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<\/a>The subject of real estate agent commissions is a hot topic as of late, thanks to the National Association of Realtors (NAR) settlement of $418 million last month. The anti-trust series of class-action lawsuits tackled the percentage disclosure to homebuyers of agent payment. As part of the settlement, NAR agreed agents must enter into written agreements with buyers before they tour any home. These agreements must specify the compensation that agents will receive.<\/p>\n\n\n\n
\u201cPeople feel awkward talking about money\u201d<\/strong><\/p>\n\n\n\n \u201cMany Americans make the biggest purchase of their life without knowing precisely how the professional they hired to guide them through the transaction is getting paid,\u201d said Redfin chief economist Daryl Fairweather<\/a>. \u201cHome sellers often have a candid conversation about fees with their agent before signing an agreement to work together. Buyers would benefit from doing the same. People feel awkward talking about money, but it\u2019s important to understand what your agent is charging and discuss whether you will need to ask the seller to cover your agent\u2019s fee as part of your offer negotiation or pay for it out of pocket.\u201d<\/p>\n\n\n\n Some buyers may not know that the commissions received by the agent have always been negotiable. The typical process involves the home seller to covering payment for both their agent and the buyer\u2019s agent. A commission equal to 2.5-3 percent of the home sale price typically goes to their agent and another 2.5%-3% is received by the buyer\u2019s agent.<\/p>\n\n\n\n Currently, nearly 40% of homeowners who plan to sell their house in the next year think a 3 percent commission for a buyer\u2019s agent seems \u201ca little\u201d or \u201cvery\u201d high. But a similar amount (36 percent) of likely sellers said it seems \u201cjust about right\u201d and 26 percent said it seems \u201ca little\u201d or \u201cvery\u201d low.<\/p>\n\n\n\n