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What You Need To Know About Real Estate Agents And Commissions


Real Estate Agents have a well-known fact that they make their money from commissions. When they work with clients to buy or sell properties, the agent will take some percentage of that sales price as payment for services rendered - but what many buyers don't know is how much these transactions cost in total.

It's important to understand how real estate agents are paid to ensure you're not paying more than necessary. A commission is a fee that a licensed agent earns for their services when they sell or lease property on behalf of someone else. An agent can earn different types of commissions. Here's a breakdown so you know what you need to know about real estate agents and commissions:

Berkeley Real estate agency

Flat Fee Commission

Real Estate Agents who charge a flat fee usually earn around two percent of the sale price. Some may offer their services for free, but this is rare because it's an easy way to attract new business. Real Estate Agents that have higher volume can negotiate with sellers or landlords to work on commission instead of being charged a flat fee by the seller or landlord. Real Estate Agents who do charge a flat fee may require the client to pay for their expenses, such as advertising costs and closing fees.

Percentage Based Commission

When Real Estate Agents have an ongoing relationship with clients they usually use percentage commissions instead of charging a flat rate. Percentage commission is typically two or three percent of the sale price. Real Estate Agents who earn a percentage commission base their fee on the final sale price, which includes any additional costs or repairs involved in closing the deal. Real Estate Agents who earn percentage commissions typically sell high.

Half-Based Commission

Some Real Estate Agents offer a half-based commission. Half-based commissions are typically offered to high-value clients who have an established relationship with the Real Estate Agent and it's a way to recognize the Real Estate Agents loyalty and effort invested in previous deals. The half-based commission is also a method used by Real Estate Agents that only work on certain types of transactions like buying or selling commercial property, farmland, and others.

Broker's Fee

A broker fee is typically one percent of the sale price if you're working with a Real Estate Agent that has their brokerage firm or realty company. Because they aren't affiliated with any specific company, Real Estate Agents who work on their own typically charge a broker fee. Broker fees are the same as percentage commissions so it's important to ask your Real Estate Agent what type of commission they will be earning for selling or leasing your home before you agree to anything.

You should know that there are a few different types of commissions for real estate agents. It's important to understand the different types of commissions so you know what type of fees you'll be charged. The type you choose will depend on your needs and the agent's commission rates. If you're interested in finding out more about these options, get in touch with us. We'll be happy to answer any questions you have.


Are You Looking For a Real Estate You Can Trust?

The top real estate agency in Northern California, Sexton Group Real Estate | Property Management in Berkeley, California is a boutique real estate company specializing in residential sales for properties throughout the San Francisco Bay Area. To better serve our clients we have three local offices, one in the heart of picturesque Berkeley, one near downtown Oakland and the third in the heart of historic Lafayette, California. The Sexton Group encompasses the essence of Berkeley’s charm, Oakland’s history and Lafayette’s family-oriented vibe all with a relaxed, down-to-earth nature. We are an amazing group of real estate agents whose wealth of experience spans more than 25 years in the industry.  Looking to buy a home in Contra Costa or Alameda County? Contact us today for your free consultation!