How Much Does It Cost to Hire a Real Estate Agent? A Straight Answer.

The short answer is that it depends on what you agree to in writing. Real estate commissions are not set by law, and they are fully negotiable. Here's how compensation works today in the Treasure Valley, so you can decide based on real information instead of rumors.

For buyers, it's agreed on in writing, up front

Before touring homes with a buyer, an agent will ask you to sign a written buyer agreement. It states exactly what the agent's brokerage will be paid, in a clear dollar amount or percentage. The agent can't receive more than that amount from any source.

How that compensation gets paid is part of the negotiation. A seller may agree to cover some or all of it, the buyer may pay it, or it may be a combination of both. Whatever is agreed, the buyer knows the terms before writing an offer, so nothing is a surprise at closing.

For new construction, many builders offer compensation to buyer's agents, but it varies by builder and by community. An agent should confirm the builder's terms in writing before the buyer commits.

For sellers, it's set in the listing agreement

Sellers agree on a commission in the listing agreement, and it's typically paid at closing from the sale proceeds. The amount is negotiable. Sellers also decide whether to offer compensation or concessions to a buyer's agent, and an agent can walk through how that choice may affect the sale.

The question that matters isn't just the percentage. It's what you get for it.

What you get for it

The value shows up in the details. An agent brings a pricing strategy built on real sales data, which matters in Idaho because sale prices aren't public record. An agent also brings a marketing plan that reaches the right buyers, negotiation on the terms that matter, and management of inspections, appraisals, and deadlines so the deal actually closes. The right agent is also a real person who answers the phone when the process gets stressful.

Questions to ask before you sign

Whoever you hire, ask these questions first.

• How is your compensation structured, and is it in writing?
• Who do you represent in this transaction?
• How will we communicate?
• What happens when a deal gets hard?

The right agent can answer all four without a script.

The bottom line

Compensation is always negotiable, and it should always be clear in writing before you sign anything. Whether you're buying or selling, you deserve to know exactly what you're paying for and who's working for you.

This article is for general information only and is not legal or tax advice. Compensation terms are negotiable and are set by the written agreements in each transaction.

Written by Misty Fisher, REALTOR®, Idaho Wish Real Estate | Point Realty