Most homeowners look at real estate fees in the same way that they look at taxes. We know that we need to pay them but we really don’t understand exactly what we will be paying or why. It is just a number that is tacked onto the real estate transaction to cover the realtor’s time and effort. But understanding how the fee is calculated and paid can help you to better budget for your next home sale or home purchase.
First, you should know that agent fees are negotiable and not every realtor charges 6%. That is a general number that has become accepted as an average but it does not have to be the fee that you pay. And the fee is figured as a percentage of the sale price of the house or property. You will know what the rate is that you will be expected to pay when you sign your contract with your real estate agent.
Also, understand that the fees are paid out of the money from the purchase of the home. It can be seen as the seller paying the fees because it is their money, the proceeds of the sale, that are paying the realtors. Or you can look at it as the buyer is paying the realtors because the seller increased their asking price to cover the additional percentage that the realtors would get. But regardless of how you look at it, the realtor fees are paid from the proceeds. In most cases the fee is split between the buyer’s realtor and the seller’s realtor.
The distribution of the fees is completed in accordance with the contracts that the buyer and the seller each have with their respective agent. So that is where you can find the percentage ranging but normally being around 6%. But the funds are not given directly to the agent, they are paid to the broker whom the real estate agent works for. The broker gets their cut of the fees and then the remaining funds go to the realtor. Brokers can be seen as the business owner and the realtor is the franchise owner. But in this case the broker, or business owner, is the one who is paying for the advertising, the office space and the other fees associated with running a real estate business.
Many consumers feel that realtors are making a lot of money for very little time and effort involved in a transaction. But the truth is that many sales transactions take weeks or months to progress to completion. In the case of a seller’s realtor, there are marketing materials to be made, listings to create and upload and open house appointments to set up. For the buyer’s realtor, there could be dozens of home visits before the buyer selects their perfect home. So there is more time invested into each transaction than just a single day.
When you call us to buy your house, you won’t pay any realtor commissions or title fees. All the money that you save on these fees goes straight back into your pocket. Because we have the funds to pay cash for properties, our cash offers are not contingent on any bank financing as with most real estate transactions. Give us a call at 602-833-7812 for a no-obligation cash offer for your Arizona home.