Commisson: Buyer Agent

How much is the commission?

In residential sales transactions, the standard is 6% of the property's sale price, which is divided as 3% for each of the agents involved in the transaction (the buyer's representative and the seller's representative).

In residential rental transactions, the standard is 10% of the annual contract value or one month's rent. This commission is divided equally between the agents participating in the transaction.

Who pays the commission?

Traditionally, the seller negotiates a commission with their agent, who may agree to share a portion with the buyer's agent.

For an experienced agent with good negotiation skills, it is common to have the seller also cover the buyer's agent's commission. However, in cases where this is not possible, the buyer may decide to contribute all or part of that commission if they believe the property justifies it.

On the other hand, for properties sold directly by builders or developers, it is normal for them to compensate the buyer's agent as part of their business strategy.

In summary, everything is negotiable, and the goal is always to protect your interests. Having professional representation from the beginning allows you to explore the best options, including how to structure the payment of commissions in a fair and convenient way.

Do you know how a real estate advisor is compensated?

Real estate advisors are not paid by the hour, nor upon completion of work performed; they only earn a commission if the closing is successful. An agent can spend days or months working with a buyer or seller, and if the transaction does not close, they are not compensated for their time.

Where is the commission amount stipulated?

It is stipulated in the listing agreement. This agreement specifies the commission percentage the agent will receive at the closing of the transaction and the percentage that will be paid to the agent representing the buyer/tenant.

The support and advice of a real estate professional are worth every dollar of the commission. Whether you are selling or buying a property, make sure to work with a real estate agent who has the knowledge, experience, and team necessary to provide you with the advice you need.

DOES THE BUYER PAY A COMMISSION?

In the vast majority of cases, the home buyer does not pay any type of commission to the real estate agent.

AS A SELLER, CAN I SAVE ON THE COMMISSION?

89% of all sellers use the advice and support of a real estate agent. Only 8% of all sellers attempt to sell the property on their own (known as For Sale By Owner or FSBO) for the sole purpose of saving the six percent (6%) commission.

However, it is important to consider:

• According to national statistics, the price achieved by a "For Sale By Owner" is 19% lower than what a real estate advisor can achieve. If you subtract the 6% commission from that 19%, the owner would achieve at least 13% more if they had the professional services of a real estate agent.

• Cost of print advertising (flyers, brochures, "open houses").

• Estimation of sales price and market monitoring.

• Screening of potential buyers.

• Coordination of showings.

• Legal implications as a seller.

• Security and time, which protects you from potentially stressful and risky situations for you and your family.

Considering that the decision to carry out a real estate transaction is one of the most important in a person's life, we recommend that you ensure you hire a professional, a real estate agent who has a team capable of providing you with the legal, financial, succession, and tax advice you need.