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Who Pays a Real Estate Agent’s Commission?

Have you ever really thought about how real estate agents get paid? Pretty much everyone understands that they work on commission, but do you know exactly whose pocket that commission comes from? If you don’t know, you’re not alone. In fact, according to a recent survey done by Clever Real Estate, almost half of the population has no idea who actually pays their agent’s commission. The good news is we’re here to clear up any confusion about how commission works in a real estate transaction, including who pays for it and how it gets disbursed.

How Commission Works

When a homeowner wants a real estate agent to help them sell their house, they’ll usually sign a listing agreement with the agent’s brokerage firm. This agreement stipulates details like the listing price and other information about the home as well as the percentage of the sales price that will be paid to the brokerage as a commission. That percentage is commonly in the neighborhood of 6%. That might seem like a lot, but that 6% actually gets divided among a few different parties. The listing brokerage offers a split of the commission—usually half, so 3% in this case—to the agent that finds a buyer for the home. Each agent will have a certain commission split with their respective brokerage as well. The amount the agent gets depends on their contract with their broker. Brand new agents may get as little as 40% or 50% of their agency’s share of the commission. More seasoned agents will have a higher commission split. Some might even get to keep 100% of their share and pay monthly fees to their brokerage. To be clear, the only person who can physically pay a real estate agent is his or her broker. Commission checks are made out to the brokerage firm, which then pays its agents their part of the commission.

Who Pays the Commission?

Since the listing agreement that spells out the agent’s commission is a contract between the seller and his or her broker, the seller is officially the one who is responsible for paying the commission. You might argue that since the commission comes out of the sales price of the home, the buyer is actually paying it. That may be true, but the money actually comes from the proceeds of the sale of the home. Plainly stated, it eats into the seller’s profit. That might not seem all that fair, but the seller will usually take the listing agent’s commission into consideration when they set the listing price for their home.

Can I Save Money By Not Using an Agent?

A report from Porch, a home-improvement networking site, said that a little over 35% of Millennials aren’t using real estate agents. When asked why, 60% of them said they thought it would help them save money. It may seem like we’re being biased when we say this, but it’s really not a good idea to buy or sell a home without the help of a licensed real estate agent. There are so many legalities and negotiation details involved that the general public doesn’t understand. If you try to do it on your own without an agent’s help, you might actually end up spending more in the long run. There’s really no reason a buyer shouldn’t enlist the help of an agent. If the seller is using one, they’re paying the commission no matter what, so the cost will already be built into the listing price. The only difference is they won’t have to share it with another brokerage firm.

Buying a Home Soon? Avoid These 5 Things

If you’re planning on buying a home anytime soon, you’re probably already knee-deep in research and advice. We’re sure you have a whole list of what you need to do in order to get pre-approved for a mortgage and find your perfect home. Today, however, we want to talk about five things you shouldn’t do if buying a house is in your foreseeable future.

1. Don’t wait to get organized.

Get a binder or accordion file and start organizing your paperwork now. Get copies of bank statements, credit reports, tax returns, proof of employment, etc. to ensure you have them all if and when you need them. When you meet with your lender, you’ll have it all ready to go.

2. Don’t overspend or take on unexpected debt.

Create a budget and stick to it. Now is the time to trim your spending where you can and pad your bank account. Avoid making any large purchases or take on any unexpected debt. You want to keep your credit report clean and keep balances as low as you can until after closing day. Try finding little ways to cut your spending here and there, like making coffee at home and brown-bagging it for lunch.

3. Don’t forget to monitor your credit score.

You definitely don’t want any surprises cropping up in your credit report when you go to initiate the approval process. There’s no standard for credit scores when it comes to getting approved, but the higher your score, the better your chances are of getting approved and locking in a lower interest rate. Check your annual free credit report or sign up for credit monitoring, available for free through many credit card companies and banks if you already do business with them. If anything looks suspicious, check into it and dispute it if needed. If everything looks legit, keep credit balances low and don’t close any accounts. Lenders need to see that payment history that tells them you’re a responsible spender.

4. Don’t change jobs.

Lenders look at more than just your debt-to-income ratio before approving you for a home loan. They want to see job history and longevity in order to secure their investment. It’s important to show that you have job security and will be able to make your mortgage payments on time each month.

5. Don’t wait to get started.

You might not be ready to buy right away, but don’t wait until you’re ready to pull the trigger to start house-hunting. It usually takes a lot of looking to find the perfect home. Get started now so you can make a solid list of your needs and wants and get to know what’s on the market. This way you won’t be surprised at what you’re able to afford when it’s time to buy. It’s also a good idea to go ahead and hire a Realtor® and get in touch with a lender so you can start getting your ducks in a row.

How-To Tuesday: Let the Sunshine In

Spring has officially sprung, and if you’re anything like us, you can’t wait for the sunshine and warmer days to stick around for good. For now, we’ll deal with the back-and-forth weather of early spring and the April showers that eventually bring May flowers. But to help keep the dream of beach days alive, it helps to inject a little sunshine into our homes in other ways. Read below to find out how!

Let the Spring Cleaning Commence

A little spring cleaning is sure to lift the mood in your home. Do your normal spring cleaning by giving everything a good scrub down, freshening the air in your home, and putting away winter gear. Don’t forget to give the windows and floors a deep cleaning. They could use it after putting up with winter yuckiness and early spring pollen. Scrub, polish, and patch hardwoods, have carpets steam cleaned, and clean and repair any grout that needs it.

Pare Things Down

While you’re doing your annual spring clean, think about paring things down using the KonMari method. We’ve been fans of Marie Kondo for a while, but her recent Netflix series has everyone buzzing about her method and sparking joy in your home. It feels so nice to get rid of the things that weigh us down. Why not give it a try to prepare your house for spring?

Hit Refresh

Amp up the mood in your house by repainting those areas that feel drab, switching out winter drapes for lighter window treatments, and maybe replacing thicker wool and shag rugs with lighter, natural fiber rugs in brighter colors.

Add Some Plants

Incorporate low-maintenance indoor plants into your home decor. It’s a great way to improve the air quality in your home and add a literal element of spring. Not only do houseplants help you breathe a little easier, but they can also help improve your mood and keep things feeling fresh.

Lighten Up the Textiles

Put away the faux fur, knitted blankets, and heavier throw pillows, and bring out lighter linens in pretty spring colors and prints. Think pastels, bright whites, florals, big leafy prints, and beachy vibes.

Add Mirrors and Metallics

If you have a room that’s particularly dreary, add in some mirrors and metallics to reflect light and brighten up the room. Hang a large mirror directly across from the largest window in the room and automatically double the amount of sunlight. Adding metallic light fixtures, artwork, and decorative objects will also help reflect light and make everything feel brighter and more luxurious.

Trim Trees

This might not be an obvious task when you’re thinking about the indoors, but trees and bushes that are positioned near windows can do a lot to block natural light from streaming in. Give them a trim and bask in the extra sunshine.

Friday Five // March 29th, 2019

It’s Friday once again, which means it’s time for the Friday Five, our weekly roundup of five fun events happening in the Charleston area this weekend. Take in some bluegrass music, sip a mimosa or three, sample multiple food trucks in one spot, and more. No matter what you choose to do, the staff and agents at Johnson & Wilson Real Estate Company wish you a safe and happy weekend!

This weekend marks the 5th annual Charleston Bluegrass Festival + Grand Opening of the Charleston Woodlands. This is a family-friendly Lowcountry camping event featuring three stages of national and regional bluegrass music, outdoor recreation, and a diverse selection of local food and beverage options. Like the ever-popular Awendaw Barn Jams, this event will feature a constant stream of amazing music to delight the senses. Festival hours are from 12pm until 11pm on Friday and 10am until 11pm on Saturday. Music lineup includes Chatham County Line, Town Mountain, Jon Stickley Trio, Circus No. 9, The Dirty Grass Players, West King String Band. Ol’ 55s, Rachel Baiman, Sam Burchfield, Pierce Edens, Robert Mabe, Sally & George, and Escaping Pavement. Kids under five get in free. See more info at the link above.

If you love a good mimosa as much as we do, you’ll want to check out the very first Charleston Mimosa Festival on Saturday at The Bend*. This celebration of brunch is hosted by Charleston Wine Festivals and includes brunch bites from delicious Charleston restaurants, mimosas, Bloody Marys, beer, wine, live music, and a DJ. This is a 21-and-up event only. No children, babies, or pets are allowed. No outside food or beverages allowed. Free bottled water will be available. Purchase General Admission, Drinks Included, or VIP Tickets at the link above.

*The Bend is an event venue made up of twenty acres of privately owned property along the Ashley River, dedicated to a creative, community-minded, and sustainable way of life.

Give back to your furry friends by taking them to Pet Fest at Palmetto Islands County Park this Saturday from 11am until 4pm for fun, frolicking, and exploration. Pets and their owners are invited to enjoy exhibits, demonstrations, experts, entertainment, and more at Charleston’s premiere pet festival. View the dog parade, meet various breeds at the Charleston Kennel Club’s Family Dog Show, and participate in contests like Best Trick, Owner/Pet Look-Alike, Face Only a Mother Could Love, Musical Sit, and Best Dog Costume. This event is sponsored by Coca-Cola Bottling Co. Consolidated, Charleston Animal Society, Crews Subaru of Charleston, and Veterinary Specialty Care - SC. Admission is $8 per person or $5 per person with a pet food or supply donation. The event is free for Gold Pass members and children 12 and under.

Head to the Green Barn at Carnes Crossroads in Summerville this Saturday for BBQ and Brews from 4pm until 7pm. Enjoy an evening of live music, beer, and southern barbeque from various vendors. There will be lawn games and fun activities for the entire family, and you’re encouraged to bring a blanket and/or lawn chairs to settle in and enjoy the fun. Admission and parking are free for this event. Barbeque and beverages available for purchase from vendors.

Celebrate Sunday Funday at the 2nd annual Charleston Battery Food Truck Festival at MUSC Health Stadium. The festival takes place Sunday from 11am until 6pm and features beer, food trucks, and March Madness on the 3,000 square foot JumboTron. Sample loads of local food, drinks, entertainment, and more. Admission to this event is free. Dogs on leashes are welcome, and lawn chairs, tents, blankets, tailgate games, and kids’ activities are encouraged. Just a few of the food trucks included in this year’s festival are Semilla, Holy City Waffles, Booze Pops, Greekin’ Out, Diggity Doughnuts, Charleston Festival Foods, Happy Thai Food Truck, and many more!