Who Pays the Real Estate Commission in Utah?
Real estate commission in Utah is always part of a transaction in
buying or selling homes in Provo, Utah if you use a Realtor. But
who actually pays this real estate commission? The technical
answer would be the real estate broker. However, the money comes from
the sellers side of the transaction. Let me explain.
Real estate agents in Provo work for a real estate broker. Their are two types of brokers in Utah. A principal broker and an
associate broker. The principal broker is typically the owner.
Thus, it is the broker who transacts with a seller regarding the listing
agreement and it is the broker who pays the agent his fees. A Realtor
works in behalf of his broker when securing a listing.
It is only the broker who can pay the real estate commission. A
Realtor can not accept money directly from a Buyer or Seller or they
could lose their real estate license. In short, a seller pays a
broker and the broker pays his Realtors a real estate commission.
How Commissions Work in Utah County
Commission percentages vary greatly between the new and under
performing Realtors in Utah County and the top selling or best
performing agents. New Realtors can be paid around 60 percent of
the total commission that is received by the brokerage they work for.
Other expenses may still be charged such as advertising fees, office
fees, signage fees, errors and ommission insurance, technology fees and
other office expenses. This means that the Realtor will net less
than 50% of the total commission for his work after all the fees are
paid.
The top selling agents in Provo can command up to 100% of the
commission. They will just have to pay their brokerage some sort
of desk fee which they have agreed to earlier. Paul worked for Remax
International for over 10 years. In fact, Paul owned the Spanish Fork
Branch for several years with a few partners. Remax charges agent around
$1000 per month and the agents then receive 100% commission on their
sales. If you are not selling homes on a regular basis this fee can add
up quickly over the months.
Negotiable Commission Fees
Commissions are negotiable. Some people pay 6% commission while
others may pay 5% or 4%. We are seeing some brokerages charge a
flat fee without services then posting homes to the MLS for a 3%
commission. Commission is between the seller and the Realtor.
The amount of commission is not fixed or standard like many people
assume. If you get a low commission you may be also getting no
marketing and a Realtor that is not on the job. Be careful and
choose a Realtor you trust and get the services you want for a
commission you want.
Sellers Pay the Real Estate Commission
The seller in Provo UT is the one who pays the real
estate commissio to the
broker and the real estate agent under the buyer’s broker agreement. This means that if the brokerage firm operates at a 3% real estate
commission, this amount will be added to the total payment that will be
charged on the HUD statement at the closing table.
However, in some instances, listing brokers in Provo might offer real
estate commissions lower than that charged by the buyer’s broker.
In this situation, the buyer might end up being the one paying the
deficient amount. For example, for the brokerage firm that
operates at 3% commission, if the listing broker only pays 2.5%, the
buyer will be left to pay the remaining 0.5%. There are instances
though where the buyer’s broker will waive the 0.5% so the buyer will no
longer have to pay it.
The Buyer Pays the Real Estate Commission
Some say that the buyer ends up paying for the real estate
commission. This is because the commission is usually already part
of the sales price that the buyer sees. The seller or the broker
includes this amount in the price of the property that will be listed.
As you can see some say the seller pays the real estate commission,
some say the buyer pays the real estate commission. Legally the state
says the principal broker pays the real estate commission. Who do you
think pays the real estate commission?
Consider hiring Team Teasdale Realty to represent you when buying a
home in Provo or anywhere in Utah County.
Homes for Sale in Provo Utah
