Is my real estate agents commisson included in closing costs?

Question

I'm looking to buy a house and have a prospective real estate agent. He said his commisson rate is 6%. I was told by someone else my closing costs would be about 6% of the purchase price. Are they the same thing? If my house is 200,000$ then I would need 12% (24k) to cover closing cost and real estat agent commisson fee? Is that right?

Answer 1

Closing cost are a seperate cost from comission. It covers title search, inspections, taxs if any due,ect. The commission is usally paid by the seller out of the price paid for the house, but not always, that too is negotiable. And if you where a good buyer you would tell the agent 3% only saving the seller some cash, other wise he may increase the purchase price, which he has every right to do. In my opinion real estate agents are like used car salesmen. I have NEVER met one that ever did anything for there client. And I have sold a few homes in my time. I have even fired a couple because they kept putting off things I would tell them to do.
Remember they work for you, do not be intimidated by them, make them work for there money. That means they should be given you a constant update on the search progress at least once aweek. As a seller they need to be given you updates on potential buyers. And be very wary of an agent that says he has a guy that will do inspections for you, or apprasials, that is not ethical. You need to find your own. I had one agent use his inspector and it cost me because he didn't do it right and the buyer insisted on another inspection. I took it out of the comission to pay the new inspector.
Just be careful, they just want to make a buck they don't care about you.

Answer 2

The seller pays that fee. The seller lists a house - the listing agent gets a percentage and the agent that brings the buyer gets a percentage of the that 6%. If you buy the house using the agent that listed it, the whole 6% goes to that one agent (a portion also goes to his broker, but that doesn't concern you). So the seller may list for $200,000. but he is only getting $188,000. less his portion of closing costs. That is why some people try to sell on their own, but that does not mean you are saving the commission - it just means the seller doesn't want to pay it. Unless you really know the market and know your house values, a TRUSTED real estate agent is a good idea.

Answer 3

i am not sure why someone told you that your closing costs would be around 6%.

i mostly want you to know that all commissions are negotiable between buyer (or seller) and the broker they choose. if the fee were ALWAYS 6% (on houses/residential), then that would be called price fixing, which is against the law.

no, closing costs don't include the commish. the 6% buyer broker fee is for representing you as a buyer, negotiating on your behalf, advising you of any seller secrets she can gain so that you are in a better negotiating stance and pay less, and/or gain something that you wouldn't get normally unless you had inside information, and advising you on finance.

i think that a buyer's broker fee of 6% is high. even when my exclusive buyers hire me to negotiate for a piece that is not on the market but that they want, i would not charge them anything more than 2.5 or 3.0% of the sale price.

a seller usually pays somewhere around 6% as a listing and marketing commission. just maybe i'd take a portion of that from the seller's broker, but i doubt it. if i am paid by my buyers, why should i take part of the seller fee? i feel that in doing so, it could be a conflict of interest issue.

in addition, in this circumstance where you are paying your buyer broker, probably the seller's broker would take a 50% cut, which would then give him a 2.5 or a 3% commission.

in addition to the buyer's commission, you will have, at least, title insurance fee, real estate attorney, and/or some or all of the transfer stamps that your state, county and/or municipality charge. possibly, whoever mentioned that closing cost of 6% meant these costs.

both buyer and seller have separate closing costs. for example, the buyer will pay a homeowner's insurance policy for the date of closing for at least one year forward. buyer might pay points on his mortgage. the seller MIGHT pay some for you.

at closing, there are prorations in debits and credits for all of the things that each party is responsible to pay, like lender's fees, water bill, real estate taxes (your share starts the date of closing).

ask your real estate attorney about any other costs. GOOD LUCK!!!

Answer 4

Closing costs are a whole different ball of wax compared to the real estate commission. Buyers do not pay commissions. Sellers pay for the service of an agent. Closing costs are just that--escrow fees, title searches, transfer taxes- the list could go on but I am sure you get the picture. Seek the advise of a REPUTABLE REAL ESTATE AGENT . Closing costs are typically 3% of the purchase price.

Answer 5

As a buyer you do not pay the agents fee. It is paid by the seller.

Closing costs are typically 1 - 3% of the value of the home.

Answer 6

Commissions are paid by the seller to the broker who lists the property for sale. That broker then offers the property for marketing purposes to other brokers and offers them to split their commission with any broker who brings them a buyer that purchases the property. The only time you, as a buyer would have to pay a commission is if you sign an exclusive buyer's agency agreement with a broker in where the only compensation that your broker will receive will come from you.
As to closing costs here is a complete explanation what closing costs are
The HUD-1 closing costs form explained: http://www.alta.org/consumer/hud1.cfm
and this one
HUD Revised Borrower’s Closing costs guidelines: http://www.hudclips.org/sub_nonhud/cgi/nph-brs.cgi?d=MLET&s1=06-$[no]&op1=AND&SECT1=TXTHLB&SECT5=MLET&u=./hudclips.cgi&p=1&r=23&f=G
Before you sign any loan papers you should receive a good faith estimate of what your costs are going to be here is an explanation of that
HUD Sample of Good Faith Estimate: http://www.hud.gov/offices/hsg/sfh/res/resappc.cfm
The rules and laws as it relates to closing costs can be found in the following link;
Real Estate Settlement Procedures Act (RESPA) [about closing costs & settlement procedures]: http://www.hud.gov/offices/hsg/sfh/res/respa_hm.cfm
Then finally here is a general information link on buying homes
Buying a home an article from AARP: http://www.aarp.org/money/wise_consumer/financinghomes/a2004-02-18-BuyingAHome.html
Buena Suerte

Answer 7

It is not allowed in most states. That being said, it would be rather stupid for an agent to agree to such a request, given that closing costs would wipe out most or all of the commission earned. I'd never agree to such a request, even if it were legal in my state.

Answer 8

you should not have to pay the Realtors fees, the seller does, and if hes is trying to get you to pay it turn him in and go with someone else!!!