Who Pays the Real Estate Agent Commission?

Asked by Mcdermott, New Jersey Colony, Melbourne, FL Thu Mar 29, 2012

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Fri Mar 30, 2012
As you can see, typically the seller pays, but the seller pays the commission from the proceeds of the sale. So, typically, the commissions are built into the price of the home. Since this is a long standing and accepted practice, the market value of homes (in general) reflect this.
Phil's answer here alludes to this fact.

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Jeanne Feeni…, Agent, Basking Ridge, NJ
Fri Mar 30, 2012
Hi there, the commission is negotiated at the time of listing between the Seller and Listing Agent, The commission is paid by the Seller, with a portion going to the Listing Broker and a portion going to the Selling Broker. How the total is split is specified in the listing paperwork, with the % or $ amount offered out specified in the listing.

Jeanne Feenick
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Nina Harris, Agent, Williston Park, NY
Thu Mar 29, 2012
The seller normally pays the agent's commission. In some cases, if the listing only pays the buyer broker and seller's agent commission then the buyer would pay the buyer broker's commission which is negotiated upfront.
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Phil Rotondo, Agent, Melbourne, FL
Thu Mar 29, 2012
On paper it appears that the seller is paying.
But with only the buyer coming to the table with funds.....hmmmm
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My NC Homes…, Agent, Chapel Hill, NC
Thu Mar 29, 2012
Sellers pay the commission to the listing agency. The listing agency typically split the total commission 50/50 with the selling agents (buyer broker) agency. So if the total commission were 5% the lisitng side would keep 2.5% and the selling side would would get 2.5%.

There's no rule or law regarding how much the commission rate is or what the split should be. The typical range for a residential commission tends to be between 5-6% though occasionally it's more and occasionally less.

For those selling on their own, they should be prepared to offer a buyer's broker a commission in the range of 3% if they bring about a sale.

Hope this helps.
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Frank Dolski, Agent, Lahaska, PA
Thu Mar 29, 2012
The seller pays the Commission to the listing broker. Some percentage goes to the selling broker but the listing broker will verify the mutually agreeable percentage at the time you sign the listing contract.
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Suzanne MacD…, Agent, Succasunna, NJ
Thu Mar 29, 2012
Everything in real estate is negotiable. Generally, when selling real estate, the seller pays the commission, however, I have seen situations where a buyer will retain a real estate agent to represent them and agree to pay the agent a percentage of the purchase price if the seller does not. It works out the same for the seller because the buyer is simply going to reduce their offer to compensate for the fee paid to the real estate agent.

When renting real estate with a real estate agent it's even more ambiguous. Here in New Jersey it is not uncommon for the tenant to be required to pay the entire real estate fee. However, just as with sales, everything is negotiable and tenants can propose that the land lord pay the fee, or that the fee be split between the landlord and the tenant. I always tell the landlords I work with, 'pay the fee and you will be on the top of everybody's list', but in a corporate relocation situation the relocation company tends to reimburse tenants for the fee so it's far more common to ask the tenant to pay the fee and then negotiate.
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