People who have never had the experience of hiring or working for a firm that does real estate services in Mississauga may not be familiar with the way real estate agents make their money. Therefore, they may be leery about hiring one to help them find their new home in Philadelphia or sell their current Philadelphia home. If you're one of these people, this article on real estate commissions should help explain how much you can expect to pay in commissions and where that commission money goes.

While some real estate agents may work on a fee for service basis, the vast majority of agents work for a commission, which is a percentage of the purchase price of the home. So if the price of the home is $100,000 and the real estate agent's commission is 5%, $5,000 will be going to the real estate agents. Commission rates are different depending on whether you're hiring a London, Ontario real estate agent or a Philadelphia agent. They can even be different between two agents working in the same town.

Since the commission is charged as a percentage of the sale price, even though it is the buyer's money it is actually the seller that is taking the hit on commissions, because that $5,000 isn't going into their pocket. When you negotiate the price of the home with the seller, it's understood that the real estate agent's commission is included. This is true whether you're using a Richmond, Virginia real estate agent or an agent here in Philadelphia. So if you're a buyer, you don't have to worry about commissions. It's the seller who has to take it into consideration.

There are generally two real estate agents working on the sale of any given home - the seller's agent (also called the listing agent) and the buyer's agent. Both agents have to be paid, of course, so the commission is split between the two agents. If you're selling your house and you interview an agent with a 6% commission, this means 3% is going to him and 3% is going to the buyer's agent. Just like you can negotiate your interest rate when you're applying for commercial mortgage lending, you can also negotiate your commission rate with your agent, so don't take the advertised commission as given.

If $15,000 in payment to sell a $300,000 house seems like a lot to you, remember that this is the only way agents get paid. This fee covers things like advertising, paperwork, transportation - basically everything that needs to be done, and agents don't exactly sell a house a day. Additionally, if your real estate agent in Kingston, Ontario works for an broker or a franchise, a portion of the commission goes toward running the office.