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How much should I pay my Real Estate Broker?

Standard Real Estate commission is 6%. This 6% is given to the listing (selling) broker, and generally half is given to the buying (cooperating) broker.

So, if you are selling a house for $500,000, the standard cost for finding a buyer is $500,000 x 6% or $30,000. Your listing broker will receive $15,000 for his services and the cooperating agency that produced the buyer will receive $15,000.

Remember all commissions are negotiable; however, you will need to be careful to offer sufficient amount so that the agents will cooperate and use their energy, time, and resources to make your sale happen.

To keep your decision simple, here’s how you should determine your commission rate for your listing broker.

6% is your standard. If you do not have any driving factors, this is the rate you should use.

When to go lower

5% should be used if you are selling a high value property (such as over $500,000). For the agents supporting your sale, 5% of a high value is still a good amount of money. Additionally, you can lower the commission when your property is already very attractive on its own. If the agents know that your property is likely to sell very easily, they will jump all over it even if they will make less money.

4% should be used if you are selling a property of even higher value (such as over $1,000,000). Same as above, if you property is very desirable, then reduction of commission may work as well.

When to go higher

You should go higher when your situation is opposite of above. Regarding desirability of the property, this is why you make money when you buy correctly, and you will realize the money factor when you sell.

7%-8% should be used when you are in a rush to sell and would like efforts of more buying agents. Additionally, this method may be required if your property is not as desirable, enabling buyer agents to work harder to persuade potential buyers to consider your property.

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