If you’re planning to buy or sell a property in Arizona, you may have heard the term “real estate commission” tossed around. But what exactly does it mean, and who pays for it? In this blog post, we’ll explain everything you need to know about real estate commissions.

What Are Real Estate Commissions?

Real estate commissions are fees paid to real estate agents or brokers for their services in buying or selling a property. In most cases, the commission is a percentage of the sale price of the property, and it’s typically split between the agent representing the seller and the agent representing the buyer.

Real estate agents and brokers work on a commission-based model, meaning they don’t get paid unless a sale is completed. The commission they receive compensates them for their time, expertise, and marketing efforts in helping to sell the property.

Who Pays Real Estate Commissions?

Typically, the seller pays the real estate commission, which is deducted from the proceeds of the sale. The commission is usually a percentage of the final sale price, and it’s agreed upon in advance between the seller and the listing agent.

The commission is then split between the listing agent (the agent who represents the seller) and the buyer’s agent (the agent who represents the buyer). The percentage split varies depending on the agreement between the agents and the brokerages they work for.

It’s worth noting that the commission is negotiable, and there’s no standard rate that all agents or brokerages charge. However, the commission rate is usually between 5% and 6% of the final sale price, although it can be higher or lower depending on the market and the specific circumstances of the sale.

Conclusion

Real estate commissions are a standard part of buying or selling a property. They compensate real estate agents and brokers for their services and expertise, and they’re typically paid by the seller as a percentage of the final sale price. If you’re planning to buy or sell a property, it’s important to understand how real estate commissions work and to negotiate a rate that works for you.

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