What is Going On With Commissions?
Micky Thompson November 27, 2024
Micky Thompson November 27, 2024
In a real estate transaction, commissions were typically paid as part of the closing costs at settlement. The question of who pays these commissions often depends on the terms negotiated in the purchase agreement. Traditionally, sellers have been responsible for covering the real estate commissions for both their listing agent and the buyer's agent. This common practice stems from the understanding that the seller's agent will help market the home and facilitate the sale, while the buyer's agent represents the interests of the purchasing party.
In the current market environment, however, this arrangement has become more flexible. The new settlement forces buyer agents to have some sort of written agreement before showing and submitting offers on a property. When submitting offers, some agreements allow for negotiation on who will pay the commission, and buyers may offer to cover part or all of the commission fees in an effort to make their offers more attractive in competitive situations.
The real estate industry is evolving, and commission structures can vary significantly based on local market practices and individual negotiations. In some cases, there are also alternative commission models, such as flat-fee listings or discount brokerages, which may further change the traditional commission payment landscape. It is important to note that the quality of brokerage that you hire, will largely impact the quality that you receive when listing your home.
Regardless of who ultimately ends up paying the commissions, it's essential for both buyers and sellers to clearly define these costs in the purchase agreement and discuss commission expectations early in the process. This transparency can help avoid misunderstandings and ensure that all parties are on the same page regarding transaction costs, ultimately contributing to a smoother closing experience.
If you have more questions regarding commissions, contracts, or listing your home, reach out to me anytime!
Micky Thompson
503-939-9414
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