Please note: This article is provided for helpful purposes but should not be considered legal advice.
One of the most important decisions you have to make after deciding to buy or sell a home is hiring a realtor to help you through that process, which includes listing the property, advertising it, arranging for open houses, showings, inspections and closing the sale.
Below are some common questions when considering employing an agent:
Are realtors self-employed?
Licensed real estate agents are considered statutory non-employees by the Internal Revenue Service are treated as self-employed when it comes to federal tax purposes as long payments for their services are substantially related to sales or other output versus the number of hours they actually work.
Are realtors worth the money?
Deciding whether a real estate agent is worth the money can be as personal as choosing your forever home or selling your current home. Be sure to keep these points in mind when determining if an agent is worth the money:
Selling a home is not as simple as placing a for sale sign on your front lawn. An agent will list your house on the Multiple Listing Service (MLS), the source most agents use when searching for a home for their clients. However, many homes do sell through ads placed in the classifieds or online.
Real estate agents also know their local market and are quite adept at selling your home for a good price. They also save you time by not interrupting your schedule more than necessary to show your home and ensure that contracts and other legal matters are in order.
Realtors who act as buyers agents save their clients time and effort by searching the MLS for homes in their price range that come with many of their “must haves.” They take on the burden of negotiating with the seller, schedule inspections and ensure that closing paperwork is complete.
Are realtor fees part of closing costs?
Realtor fees are how most real estate agents are paid for the homes they sell. These commissions vary state by state and should be negotiated between the agent and seller before the property is listed.
With that said, if you are purchasing a home, you more than likely will not be responsible for realtor fees. The seller usually pays them at settlement, when the fee is deducted from the proceeds of the sale.
Are realtor commissions tax deductible?
The IRS looks at realtor commissions as part of the cost of buying or selling a piece of property, meaning some are tax deductible and some are not.
If you pay the commission to sell your home, it is not deductible, even though it was part of the price of selling the property.
It’s a different story on commissions you pay on investment property. The IRS does allow most of those fees to be written off.
Can a realtor represent the buyer and seller?
Known as dual agency, a realtor can represent both the buyer and seller in a transaction as long as both parties know the realtor is representing the other party in the sale.
Can realtors do property management?
Yes, realtors can take on the role of property manager. As a matter of fact, many property managers are licensed real estate agents. This makes sense because agents are fully knowledgeable of state laws relating to rental properties and landlord rights.
Can realtor fees be rolled into the mortgage?
Since sellers normally pay realtor fees, they are not rolled into mortgages. The buyer usually is not responsible for realtor fees.
Do realtors charge buyers?
A good buyers agent won’t charge you anything for his or her services. Generally, the seller pays both the buyer’s agent and listing agent, so buyers are not responsible for those fees.
Do realtors pay for staging?
Usually, the seller pays the cost of staging, which can range from $350 to $2,000 or more. When hiring a listing agent, sellers can negotiate the cost of staging their home, especially if the agent suggests it. Many agents will split the cost with sellers, but that should be worked out and fully understood before the property is placed on the market.