What Does The Agent’s Commission Pay For? What You Should Now About Real Estate Agents

From getting your home in picture-perfect form to making sure the right signatures are on the correct dotted lines, a full-service real estate agent is your right (or left) hand throughout the process of selling your home. In return for their work, they usually receive the real estate agent commission – around 6% of the sale price. Even then, they don’t get to keep all of that 6% real estate agent commission.

Do I Need A Real Estate Agent?

Maybe you’re on the fence about hiring a real estate agent because you think you can do it yourself, and that real estate agent commission looks a little high.


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What Percentage Does a Realtor Get?

The industry standard for the real estate agent commission is usually around 6%. You may think that sounds like a lot to pay for someone to take a few photos and stand there while people walk around your house, but whatever you’re feeling, hiring a full-service real estate agent could save you time and money when selling your home.  

Keep in mind that the 6% commission is a bit misleading. Real estate agents, also known as a seller’s agent on your side of the transaction, will charge you a commission (usually 6%), and then will have to split that fee with the buyer’s agent. It’s usually not a 50/50 split but more a 60/40 with the seller’s agent earning more — but it is split. And while 6% is the real estate industry standard, the total percentage that the agents receive can be negotiable, especially if your home is priced around $1 million or more.

If you just did the math in your head and your blood pressure went up, don’t worry — another industry standard is building the cost of the commission into the sale price.

On that note, this is what you as a seller can expect from full-service listing agents:

  1. Initial consultation. Once hired, a full-service real estate agent will do a walk-through of your home to get acquainted with its attributes and drawbacks, asking you about recent updates and any repairs you’ve made and will give you suggestions for additional improvements that could increase your sales price.
  2. Referrals for further updates and repairs. If the agent has suggested updates or repairs to improve your home’s value, they will give you a referral for a general contractor or subcontractors you can trust.

If you’re using your own contractors, have your agent review the list of materials being used. Full-service real estate agents are usually well-versed in quality finishes and will be able to tell you whether or not these will actually add value to your home. They can also help you calculate the return on your investment (ROI).

  1. Staging. In the event that you don’t hire a professional stager, a full-service agent will often help you make your home as marketable as possible. They will give you information on your target buyer demographic and tell you whether you should stage that spare room as a nursery or an office. 
  2. Professional photographs. At least 44% of buyers look at homes online before touring them in person so it’s important to have professional photos. A good agent will not only have a professional photographer they regularly work with, they will also pore over the results, choosing the images that accentuate your property’s best characteristics. Full-service agents use these photos for your home’s online listing profile and for marketing brochures.
  3. Professional signage. If you’re in a rural area, professional photos are going to be more important, but if you’re in an urban or suburban area with lots of foot traffic, a “for sale” sign is free advertising. And a full-service agent will have a sleek, professional-looking sign that includes their phone number, the property’s website, and virtual tour links.
  4. Pricing your home correctly. A good agent knows that a mispriced home will sit on the market too long and will eventually sell at a lower amount than it would have if it had been correctly priced. So they will tap into their experience and access market research to help you decide how to price your home to help you get you the most money in the quickest amount of time.
  5. Marketing materials. Once the agent has those beautiful photos of your home, they’ll create a website; make glossy marketing brochures, virtual and 3D tours. They will also post your home on social media.

Take some of the professional marketing brochures with you to work or put them up on community boards in your neighborhood. And post the professional photos on your own social media accounts. Your agent will be using all of their professional channels to market your property, but using your network, in addition, will only expand the pool of potential buyers.

  1. Open houses. Open houses take almost a full day to host (that doesn’t include marketing or prep time) and as such, some budget agents don’t even offer this service, while others will charge extra for it. But a full-service agent will not only host open houses, they’ll help you get ready for them — and sometimes even bake cookies in your oven so that your home smells great!
  2. Ensuring potential buyers are pre-approved for a loan. A good agent will ask each potential buyer for their lender’s pre-approval letter. They do this so that they know they aren’t wasting anyone’s time on buyers who are only casually looking. This will also help to focus on buyers’ offers that won’t be getting your hopes up only to have the sale fall through for lack of funds.
  3. Attending home inspection and appraisal. Agents attend the home inspection and appraisal so they can hear the results firsthand. Sometimes an inspector will say something might need replacing in 3-5 years and the buyer will interpret that as an immediate repair and then try to negotiate the sale price down. But if your agent is present, they can help you negotiate anything that arises.

Since the appraisal will be the only report determining value, it’s important for the appraiser to have the best information about your home. Your agent should attend the appraiser’s tour so that they can answer any questions the appraiser might have and can point out all of the major updates. Home improvements are a large factor in determining value, so you want the appraiser to give you full credit for all of the work you did.

  1. Negotiating with the buyer or buyer’s agent. Most buyers will have last minute requests prior to closing the sale of your home, and an agent can tell you whether or not they’re reasonable. Outside of this, your agent will negotiate to get you the best terms possible based on the buyer’s offer.
  2. Finalizing loose ends before closing. This can include anything from getting your smoke and carbon monoxide detectors certified to your final water and sewer readings.
  3. Hand-holding through the closing process. A full-service agent will help you clear up any mistakes on the title report (such as incorrect liens); they will guide you through the paperwork and ensure that every “i” is dotted and every “t” crossed.

Real estate agents are paid to make selling your home as smooth a process as possible. Their goal is to get you the highest sale price in the quickest time and to head off any problems before they can blow up the sale. So before you pass on an agent because that 6% seems high, consider the money and time they could save you. You just might find that it’s worth it.

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