest decisions you can make, so it’s important to work with someone you trust.
When looking for a real estate agent, keep the following in mind:
- Be transparent and let the REALTOR® know exactly what you’re looking for. There are plenty of agents out there, so chances are you’ll be able to find one that can meet your exact buying or selling needs.
- Ask any and all questions you may not be sure about. There are no stupid questions – it’s better to be informed than confused.
- Be upfront about not yet knowing what real estate agent or REALTOR® you’ll go with.
- You can try to negotiate the fee with the REALTOR®, but there’s only so much wiggle room – your real estate commission fee will depend largely on the price of your home.
How Much Are REALTOR® Fees?
Rather than an upfront fee, real estate commission is usually decided as a percentage of your home’s final sale price. The amount varies, but 6% is a common rate.
While this might seem like a lot, especially if your home is worth a lot of money, think of it as an investment opportunity. You’re investing in a real estate agent to assure you get the best price possible when buying or selling, and it will hopefully pay off in the end.
Average Cost Of REALTOR® Fees
The 6% average cut of your home’s sale price is usually split between the buyer’s agent and seller’s agent involved with the sale of a home. Though this rate does vary and isn’t always split exactly 50/50 between agents, estimating what 6% of your home’s sale price will be can give you a good estimate of what you might pay as a real estate commission.
For example, if a house sells for $200,000, you can expect to cut around $12,000 out of it for the REALTOR® fee.
Other Associated REALTOR® Fees
Remember, there are a lot of costs involved with closing – and the fee paid to real estate agents may not cover all those costs. The REALTOR® fee covers the work your real estate agent will do to market your home, negotiate on your behalf and take care of the details throughout the deal.
Depending on your situation and what costs you may have incurred along the way, expect to pay your real estate agent extra for various things, including:
- Home inspection and appraisal
- Photography and videography when listing a home
- Staging, virtual or in person
Who Pays For REALTOR® Fees?
So, since REALTOR® fees are split between buying and selling agents, you may be wondering – who pays for the real estate commission, the home buyer or seller? The answer to that can vary, as the REALTOR® fee can be negotiated, typically. Usually, though, the seller pays the fee, subtracting it from the total sale price of the home after closing.
You can sometimes negotiate the cost of real estate commission fees, though you should be aware that you get what you pay for. If you’re negotiating for a lower REALTOR® fee, that could be less money that would go toward marketing your home to buyers and other tasks your real estate agent might take on for you.
While real estate commission is paid when a home closes, it isn’t technically included in ‘closing costs.’ Closings costs are other expenses, usually related to your loan and not your real estate agent or REALTOR’s® work. This includes things like legal and loan processing fees, typically. Costs will vary, but on average, closing costs are about $6,087 in the U.S. as of 2020 (taxes included), according to data gathered by ClosingCorp.
Here are a few things you can expect to pay for at closing besides your REALTOR® fee.
- Insurance (title, home, etc.)
- Processing and underwriting the loan
- Property tax
- Deed recording costs
- Closing or escrow fees
The Bottom Line: What Your Typical REALTOR® Fees Will Be
Essentially, REALTOR® fees are the investment you make if you decide to work with a real estate agent or REALTOR® to get the best home sale price possible. Whether you’re buying or selling, it’s important to take into account how much you might pay in real estate commission fees as well as closing costs so there are no surprises when it’s time to close.
Whenever you’re ready to take the next step in your home buying or selling, it’s important to choose a real estate agent you trust. Visit Rocket Homes® today to get matched with one of our Verified Partner Agents.
Selling your home?
Work with a real estate agent who knows your local market.Get Started
What Are Home Sale Proceeds And How Are They Calculated?
Wondering how much you’ll gain in net proceeds from selling your home? Run the numbers and arrive at an estimate.
What Does A Real Estate Agent Do?
Real estate agents play an essential role in home buying and selling. It’s important to understand their role in those processes, as well as their legal obligations. Here’s a quick guide to what real estate agents do.