Real estate commissions are negotiable, and the rules have changed. Here is how agent fees work for sellers and buyers, what is included, and how to talk about the cost before you sign.
If you are getting ready to sell or buy a home in Tullahoma, Coffee County, Franklin County, or around Tims Ford Lake, one of the first questions you probably have is how much the agent will cost. It is the right question to ask, and you deserve a straight answer. Here is how real estate commissions actually work today.
Commission is negotiable
There is no set rate for real estate commission, and no law says what an agent must charge. Every brokerage sets its own fees, and the amount is agreed on between you and your agent in writing before the work begins. Anyone who tells you the rate is fixed or “standard” is not giving you the full picture, so feel free to ask questions and compare.
How commission is usually structured
Commission is most often a percentage of the final sale price, paid at closing out of the sale proceeds, so you generally do not pay anything out of pocket up front. Some agents use a flat fee or a tiered structure instead. The key is to understand exactly what you are agreeing to, including what the fee covers and when it is paid.
What has changed for buyers and sellers
Rules around agent compensation have changed in recent years. Today, buyers typically sign a written agreement with their agent that spells out how that agent will be paid, and the amount is negotiated instead of assumed. Sellers can decide whether to offer compensation to the buyer’s agent and how much, and that offer is something to discuss openly with your listing agent. If a seller does offer compensation, it may be applied toward what the buyer owes their agent under their agreement, which can reduce or eliminate what the buyer pays on their own. These details matter, and a good agent will walk you through them in plain English before you commit to anything.
What your commission should include
A fee tells you very little by itself. What matters is what you get for it. Ask whether it covers a pricing analysis based on real local sales, professional photography, marketing on the MLS and the major home search sites, showing coordination, negotiation, and management of the contract through closing. An agent who charges less but does less may cost you more in the end, and an agent who charges more should be able to explain exactly how that value shows up in your net proceeds.
Think about what you walk away with
The commission is only one number. What matters more is what you net after the sale, and that depends on the price you achieve, how long the home sits, and how well the deal holds together through closing. A well-priced and well-marketed home can easily make up for a fee, while an overpriced one that sits for months can cost far more than a commission ever would.
Questions to ask before you sign
Before you hire anyone, ask what the fee is and how it is calculated, what is included, when it is paid, what happens if the home does not sell, and how the buyer’s agent will be compensated. Ask for all of it in writing. An agent who is open and clear about the cost is showing you how they will handle the rest of the transaction.
Auction is another option to consider
Some properties, including estates, land, and unique homes, can do very well at auction, and the cost structure is different. As a dual-licensed Realtor and auctioneer, I can compare both approaches for your property and show you what you would likely net either way, so you can choose what fits.
The bottom line
Commission should never be a mystery. Ask the questions, compare the value, and get everything in writing. I have been helping families across Middle Tennessee for more than 20 years, and as a Dave Ramsey Trusted Pro, I believe in being upfront about cost from the first conversation. If you would like to know exactly what it would cost to sell or buy with me, call 931-563-0703 or visit mikewintonrealtyauction.com.
Mike Winton Realty & Auction, Lic. 7508. Bid with confidence. Win with certainty.
