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Do Buyers Pay Realtor Fees?

Are you confused about realtor fees? Who pays them, the buyer, seller, or both? Talk to an experienced real estate agent to get the confusion ironed out.

Are you confused about realtor fees? Who pays them, the buyer, seller, or both? Talk to an experienced real estate agent to get the confusion ironed out.

Updated May 10th, 2019

The best part about buying or selling your house is the initial excitement (or trepidation) of the upcoming possibilities. You have dreams of the house you’re going to buy or wherever you’re going to move after you sell your home. The worst part about buying or selling a home is the fact that you have to pay money regardless of whether you’re buying or selling.

As the time looms closer for you to go out and find the home of your dreams, you may worry about not having enough money. You continue down that rabbit hole of worry, and wonder how much money you actually need to have on hand in order to make the transaction. You may catch yourself asking nobody in particular as you fold the laundry one day, “Do buyers even pay realtor fees?!”

We are here to calm those nerves and hopefully put to rest any fears of hidden fees that may creep up on you at house closing time.

Realtor Fees

First things first: realtor fees. What are they?

Realtor fees are also called commission. Usually, real estate brokers will charge a percentage of the money made from the sale of the home.

This commission is paid for services rendered, such as helping you locate a home by using the MLS, scheduling times with the owners of the home for walkthroughs, and organizing paperwork (among other things). The average real estate broker makes 2% to 3% of the sale if they are working with the buyer, and 3% to 4% of the sale if they are working with the seller.

There are brokers who charge less for various reasons. Those reasons could be only offering select services to help you buy or sell your home, or they could be a discount brokerage. It is always a good idea to ask about realtor fees upfront, prior to engaging their services.

Closing Costs

In addition to the buyer’s down payment and earnest money, which ranges from 3% up to 20% of the original mortgage amount, there are several fees known as closing costs to be aware of. The type of loan you are purchasing the home with will determine the amount of money your closing costs will be. For example, if you are purchasing a home with an FHA loan, your commission rates will look something like this.

A good rule of thumb for closing costs is to save between 2% and 5% of the home purchasing price. This all depends on the area you live in and the interest rate you are entering into. For a complete list of closing costs broken down, go here.

Who Pays Closing Costs?

Closing costs are the buyer’s responsibility. It is a good idea to be prepared with money for the closing costs on hand as much as possible. That being said, it is not uncommon to negotiate that the seller pays some or all of the closing costs. Even when this happens, however, the buyer is still paying for closing costs, it’s just wrapped into the sale price.

Another option is having the amount of the closing costs be tacked on to the loan. For example, if you were purchasing a home for $250,000 and you were paying 3% (or $7,500), you would ask to get approved for $257,500 in order to avoid paying closing costs upon purchasing the house.

Knowing all of this information about closing costs is very helpful, but what about your initial question? Do buyers pay realtor fees?

Do Buyers Pay Realtor Fees?

The realtor fees are usually wrapped up in the seller’s closing costs. There is room for negotiation on that front, but typically that is how it works. The seller will pay the realtor fees out of the money they receive from selling the house. It is worth noting, however, that although the seller is the one actually shelling out the cash for the fees, the money came from the buyer.

One Last Note

It would be remiss of us to not point out that although the buyer doesn’t usually pay realtor fees, they may be eligible for a commission rebate. Clever Partner Agents can pay up to 1% of the sale price back to the buyer in the form of a rebate. Discount brokerages also offer incentives to sell your house.

In the market to save money on realtor fees? Check out Clever. Clever refers you the top agents in your area to make your buying or selling experience a great one. Call us today at  1-833-2-CLEVER or fill out our online form to get started.


Reuven Shechter

Reuven Shechter is the Outreach Coordinator at Clever Real Estate, the free online service that connects you with top real estate agents to help save on commission. He spreads the word about Clever, disseminating studies to journalists and developing relationships with media outlets. Reuven is passionate about investing in real estate and creating lasting success for families. His writing has been featured in Max Real Estate Exposure, Leverage Marketing, and more.

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