When you decide to buy or sell a Memphis area home, you are likely to enlist the services of a Memphis real estate agent to help you navigate the complex process.  While these professionals provide invaluable expertise, one common question that many people have is, “How much do I pay a Realtor?”

The Basics:  Real Estate Agent fees can vary depending on several factors, including your local market and services you may require.  These fees are typically paid by the seller, and can be structured in different ways.

Buyer’s Agent Commission:  As a buyer, you typically do not pay your real estate agent directly.  The Buyer’s Agent’s commission is usually covered by the seller from the total commission paid.  This means that as a buyer, you can benefit from the expertise of a Realtor without incurring a direct cost!

Seller’s Agent Commission:  The most common type of real estate agent fee is the Seller’s Agent commission.  This is the fee paid to the Realtor who lists and markets your property for sale.  It is typically a percentage of the final sale price and can vary, but is typically between 5-7%, depending on your market.

For Example, if you were to sell your home for $300,000, and you paid a 6% commission, you would pay your Realtor $18,000.  That commission typically would then be split between the Seller’s Agent and the Buyer’ Agent, with each receiving their respective share.

Additional Fees:  In addition to the commissions, there might be other costs associated with the transaction.  For instance, you may be responsible for paying for your closing costs, inspections, appraisals and other services.  These costs are separated from your Realtor’s commission and should be discussed with your agent and included in your budget.

How Real Estate Agents Earn Their Commission:  Agents earn their commission by providing a range of services, including marketing your property, conducting market research, coordinating showings, negotiating and advocating on your behalf, and handling paperwork involved in the sale.  They invest a great deal of time, effort, and resources to make the process as smooth and successful as possible.

Having someone advocating on your behalf and working for you is invaluable, in a very complex process.  A well-informed and transparent discussion about commissions can help you build a successful partnership with your Realtor and ensure a smooth and efficient real estate transaction.