Are you thinking about buying or selling real estate and wonder what the cost is going to be? In this video, I’m going to show you how much it costs to buy and sell, especially when you’re working with a realtor. We’ll look at the bottom-line numbers so you know exactly what you can expect to pay.

Common Costs When Buying Real Estate

The first thing we're going to talk about is the cost associated with a real estate agent when you're buying a property. The good news is that most of the time there'll be nothing out of your pocket. Inf act, over 85% of buyers work with a real estate agent when purchasing a property.

When a seller lists their property on the multiple listing service (or MLS), they're offering to pay a buyer's agent to bring them a buyer to purchase their home. The listing agent offers a portion of the commission that they've negotiated with the seller to the buyer's agent to bring them a qualified buyer. So most of the time, there is no expense to a buyer when working with a real estate agent.

Unless the real estate agent has an additional fee that they charge you, they'll come out of your pocket. The main job of a real estate agent on the buyer’s side is to make sure you make a good decision and are properly represented. So while you're not paying for your real estate agent out of pocket, they're also not working for free.

Costs When Selling

On the flip side, when you go to sell your property you should hire a listing agent. For that service, there is a charge. Let me break down how that works.

When you hire a listing agent, they'll offer a portion of their commission to the buyer's agent to bring them a buyer. Most sellers want to be on the MLS because it's going to expose them to the most buyers. It doesn't make sense not to be on there. The portion that the listing agent keeps of the commission goes toward their expenses for facilitating the sale of the house. It also pays for all the marketing expenses associated with getting your house out there in front of the most eyes.

Generally, most of these expenses are front-loaded when the listing agent goes to sell your house, so they have skin in the game. If your house doesn't sell, they will lose all the money they spent on marketing and other expenses. Some of those expenses can be videos, professional photos, being in premiere placement on fancy websites, virtual tours, Facebook ads, print marketing, and the list goes on and on.

Knowing Your Numbers

I hope this gives you a good baseline idea of how commissions work when buying or selling a home as well as who's expected to do what.  If you have any additional real estate-related questions at all, I would love to be a resource. Make sure to reach out and I’ll be happy to connect!

You can also subscribe to my channel so you never miss an episode of great real estate content. See you next time!