How commissions are typically structured
In many markets, seller proceeds fund the total commission paid to brokerages involved in the transaction. Portions are then split across listing and buyer brokerages and their respective agents. Exact structures vary by market, brokerage, and contract.
Key takeaways:
- Commission rates aren’t fixed by law; they’re negotiated and can vary.
- Credits and concessions (when allowed) can reduce your cash at closing.
- Service quality and negotiation skill matter as much as the fee itself.
What first-time buyers should ask
If you’re comparing agents, ask how they structure their compensation and whether they offer buyer credits or reduced fees where permitted. Also confirm their approach to negotiation, showings, and timelines.
- Can any portion be credited toward closing costs (subject to lender limits)?
- What’s included: showings, offer strategy, repair negotiations, escrow guidance?
- How quickly will you respond during offer and inspection deadlines?
Lowering total cost without losing advocacy
The goal is value: competitive pricing and strong representation. Be wary of deals that lower price but reduce availability or negotiation support. The right balance often saves more overall.
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*Informational only; not legal, tax, or financial advice. Availability of credits/discounts varies by market, lender guidelines, and individual agreements.