The Real Estate Agent’s Cut

As previously mentioned, the cut (or commission) that an agent takes on a property can vary depending on where you are and what arrangement you’ve made with the agency.  In North America it’s usually the seller who pays the commission and 4% of the selling price of the home is standard though this can sometimes be negotiated to 3-3.5% depending on certainly criteria like the ease of selling. If the property is hot and a good price it’s almost a sure thing that it will sell and therefore require less work on the part of the agent therefore they may agree on take a smaller commission.

Please note that some major agencies like Remax and Century 21 for example may have a very strict policy about their commission rates and may not want to negotiate this. If you push the matter they may choose not to represent your property. It’s good to know who you are dealing with and how flexible they are before negotiating. For this reason many people prefer to deal with smaller, independent agents that may be more flexible about their personal cut.

Unlike America, in Europe and especially the U.K. both the buyer and the seller pay a commission to the agent. This is usually 2% on both ends. This way the agent still gets their 4% but it is split among the buyer and seller to make it more affordable. Again, if the seller is sitting on a hot property they may be able to negotiate a cheaper rate of 1-1.5% just because it’s a sure thing that the agent will get the full 2% from an interested buyer. Like just about everything in life, it’s always negotiable.

It’s important to find a friendly, honest agent you feel comfortable dealing with. You may be spending a lot of time with them so be sure you like them –it’s the most important tip to consider.