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Understanding Real Estate Agent Commissions – What Sellers and Buyers Should Know

Last year I received a question from someone curious about real estate agent commissions in San Diego. They were partly asking what typical commissions are, and partly expressing disappointment in what they agreed to pay an agent who they felt wasn’t doing much to market their home. Commissions are also a topic that regularly come up when I meet with clients who are potentially listing their homes. Even experienced home buyers and sellers often have misconceptions about real estate agent commissions. If you are potentially selling a property, it is vital to have a good understanding of how commissions are usually structured. Understanding commissions can be useful for buyers as well. While some of the information is specific to San Diego, much of the information in this article is relevant throughout the US. I will answer the questions about what “typical” real estate agent commissions are, some common misconceptions about commissions, and why you paradoxically can sometimes net MORE on a sale when paying a HIGHER commission.

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