Real estate agency percentage

Real estate agency percentage: what is the right commission to pay?

Do you have to sell or buy a house and you are still undecided whether or not to rely on a real estate agency? Your doubts depend above all on the fear that choosing to use a real estate broker could cause costs to rise excessively?

So let’s try to shed some light on this to understand the percentage of the most suitable real estate agency to pay.

What is the role of the real estate agent?

That the real estate agent has the task of facilitating the meeting between seller and buyer is clearly known.

But perhaps it can be useful and interesting to find out in a little more detail what the duties of a good real estate agent are.

First of all, the agent must carry out continuous and incessant research work, in order to identify the most suitable properties to satisfy the requests of those who would like to buy and, vice versa, find potential buyers on behalf of those who would rather sell.

Parallel to this research work, there is a whole world made up of careful market analysis, aimed at always identifying the most correct property valuation, so as to simplify the meeting between supply and demand, with satisfaction on both sides.

The time taken by the real estate agent for each individual case is not indifferent: various marketing operations, visits to properties to be sold, accompanying any interested customers, contacts with other agencies for any work done in collaboration (where necessary), updates of own knowledge in the economic, fiscal and legal fields, handling of all paperwork at the bureaucratic level and so on. All this, always taking care to manage every situation, even those that are sometimes a little more complex, with professionalism, competence and, last but not least, courtesy.

It is evident that all these services must in some way be paid, and this happens through what is commonly called commission. Let’s see what the current situation is and why, despite everything, it can still be convenient and convenient to contact a real estate broker.

Commissions and when to pay them

Generally, the commissions payable to the real estate agency correspond to a percentage of the final price of the property: in principle, the sum is paid both by the seller and by the buyer, precisely as proof that the role of the real estate broker must be as neutral as possible.

There are no fixed percentages in this regard, much depends on the regions, sometimes on individual cities or even on specific areas. On average, the most common percentages are around 2-3%, but there may be cases in which the percentage is lowered or other cases in which it rises significantly in level.

And when, exactly, do you have to bear the costs related to the real estate agency? The rule requires that, usually, the commission is paid at the end of the negotiation, but not necessarily waiting for the actual contract stipulated in front of the notary ( deed ) to be reached: usually, the agency is paid already when it arrives to the so-called preliminary contract between the parties. It is clear that, until that moment, the role of the mediator must be absolutely active, the client must be accompanied step by step.

Compensation to the real estate agency when buying

When it comes to buying a house, for example, the average fee to be paid to the real estate agency could be around 3% . In this way, you go to pay a reasonable price to have certain services from the agency itself in exchange:

  • Verification of the conformity of the property at cadastral, urban and mortgage level
  • The absence of pending charges on the property or on the seller
  • The existence of an adequate and consistent selling price for that type of house

The percentage of the commission, however, can even go to zero in some urban contexts in Italy, where distorting dynamics occur on the basis of which the offer is far higher than the demand: in these cases, we try as much as possible to encourage and intrigue a higher number of potential buyers.

On the contrary, the costs of the real estate agency can rise up to 6-7% if the latter has to load everything on the buyer: this usually happens in places characterized by very strong demand, where therefore perfecting a sale is theoretically much more simple. In these cases, the negotiation margin is very low and it is undeniable that there is an increase in costs for the buyer.

In recent years, realities have also appeared on the real estate market (usually online) which, in the face of a series of services offered remotely, can guarantee fixed and lower prices than the average: this is the so-called “fix price” system, certainly an interesting opportunity to take into account these times.

Real estate agency fees when you have to sell

Let’s see now, however, what are the commissions provided for anyone who wants to sell their home and intends to do so through the intermediation of a professional.

Also, in this case, the amount of the commission can vary considerably for various reasons, however, in principle, it is around 2%, against a certain number of services received in exchange. The counting of how much a real estate agent makes, therefore, is easily done.

So what should the real estate broker do once a contract has been signed with the agency?

  • Play a role as a “director” to achieve the final goal, that is to say, the sale: he must therefore extricate himself from the various actors involved, such as a possible surveyor, condominium administrator, potential buyers, etc.
  • Replacing the seller for everything concerning the bureaucratic part: drafting the preliminary contract, registering it and so on.
  • Mediate between buyer and seller, even in the most critical circumstances
  • To incur costs, usually upstream (therefore even before having collected), to give visibility to the property to be sold on the various channels (digital platforms, etc.).

Even in the event of a sale, distortionary dynamics can occur where there are particular situations. If, for example, the demand in that area is significantly greater than the supply, selling is easier and therefore the percentage for the seller can drop until it is completely cancelled out.

If, on the contrary, it is the offer that far exceeds the demand, then the mediation and interception effort of potential buyers will be greater and will require a higher remuneration: in these cases, the commission can rise up to 3% and beyond.

Even for those who sell, there is always the “fix price” option in case you want to rely on a slightly more alternative and decidedly digital real estate reality.

What are the commissions in case of rent?

Let us now consider the hypothesis of a property to rent. Actually, that on the rent system is a mediation operation that does not represent an activity with high added value, and it is precisely for this reason that it is not part of the so-called core activities, i.e. main, of the real estate agent. .

In the rare cases in which the real estate agent finds himself managing a lease, his remuneration will be approximately equal to 10-15% of the first annuity and his duties will mainly be:

  • Manage appointments with those interested in viewing the house
  • Skim off potential tenants, discarding those that are apparently poorly indicated
  • Check the financial position of probable candidates: CRIF (bad payers) verification, insurance, etc.

Since this is a rather different system than that of the buying and selling market, in recent years various companies specialized exclusively in the real estate rental sector have arisen: these realities are therefore able to offer more targeted services and greater efficiency.

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