What is a real estate agent commission?
When buying property, real estate agents are invaluable. Realtors act as liaisons between buyers and sellers. For buyers in particular, they will assist with scouting properties, organizing showings, submitting bids, and negotiating on their clients behalf. However, these services come at a price.
Realtors rarely charge hourly fees. They often make a good chunk of their money through commissions, which are paid as a percentage of the property’s purchase price. Technically, these fees are commonly paid by the seller. However, sellers will often factor this fee into the selling price of their property. Therefore, in reality, buyers front the commission costs.
How much do real estate commissions cost?
While this percentage varies, commission costs are usually between 5-6% of the purchase price. This commission is split between the real estate agent and broker, with the agent receiving approximately 2.5-3% of the total purchase price (i.e., approximately 40-50% of the total commission paid by the buyer).
For example, if the purchase price of a property is $500,000, the commission can be calculated as:
$500,000 x 6% (total commission) x 50% (realtor commission) = $15,000. As you can see, in this case, the realtor was compensated with 3% of the total purchase price.
How can you save money on real estate commissions?
These steep real estate agent costs can significantly drive up the overall cost to both sell and purchase a home. While these costs are a hard pill to swallow, there are still several avenues that buyers and sellers alike can negotiate with their respective realtors. Firstly, you can do just that- negotiate. There are no set laws in place that dictate what percentage of the purchase price a commission has to be, so you could try to haggle down your real estate agent. However, there’s a good chance that they will be unwilling to change their commission rate- there’s no law that dictates them to agree to your negotiation, either.
Another option (that likely has a higher success rate) is to work specifically with a real estate agency that offers commission refunds, like Yaypad. When you buy with Yaypad, you’ll receive a 50% commission rebate.
Yaypad always puts their customers first. You’ve put a lot of time, effort, and money into purchasing your dream home. Why should one pesky fee stand in your way? You should be rewarded for your hard work, not penalized!
By rebating 50% of your realtors commission, you will save thousands of dollars. To illustrate, let’s go back to our previous example. For your $500,000 property, your 50% commission refund can be calculated as:
$500,000 x 3% (agent commission) x 50% (your refund) = $7,500
Yaypad’s revolutionary commission refund will provide you with unmatched savings, and there’s no catch. With fully transparent pricing- click here to find out exactly how much you can save with TREND Real Estate. We’re on your side, and we want to help you purchase your dream home at the lowest possible cost.
Contact us today to get started!