When you're shortlisting potential agents to help you sell your property, one of the most important deciding factors is their costs. There are two key agent costs to consider – fees and commission.
Generally, the fees involved when hiring a real estate agent are designed to cover their costs for advertising and marketing your property, while their commission is a percentage of the sale price that they get for your property.
The average commission real estate agents charge varies between states and between metro vs. regional areas – the lowest is about 1.6% and the highest about 4%. Across the country the average charge is around 2% to 2.5% of the sale price of your home, or from $10,000 to $12,500 when selling a $500,000 house. Marketing costs usually come on top of this, and can also vary a lot – from around $500 into the thousands – depending on how far you want to reach and how diverse you need the advertising to be.
But agents don't all structure their fees in the same way. Some include the cost of advertising in the commission and quote a higher rate, while others will use a ‘sliding scale' or ‘tiered' commission, say 2% on the first $860,000, and 5% on anything above that, which acts as an incentive to work harder for a higher sale price (a practice quite common on more expensive properties).
Use our commissions calculator to estimate how much commission you'd be paying on the sale of your home.