Paying a Real Estate Commission in Utah County

Who Pays the Real Estate Commission in Utah?

Real estate commission in Utah is always part of a transaction in buying or selling homes in Provo, Utah if you use a Realtor.  But who actually pays this real estate commission?  The technical answer would be the real estate broker. However, the money comes from the sellers side of the transaction. Let me explain.

Real estate agents in Provo work for a real estate broker.  Their are two types of brokers in Utah.  A principal broker and an associate broker.  The principal broker is typically the owner.  Thus, it is the broker who transacts with a seller regarding the listing agreement and it is the broker who pays the agent his fees. A Realtor works in behalf of his broker when securing a listing.

It is only the broker who can pay the real estate commission. A Realtor can not accept money directly from a Buyer or Seller or they could lose their real estate license.  In short, a seller pays a broker and the broker pays his Realtors.

How commissions work in Utah County

Commission percentages vary greatly between the new and under performing Realtors in  Utah County and the top selling or best performing agents.  New Realtors can be paid around 60 percent of the total commission that is received by the brokerage they work for.  Other expenses may still be charged such as advertising fees, office fees, signage fees, errors and ommission insurance, technology fees and other office expenses.  This means that the Realtor will net less than 50% of the total commission for his work after all the fees are paid.

The top selling agents in Provo can command up to 100% of the commission.  They will just have to pay their brokerage some sort of desk fee which they have agreed to earlier. I worked for Remax International for over 10 years. In fact, I owned the Spanish Fork Branch for several years with a few partners. Remax charges agent around $1000 per month and the agents then receive 100% commission on their sales. If you are not selling homes on a regular basis this fee can add up quickly over the months.

Negotiable Commission Fees

Commissions are negotiable.  Some people pay 6% commission while others may pay 5% or 4%.  We are seeing some brokerages charge a flat fee without services then posting homes to the MLS for a 3% commission.  Commission is between the seller and the Realtor.  The amount of commission is not fixed or standard like many people assume.  If you get a low commission you may be also getting no marketing and a Realtor that is not on the job.  Be careful and choose a Realtor you trust and get the services you want for a commission you want.

Sellers Pay the Real Estate Commission

The seller in Provo UT is the one who pays the commission to the broker and the real estate agent under the buyer’s broker agreement.  This means that if the brokerage firm operates at a 3% real estate commission, this amount will be added to the total payment that will be charged on the HUD statement at the closing table.

However, in some instances, listing brokers in Provo might offer real estate commissions lower than that charged by the buyer’s broker.  In this situation, the buyer might end up being the one paying the deficient amount.  For example, for the brokerage firm that operates at 3% commission, if the listing broker only pays 2.5%, the buyer will be left to pay the remaining 0.5%.  There are instances though where the buyer’s broker will waive the 0.5% so the buyer will no longer have to pay it. I have personally never charged my buyer the difference.

The Buyer Pays the Real Estate Commission

Some say that the buyer ends up paying for the real estate commission.  This is because the commission is usually already part of the sales price that the buyer sees. The seller or the broker includes this amount in the price of the property that will be listed.

As you can see some say the seller pays the real estate commission, some say the buyer pays the real estate commission. Legally the state says the principal broker pays the real estate commission. Who do you think pays the real estate commission?

Consider hiring Team Teasdale Realty to represent you when buying a home in Provo or anywhere in Utah County.

Homes for Sale in Provo Utah

About Paul Teasdale

Paul Teasdale is the Principal Broker of Team Teasdale Realty. Paul has been selling Homes in Provo since 1995. Contact Paul Teasdale if you are looking to Buy or Sell a Home in Provo, Utah. Paul 801-491-7653.
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3 Responses to Paying a Real Estate Commission in Utah County

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