Most people understand the concept of a commission, it's usually pretty simple, a salespersons sells something and receives a commission that is equal to a predetermined percentage of the cost of the sold item. It's understandable that people, then, are often confused about Milton real estate agent's commission fees. Real estate agent's commissions are anything but simple. How much is the seller's commission? How much for the buyer? What percentage do the brokerages get? Can I negotiate or are these set in stone? These are some of the questions you might have if you are curious about how real estate commissions work.
In most real estate deals there are two agents, the seller's agent and the buyer's agent. Each of these agent's works for a brokerage. That means that there are four separate entities that need to be paid for each real estate deal that occurs. If you are interested in buying a home, you might be wondering who pays your real estate agent's commission fees.
The way it usually works is the seller agrees to pay his or her agent a particular percentage of the sale price, for example seven percent. The seller's agent then lists the property and offers a portion of that percentage to the buyer's agent. The exact proportion will vary depending on the property and whether it is a buyer's market or a seller's market. If condos are in high demand the seller's agent might offer only a small percentage of the commission to the buying agent, whereas if they are in low demand the buyer's agent may be offered a larger percentage.
Most brokerages have a minimum percentage that they operate at. A buyer's agent, for example, might work for an brokerage that requires three percent commission. What happens then, if the seller's agent is only offering two and a half percent commission to the buyer's agent? In that case the buyer will be responsible for paying the additional half percent to his or her agent. It is possible that the buyer may negotiate with the agent and the brokerage to have this fee waved, but this is something that the buyer should find out before the sale is completed.
Most people who are selling a home wonder if it is possible to negotiate with their agent in regard to the commission that is charged. In general, yes, you can negotiate, but whether or not you are successful depends on a number of factors. The popularity of the agent, the type of market that you're in and the demand, or lack of demand for properties of the type you are selling will all affect your ability to negotiate for a lower commission.