How much do you pay your Realtor? If you’re selling your home in Louisville, then you will probably pay commission anywhere from 6% all the way up to 9% of the final sale price of the home. But there is no standard for this. If you’re buying a home, the answer is zero – nothing – nada. You see, the seller of the home is the one that pays both Realtors. Just like in law, and most everything really, there are two sides to each real estate transaction. One Realtor represents the seller of the home, and one represents the person buying the home. Before the home is even listed for sale the person selling the home agrees to pay a commission upon the successful closing of their home. In a lot of cases in Louisville, and for this example, we will use 6% of the final sale price. The company that lists the home for sale will only see 3% of that. The other 3% is used to pay the company that brings a capable buyer to the table. Notice I said “company”. People often assume that the actual Realtor walks away with 3% of the sale price of the home, but that is far from the truth. Realtors pay their company for each transaction. They also invest money in marketing your home for sale and other associated costs, so the take home for the Realtor ends up being closer to 1%. Regardless of this, it is the seller that pays the commission for both agents. So this means that if you want to start looking for a house to buy, you pay nothing. When you and your Realtor find a house that you like, you still pay nothing. When you get to the closing table and you get the keys to your new Louisville home, you still pay zero dollars. Buyer representation is free. It is also very necessary.
A lot of people like to take things upon themselves and try to negotiate the terms without a Realtor. The problem with this is that most people have no idea what they are doing, nor do they realize how much is actually involved in a real estate transaction. Thinking that you will get a better deal buying a home without using a Realtor is only going to hurt you. When you go to an agent that has a home listed for sale and you don’t have a Realtor of your own, you will pay the same, if not more for the home than you would if you had a Realtor working for you. That agent will not lower their commission just because you don’t have an agent. Here’s why: since you don’t have representation, the agent that is selling the home will have to take on the responsibilities of both agents. This is double the work. Let’s not forget the fact that the Realtor that is selling the home is working for the seller. Their job is to get the seller of the home the most money possible. How then could they possibly help you get the home for the least amount of money possible? It makes no sense.
If you have any questions at all about the real estate market or beginning the process of buying or selling, please contact me. I am here to answer questions and help you through an intense, complicated process.
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