How is a realtors commission paid the 6% rate when you are selling a home, out of pocket?
Answer:
Your real estate agent's commission is deducted from the sales price like everything else. What's deducted from the sales price is:
1. Commission to Realtor
2. Title Fees
3. Settlement Charges
4. Balance on any existing mortgages or liens (including federal and state income tax, child support, etc. )
5. Filing Fees (recording releases, etc.)
6. Repairs (if required as part of your contract- a termite report, for example)
7. Any other costs you may have agreed to as part of the sale
8. Property taxes
The only time you would have any out of pocket costs would be if what you owe exceeds the sales price.
Your closing agent will provide a Closing Statement or a Final HUD-1 Settlement Statement which will itemize all items paid at closing.
The Realtor is paid at the closing of the house sale. The money comes out of the proceeds of the sale. You do not pay them up front, and they do not get paid if the property does not sell.
3% is paid to the the buyer agent, and 3 to the seller agent. This comes out of the sale price of the home paid by the seller. If you house gets sold, i don't think 6% off of the selling price would kill you.
When you say " I cant really afford to pay 12,000.00 out of pocket to a realtor. Does that get financed in my loan?" what do you mean? the loan for buying your new home?
It would take real long to explain how it works here so you best read up on it.
All HUD handbooks: http://www.hudclips.org/sub_nonhud/cgi/h.
U.S. Department of Labor Bureau of Labor Statistics job descriptions: http://www.bls.gov/oco/ocos120.htm.
Real Estate Settlement Procedures Act (RESPA) [about closing costs & settlement procedures]: http://www.hud.gov/offices/hsg/sfh/res/r.
Calculator to compute an estimate of the total cost of closing: http://www.myfico.com/loancenter/mortgag.
Real Estate Licensee information for all states: http://www.usarealestatelicense.com/.
Real Estate Commissions Contact information all states: http://www.actwebservices.com/state-agen.
And this one. This one is my favorite.
Burying old St Joseph to sell your home: http://www.snopes.com/luck/stjoseph.asp.
Buena Suerte
No, the commission comes out of the sale of the house when escrow closes. 3% to the broker, 3% to the agent who sells it. Or if your realtor is the broker/agent, he/she would get all 6%
I am not sure if your buying or selling your home. First the 6% is negotiable. It is then paid at the closing and you would not be required to pay anything out of pocket unless the proceeds are not enough to pay off the mortgage, taxes, etc. Then you would be responsible for paying the agents commission out of pocket. If you are buying a home then the seller pays the commission to the agent and you really don't need to worry about it.
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