Realtors' commission and costs explained - FOX 13 News

Realtors' commission and costs explained

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LUTZ (FOX 13) -

When our single largest purchase is made, arms are outstretched and pockets are lined.

A home sale opens the door to multiple middlemen. Chief among them is a real estate agent.

"Realtors are not supposed to discuss commissions and rates," said Deborah Farmer of StarLight Realty in Tampa.

Farmer, a veteran Realtor, made an exception for us. She said she's charged the same rate since mid-1995.

"I charge a flat six-percent commission. Sixteen years later, I'm still charging a flat six-percent commission," she said.

Farmer showed us a beautiful three-bedroom home that boats a beautiful lakefront view. The list price was $749,000. At six percent, Farmer's commission would be $44,940.

But that's not the entire equation. Farmer said she generally goes halfsies with the buyer's agent.

"Now you have three percent," she said.

Now we're at $22,000. But Farmer said expenses quickly eat up her cut, such as: flyers, signs, gas, websites, and massive self-employment taxes.

"The three percent dwindles away pretty quickly," she said.

Farmer said a six-percent commission is standard. But, she added, home sellers and home buyers can negotiate the real estate agent's take.

That's not the case with others who are integral to closing a home sale. Many times, their fees are non-negotiable—regardless of the service rendered.

Average amounts for select real estate closing costs in Florida, according to Bankrate.com:

  • $418: Appraiser
  • $365: Surveyor
  • $200: Underwriting
  • $75: Tax Service
  • $1,157: Mortgage Broker
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