One question on everyone’s mind when they are buying or selling a home, is “how much will the commission be”?
Georgia Real Estate Commissions
While rules may vary from state to state, in Georgia, there are no “fixed” commission amounts or percentages that you must pay. Instead, the percentage that will be charged by a real estate broker is negotiated between the seller and the real estate broker when the listing is agreed to. In Georgia, real estate commissions are defined as a percentage of the sales price of the home being sold.
How much the commission will be depends on a number of factors such as: the agent, experience, location, level of service and more. The commission is meant cover the costs of hiring a listing agent, marketing and listing the home, taking photographs, organizing and conducting open house, arranging buyer tours, contract management and more. When negotiating the commission for the sale of your home, you should carefully inquire into the agent’s marketing plan as well as how his/her commission is structured.
Don’t be surprised, however, if you don’t get a rate lower than, or much below, the usual 3% despite your best negotiation efforts. Many of the best real estate agents will not deviate very far from the generally acceptable percentage because, after all, “you get what you pay for.”
Generally speaking, it is the seller of the home who pays all the real estate commissions associated with the real estate transaction.
When the seller and listing agent agree to and sigh the listing agreement, they will finalize the commission rate. Later, at closing, the agreed upon rate will be split between the listing agent and the selling agent.
However, it is the seller, not the buyer, who pays the commission. The price of the real estate agent’s commission will be deducted from the sale price of the home at closing.
On the other hand, keep in mind that real estate agents don’t get paid until closing and they work strictly on commission. This may mean that if you are a buyer and you do not buy a home after all, despite all the time spent showing you homes and negotiating offers for you, you will not owe your agent a commission. But be careful here: if you sign a buyer-broker agreement, be sure to read the terms and conditions, because they could stipulate that you will owe the agent compensation in the event that you make an offer with another broker.
If you are a seller and the home does not sell, you only pay a real estate agent’s commission when escrow closes and your home sells. Typically, the agreement you sign with your agent will have a specific time period in which the agent has the time to sell the house. If the contract expires and the home has not sold, you are not required to pay the commission.
Helping You with All Your Real Estate Transactions.
Since 2001, the attorneys at the Law Offices of Mark Weinstein, P.C., have been helping people in the state of Georgia with all their real estate needs. If you have a real estate issue, call us. We serve clients in Atlanta, and in a number of counties throughout Georgia, including: Clayton County, Cobb County, Dekalb County, Douglas County, Fulton County, and Paulding County, among others. Call us at: 770-888-7707. Or you can contact us here.