Selling a Home in the Iowa City Area – Real Estate Commission
How does it work with real estate commission in the Iowa City area? If you’re a first time home seller or downsizing from a home you’ve lived in for years, this is a question that will be top of your mind when you start thinking about listing your home for sale. Who pays the real estate commission and how it gets paid are always close to the top of the list of seller questions when I meet sellers new to the home selling process. I’m a licensed real estate broker in Coralville, so this article talks about what is typical in the Iowa City area real estate market.
Real Estate Commission is Negotiable
Typically there is a listing agent and their broker and a selling agent, (buyer’s agent) and their broker. That’s the standard scenario that results in a 4 way split of the real estate commission paid at closing.
Iowa law requires real estate commission is paid to brokerages, not agents. The way it works is that sellers agree on the real estate commission at the time of listing the house or condo. They sign the listing documents with a clause included that when there is a co-operating broker involved in the transaction, (the buyer’s agent) that X% will go to the selling brokerage and X% to the listing brokerage at closing. The brokers and agents in turn will have agreements in place on what percentage of the commission will be passed along to the listing agent and buyer’s agent after closing.
Every brokerage sets its own rules for handling commission and decides what the split with the selling brokerage will be. I know sellers often wonder why agents don’t negotiate with sellers at listing appointments. This is because it’s the brokers that decide on the commission rate and although real estate agents are independent contractors, they have company guidelines to follow and typically don’t have the ability to negotiate commission. As I am the broker owner at Cardinal Realty this is a good time to mention I do have the ability to negotiate commission with sellers.
Factors to Consider Before Listing your Home
The commission rate is one of the many factors that come into play when choosing a real estate agent to work with on the sale of your home. Other factors that are equally important are the ability the agent has to price and market your house or condo correctly. The fact is, if they aren’t good at pricing and marketing a home, then unless you get lucky, the chances of that agent selling your home aren’t high and a lower commission rate won’t be any help at all, since brokerages only get paid for selling homes – At closing.
A successful selling experience starts with a plan. It’s best to talk with a Realtor about ALL the aspects of selling a home – And that will include talking about commission – Before moving forward with listing your home for sale.
Are you looking for the right Realtor to help you navigate the complexities of the real estate market, all the while looking out for you and your money? Sound advice and guidance is just a phone call, text or email away. Call Denise now at 319-400-0268.