Calculating the real estate agent’s fee

How is the real estate agent’s fee calculated?

A real estate agent’s fee, or commission, is usually a percentage of the property’s sales or rental price and depends on a number of factors, including location, property value, and real estate market conditions. Here are some key points that affect real estate agent fees:

Brokerage Fee Percentage: A real estate agent’s fee is usually a percentage of the sale or rental price of the property. This percentage may vary from region to region and also depends on the agreement between the broker and the client. A common range is 2% to 5% of the sales price, but it can be higher or lower depending on the specific circumstances.

Property value: The more expensive the property, the lower the percentage usually is. A lot also depends on the specific marketing activities that the broker offers to the client.

An agreement between the client and the broker: The broker and the client can agree on the amount and terms of the fee. It is important that agreements are in writing and clear to avoid disputes later.

Additional services: Some real estate agents may offer additional services, such as real estate appraisals, home improvements, or other types of consulting. These additional services may also affect the amount of the fee.

All in all, a real estate agent’s fee depends on a number of factors, and can vary by property type and location. It is important to clarify all fee-related issues and agreements before signing a contract with a broker to avoid unpleasantness later.

Broker’s fee in the case of a rental transaction

I’ll pay you extra for saving your time.

The amount of the rental commission can also vary depending on the area, the real estate market conditions and the intermediary. In general, the rental commission is calculated as the amount of one month’s rent for the property rented by the tenant. However, in some cases it can be the equivalent of several months’ rent.

The amount of the rental commission and the arrangements for paying it should always be clarified and agreed before the rental transaction is finalised. The tenant and the broker should clarify how much the commission will be and how it will be paid (e.g. whether it will be paid in one lump sum or in instalments) before signing the contract.

It is important to note that some countries or regions may have laws governing the amount of the rental commission and how it is paid, and sometimes it may be limited or prohibited. It is therefore important to look at the local laws and regulations that apply to rental commissions.

In Estonia, the commission is paid by the lessee, which makes it a completely FREE service for the lessor

Brokerage fee for a purchase/buying transaction

Just as the seller pays his broker (if he uses a brokerage service) a commission for the sales work, the buyer also pays a fee for the purchase service. One party is responsible for all matters related to the sales process, the other party is responsible for the nuances and activities related to the purchase.

Since you pay me, I do not share his commission with the other party’s broker. This way we can be sure that we are always on the same page as other buyers without brokers. That way, you can be sure that I will be based on your interests throughout the process.

Each project is of a different level and I dare to promote myself as a very personal broker. Similarly, the fee is according to the content of the service and the amount of time. Until now, the negotiated amount for the client has always been higher than my fee. I intend to continue in such a manner.

Purchase service fixed fee per transaction: 2000 EUR (+ VAT).

In addition to the fixed fee, there is also a bonus fee for effective work, which is 25% (+ VAT) of the initial selling price below the negotiated amount. Such a payment system gives you, the customer, the certainty that I will always negotiate the best possible price for you in the transaction.

Brokerage fee in the case of a sale transaction

The estate agent’s fee for a sale includes a range of activities and services to help sellers or buyers smoothly complete the property transaction. These activities and services may vary depending on the specific realtor and the agreement with the client, but the following are common activities that may be included in the brokerage fee for a sales transaction:

  • Property Appraisal: A realtor appraises a property to determine the correct selling price. This includes market research, assessing the condition of the property and preparing a valuation report. The appraisal report is prepared by an appraiser, a good broker has several appraisers as cooperation partners.
  • Real estate marketing: The broker is responsible for marketing the real estate. This includes:
  • attractive images and drone images taken by a photographer specializing in real estate with a video tour of the object.
  • Marketing the property in all social media channels using various possible modern and innovative solutions that competitors do not yet have. I would like to remind you that I have long-term experience in this particular field, and the creation and direction of your advertisements and campaigns are handled by people for whom this is a day job.
  • Preparation of comprehensive and well-thought-out text for advertisements
  • Publishing the ad on all major real estate portals, my personal social media channels, email list with motivated buyers and website.
  • Advertising in portals according to a solid and well-thought-out sales strategy, so that the advertisement of the object is constantly new and easily found in searches.
  • Dealing with ALL interested inquiries at a time that suits THEM, be it Friday night or weekend morning. I assist in all aspects of the transaction, from the showing to the signing of a notary contract and handing over the apartment.
  • Virtual customer days, so we can be sure that the object will be seen by people who are not interested in coming. Also, the video will remain in circulation later.
  • Cooperation with all other brokers using personal contacts with investors and cooperation forums.
  • Financial advice: I can give financial advice to the client, including in relation to mortgages, loans and other financial aspects.
  • Provide feedback on my activities (number of visitors, number of exhibitions, customer feedback, etc.). I do this regularly and in a simple manner so that you can understand which marketing activity is most suitable for us.
  • Solving real estate related issues: The broker deals with all real estate related questions and issues and advises on solutions.

These are general activities and services that may be included in the brokerage fee for a sale. The amount of the fee often depends on the value of the property and the agreement between the broker and the client. It is important to discuss the broker’s fee and related services before signing the contract to find out the amount of service and fee of a particular broker.

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