Paying Real Estate Agents

Every reputable real estate agent will ask you to sign an agreement in which his/her fee is indicated. Some agents take a percentage from the buyer and the seller, some will take only from the seller and others from the buyer. Percentage is 1 to 2% to give you some idea of the fee.

In Texas, commission is very standardized and only varies in extreme cases or in cases where the agent and the buyer have a long-term relationship.  99 times out of 100 in Texas, the commission is 6% of the sale price -- half of that usually goes to the real estate agent and the other half to the broker (the agent's sponsor).

 Brosen is right in that the fee/commission is spelled out in the listing agreement, but I'm not familiar with the 1% custom... Seems pretty low.

A 6% fee is common in my market but I read somewhere the national average is around 5% (I think it was Clark Howard's website). In most cases the commission is split 4 ways, The Selling agency (company) and Listing agency (company) split the fee. Then the fee is split again between the agency (company) and the working agent (the one whose face is seen during the transaction).  It happens this way because a listed property placed on the Mutiple Listing System or MLS is visibly available to sell by any agent (1200 in my market) participating in the MLS. It is a very powerful and effective sales platform.

Does the buyer or the seller pay? It's really semantics; the seller often pays the fee out of closing proceeds but the buyer is paying for the home which has a commission/fee built into the price. You could really argue that either or both parties pay.

The best way to determine what commission/fee to pay is to interview several agents in your area. Remember the fee is negotiable. I wouldn't pick based on price only but how the agent will insure your house gets the proper market exposure.

I am a practicing real estate agent in Fayetteville North Carolina

It depends where you are, what agent you're working with, and what you expect from your REALTOR for the fee.  In California, the fee is 6% of the sales price.  3% to the buyers agent and 3% to the sellers agent.  Of course this is all negotiable in the Real Estate transaction and contract.