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One of the questions our clients have been asking lately is whether or not they are responsible for paying their Realtor a commission. Good news, if you’re buying a home, you’re off the hook. Many buyers are surprised to learn that real estate commissions come from the “sell side” of a transaction.

Let us explain how real estate commission works.

First, let’s take a look at the difference between a Real Estate Agent and a Real Estate Broker.

Real Estate Agents are self-employed and work under the license of their particular brokers.

Real Estate Brokers are licensed to own and run a real estate brokerage and can hire and mange other real estate agents. They represent clients who are buying or selling real estate. All fees paid to a Real Estate Agent must first pass through the broker.

How much is Real Estate Commission?

The commission owed on a particular real estate transaction is sometimes a flat fee, but is usually the percentage of a sale price and is typically no more that 6%.

For example, say a home sells for $300,000 and the seller’s listing agreement indicates a 6% commission, then the total amount owed is $18,000.

So, who pays that money and to whom?

When someone sells their home using a Realtor, they are responsible for paying the commission out of the proceeds of the transaction. The buyer does not pay. Instead, the buyer’s Realtor is compensated by the listing agent’s broker by splitting up the commission paid by the seller.

There are some exceptions, but all fees usually come out of the sellers’ proceeds while buyers generally pay nothing to the agent who represents them.

Who’s Involved in the Deal?

  • Seller
  • Listing broker
  • Listing agent (represents seller and lists the home on the market)
  • Buyer
  • Buyer’s broker
  • Buyer’s agent (represents the buyer, gets paid from the listing broker’s commission split)

Take a look at this example here to get a better idea of how commission fees are split:

Note: Actual commission amounts and agency/agent splits will vary by transaction

Still have questions on how commission fees work? Contact us today!

We are happy to answer all of your questions!

Fill out the quick form below and one of our Loan Officers will get back to you shortly.

Are you a first-time homebuyer? Download our FREE “Guide To Buying Your First Home". Inside you’ll find everything you need to know about the mortgage process, how to get your house in order, first-time homebuyer programs, handy checklists and so much more!


For the Week Ending February 22, 2019

 

Please enjoy this quick update on what happened this week in the housing and financial markets.

 

 

The unsecured personal loan market hit an all-time high last year, reaching $138 billion. A rise in lending from fintech firms is helping to fuel the borrowing frenzy.
Minutes released from last month's FOMC meeting show the Fed is likely to hold off on policy rate increases in 2019 and may slow balance sheet reductions too.
Jobless claims fell last week, down 23,000 to 216,000. But the 4-week average rose to a 1-year high, suggesting the labor market may be slowing down slightly.

 

Homebuilder sentiment rose in February after falling at the end of 2018. Lower mortgage rates and continued job market strength have boosted optimism.
January's existing home sales were at their lowest level in 3+ years. Sales were down 8.5% from a year ago, continuing a loss of momentum in the market.
January's median price for all housing types was up 2.8% over a year ago, at $247,500. At January's pace, inventory will be exhausted in 3.9 months.

Rate movements and volatility are based on published, aggregate national averages and measured from the previous to the most recent midweek daily reporting period. These rate trends can differ from our own and are subject to change at any time.

 

 


Greenway Mortgage offers a refinance program for homeowners with low to no equity. If you, a friend or family member find yourself in a difficult equity position, consider a High LTV Refinance Option. 
 
The high loan-to-value (LTV) refinance option provides refinance opportunities to borrowers with existing Fannie Mae mortgages who are making their mortgage payments on time, but whose Loan to Value (LTV) ratio for a new mortgage exceeds the maximum allowed for standard limited cash-out refinance options.
 
If your home is able to qualify for this refinance program, you could enjoy these benefits:
  • Lower Mortgage Payments
  • Lower Interest Rates
  • Shorter Loan Term
  • Switch from Adjustable Rate Mortgage (ARM) to a Fixed Rate Mortgage
  • Private Mortgage Insurance (PMI) may be transferred or not required at all. (If PMI exists on current loan, it must be transferred to a new loan. If no PMI exists, it may not be required).
Important Program Features
A great feature about this program is that there is streamlined documentation mandates for income, employment and assets. Appraisals are typically not required. In order to qualify, borrower’s must have made 12 payments on their loan being refinanced and it cannot be used to refinance a HARP loan.
 
What property types are eligible?
All property types are eligible including investment properties under this program.
 
For more information on this program click here.
 
The Bottom Line
If you’re having trouble with your mortgage and owe more than your home is worth or you have almost no equity, you might be able to refinance with this program. Think about all that you could save by paying much less on your monthly mortgage payment. Don’t hesitate to speak with a Greenway Mortgage Loan Officer today and see if you will be eligible. (908) 489-4658 
 
 

For the Week Ending February 15, 2019

 

Please enjoy this quick update on what happened this week in the housing and financial markets.

 

 

Producer prices fell for a 2nd straight month in January, leading to the smallest annual increase in 1-1/2 years. Low or absent inflationary pressure is good for interest rates.
Retail sales recorded their biggest drop in 9+ years in December as receipts fell across the board, suggesting a slowdown in economic activity at the end of 2018.
Jobless claims rose last week, pushing the 4-week moving average of claims to its highest level in just over a year & suggesting some moderation in job growth.

 

Most markets across the country are still seeing home prices inch up, although at a slower pace than in previous quarters. The national median price is $257,600.
The home theater is moving out of the basement and into the main living area. Home theaters are being replaced by comfy, cozy multifunctional media rooms.
A new report shows that only 13% of offers written by agents for their clients faced a bidding war last month—down significantly from 53% a year ago.

Rate movements and volatility are based on published, aggregate national averages and measured from the previous to the most recent midweek daily reporting period. These rate trends can differ from our own and are subject to change at any time.


For the Week Ending February 8, 2019

 

 

Please enjoy this quick update on what happened this week in the housing and financial markets.

 

 

Mortgage rates have shown more volatility from day-to-day recently. Overall, rates have hovered at recent lows.
The rate of retail sales growth is expected to slow in 2019 amid cooling economic conditions. Still, retail sales are forecast to rise between 3.8% and 4.4%.
The U.S. trade deficit dropped 11.5% in November, falling for the first time in 6 months. The decrease in imports followed 5 straight months of increases.

 

The recent drop in mortgage rates has helped spark greater demand for housing. Many buyers are out shopping, hoping for a quick deal before rates rise.
Data shows luxury house flipping has risen in several markets throughout the nation. However, it's still low relative to the years before 2008.
Freddie Mac says 1.6 million fewer homes are on the market than expected as more of today's seniors choose to age in place.

 

Rate movements and volatility are based on published, aggregate national averages and measured from the previous to the most recent midweek daily reporting period. These rate trends can differ from our own and are subject to change at any time.

 


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