Buying or selling of property seems like a straightforward process of identifying the best choice and making payment. Real estate investments are unfortunately not this easy. There are various professionals needed at different steps of the transaction to guarantee it meets set regulations.
One of the key professionals in real estate transactions nowadays is a real estate agent. This expert will generally act as the mediator between sellers looking for the best buyers and buyers looking for the best property.
When selling your property, you should get property solicitors in Townsville to draft the contract between you and the real estate agent you use. This contract contains among other elements the method of payment of the real estate agent.
While you might see no essence of the solicitor, different states have legal stipulations on how real estate agents are paid. Without a lawyer for your contract’s drafting, you might choose a payment structure that is not legally enforceable in your state.
The following are some methods of compensation for real estate agents.
The Traditional Agent-Broker Commission Split
Here, the real estate agent will be paid a set percentage of the gross amount of a transaction. Here, the seller or buyer will not be charged.
Instead, the amount you pay will be set by the broker who will then split the cash based on certain percentages with the agent. In most cases, the percentage of the split will reflect the services provided by a broker or the business volume an agent will bring in.
The 100% Commission Split
Here, the agent gets 100% of the commission from your transaction since they pay a monthly office or ”desk” fee. Although this can be a high amount, it will give you exceptional service since there are not too many people involved in your property’s purchase. In fact, it might be cheaper than the traditional commission split since only one person is being paid.
Referral Fees and Agent Split
The referral fee is a cost paid from one company to another for sending clients either as sellers or buyers of property. Consider, for example, you moved to an area where brokerage firm A operates, but you are selling a home in a location run by brokerage firm B.
Here, firm A can refer you to firm B. In this case, firm B will pay firm A a set percentage in referral fees from your transaction from what they deduct from their fees.
Real Estate Franchise Percentage
Some major franchise property agents will charge a commission to their franchisees for their brokerages. The fee is normally a percentage of the commission you will pay the agent when selling your property.
In most instances, franchisee agents will charge you a seemingly higher cost to make profits with this model. You are however assured of an optimal service since they are maintaining a brand’s reputation.
The above payment models might seem overwhelming for an average property seller. Working with a lawyer introduces an expert’s input to guide you on the type of model you should choose for your property’s sale. This way, you can settle on a compensation model that assures you of a quick yet profitable property sale.