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What are Realtor&Reg; Fees?

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  • Written By: Keith Koons
  • Edited By: Lauren Fritsky
  • Last Modified Date: 14 September 2016
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Realtor® fees are normally a percentage-based cost that real estate professionals charge when successfully finding a buyer for a residential or commercial piece of property. In a standard contract, both the real estate agent who listed the property and the one that located a buyer would split the commission of the sale evenly, and the companies that those professionals are employed with also receive a portion of the Realtor® fee. Another cost that the Realtor® sometimes recuperates at the closing is any funds that were paid out for various inspections conducted on the property. There are also various banking and escrow fees associated with a real estate sale, but these normally do not benefit the Realtor® in any way.

Many homeowners try especially hard to avoid Realtor® fees whenever possible, and sometimes they will attempt to conduct a private sale of their residences without the use of a real estate agent at all. While this method could easily save the seller 6 to 10 percent of the overall purchase price, it is often difficult to locate and attract potential buyers that are financially qualified to complete the transaction. In many of these cases, a Realtor® may come across the property with a qualified buyer and negotiate Realtor® fees dependent on a final closing, which may vary between 2 to 4 percent.

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Often Realtors® can also acquire a type of finder’s fee from lending institutions, so if the overall sale price is large enough, they may be persuaded to forgo part of their normal commission to close the sale. While this type of agreement is often rare, Realtors® may accept it for friends or family members as long as the buyer, the seller, and the lending institution approve the modification. Some lenders will also have a maximum payout in Realtor® fees to provide a greater advantage to the buyer, but in rare cases, these fees may not be easily waived and they would have to be paid by the buyer or the seller at the closing.

Some miscellaneous Realtor® fees that agents charge could relate to expenses incurred during the commission of a sale, like advertising, a travel allowance, or anything else stipulated within the contract agreement between the client and the real estate agent. Normally, these extra costs are waived in the event that a sale does not take place, which is why Realtors® will normally go well out of their way to satisfy their clients. Homeowners may also contact a real estate agency that they do not have a contract with to request their home be shown or to negotiate a commission for a quick sale, but this type of agreement is completely at the seller’s discretion.

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