How are realtor's fees determined?


Quick Answer

Realtor's fees are determined by a few different factors, the biggest being the anticipated selling value, Realtor.com notes. Commissions are negotiable, but generally realtors charge 1 to 6 percent of the final selling value.

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Full Answer

The majority of realtors are paid on commission only, which means they don't earn any income from their clients until they close their sales, Realtor.com notes. This is true whether the realtor is representing the seller or the buyer in a transaction.

In many cases, realtors must split the commission with the company or broker they work for, Realtor.com says. The exact amounts vary depending on the contract details between the broker and the agent, which is determined when the client hires the realtor. The sellers usually take the commission into account when determining a listing price for the home, and the commission is taken out of the closing sale proceeds.

The listing realtor and his brokers spend money and time to market the home, advertise it for sale and prepare the home for sale, so payment is for those services. A buyer's agent has a contract with his clients for payment when the buyer completes his purchase, even if the buyer found the home on his own, Realtor.com says.

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