HOW MUCH IS REAL ESTATE COMMISSION IN ARIZONA?

Arizona has some of the fastest-growing cities in the U.S., and the growth comes from amazing terrains like real estate in Lake Havasu, good schools, affordable housing, and a robust job market. Some of the top industries in Arizona include health, bio science, and financial services. As such, Arizona is a great place for real estate agents.

So, if you want to sell, buy, or rent a property, you need to hire a real estate agent. And, the professional will be paid through an average real estate commission. Before you get to know how much a real estate agent earns in Arizona, let’s discuss how Arizona real estate agents get paid.

HOW DO REAL ESTATE AGENTS GET PAID?

Professional real estate agents work on commission, which is a percentage of the sale. Real estate agent commission means they are getting paid after buying, selling, and sometimes, renting a house. However, there isn't always a weekly paycheck. In short, there is no consistent salary.

But the agent has the opportunity to make as much depending on the will to work. Moreover, there are a handful of real estate professionals who receive a salary along with an extra commission. And, it depends on the brokerage. Most companies don’t offer that perk. While there is no national average commission rate, the average real estate agent earns 6% - 7% on each transaction.

IS THERE REAL ESTATE COMMISSION IN ARIZONA?

Instead of putting in longer hours and getting hourly or weekly pay, most real estate agents make money after a successful real estate deal. However, the process could run for weeks or even months and include lots of work. Because the commission can be negotiated, what is treated as fair comes to whatever rate the agent is comfortable with.

Most local agents in Arizona expect at the very minimum, a statewide standard commission rate of about 5.36%. Also, it is worth mentioning that the rates don’t vary much from one agent to another. And, the charge rates for most realtors are often in line with standardized rates in that area, like homes for sale in Bullhead City. 

The agents from both buyer and seller split the commission. So, for a home selling at $200,000 at a 5.36% commission rate, the buyer’s and seller’s agent will split $10,720 and receive $5360. Again, the commission split varies from agent to agent. A real estate novice could receive a smaller percentage of the commission compared to the experienced and top agents who tend to sell expensive properties or more houses.

WHO PAYS THE COMMISSION?

In general, the homeowner is responsible for the payment of the full commission for the services of their listing agent and the buyer’s agent.

WHAT IS A DUAL AGENCY?

Sometimes, a single agent represents both the seller and the buyer. On such occasions, the agent is treated as a “dual agent”. And, he or she is entitled to receive both commissions from a home sale.

However, it can become a sticky position to work for both the buyer and seller at the same time. And, because of this, many agents don’t want to practice dual agency. Moreover, some states don’t even allow this kind of direct benefit.

And, there is good logic behind this philosophy because it gives rise to a conflict of interest. Agents are involved in every aspect of the sale. Clients tend to hire professionals so that the agents can represent the best interests on behalf of the clients. And, working on both sides makes the work complex and unfair.

HOW DOES COMMISSION FOR REAL ESTATE AGENTS WORK IN ARIZONA?

As you know, two real estate agents are involved in a property sale.

• The buyer’s agent, who works on behalf of the person intending to buy the home

• The seller’s agent or the listing agent, who works on behalf of the home seller

Both these agents are entitled to receive a percentage of the final price of the home after the deal closes. And, it is called the real estate agent commission. Moreover, this amount is included within the sale price when you are about to sell your home. According to research, the commission split for the listing agents in Arizona is about 49.2% and 50.8% for the buyer’s agent.

WHAT MAKES THE REALTOR COMMISSION COST YOU SO MUCH?

While the traditional realtor commission might seem to cost you much, there are a few important factors to consider:

LISTING A PROPERTY INVOLVES CERTAIN TYPES OF RISKS

Realtors have to pay upfront needed for marketing costs and it includes advertising, staging, professional-looking photographs, etc. Moreover, they get paid when the property sells.

FINDING CLIENTS ISN’T A COST-EFFECTIVE AFFAIR

Real estate agents have to spend a considerable amount of time and money generating new businesses. It is an expense that is passed along to property sellers.

REAL ESTATE AGENTS SPLIT THEIR COMMISSION

Indeed, a listing agent takes home only a fraction of the total realtor fees.

However, some companies try to make the agent’s job easy so that they can accept lower-than-average commission rates. By matching the needs of the home seller with the realtors, they reduce the cost of reaching out to potential clients along with low realtor fees.

WHY DO HOME SELLERS HIRE REAL ESTATE AGENTS?

People have the option to sell or buy their houses without the need to hire a real estate agent. This process is known as "For Sale By Owner". However, it is incredibly difficult to attract buyers when you do not know what you are doing. Interested buyers want to work with someone they can trust, that is backed by a reputable, professional brokerage and understands market conditions and home values.

Agents provide their clients with a variety of services. It includes helping you with the price of the property, advertising and marketing it through multiple listing services, social media platforms, etc., negotiating with potential buyers, and closing the deal.

Only an experienced real estate expert can help you earn top dollar for your property while alleviating certain kinds of stress when it comes to selling a property. A successful property deal has its toll and only a good agent can help you out.

In a recent survey by the National Association of Realtors, it has been discovered that properties “for sale by owner" or FSBO properties managed to sell for about $190,000 compared to $249,000 for home sales being assisted by real estate agents.

Moreover, this report is in accordance with a few surveys that found out that properties listed for sale with a professional real estate agent sell about $46,000 more on average compared to the FSBO homes. That explains why most home sellers hire an agent to sell their property.

IS AN AGENT COMMISSION NEGOTIABLE?

As said earlier, the commission rates vary from one to another. Moreover, it might vary across brokerages as well. Because there are no state or federal laws associated with the setting of standardized commission rates, it means the commission can be negotiated.

In short, if you are selling your property, you can ask your real estate agent to reduce the rates. However, keep in mind that the agent isn’t obligated to do so. An important factor to consider is that the cost of marketing for your property comes from the agent’s commission. So, a lower commission rate means less marketing for your property.

It won't cause you any harm to request a lower commission rate. And, most of the time, agents will reply negatively. However, if you fall short of your cash because you have bought a new construction property, you can go for a transactional agreement.

That way, the listing agent helps you to set the asking price for your property, facilitate communication with the buyer, form the contract, and close the process for a lower commission or a flat fee. However, you won’t receive full cooperation from the agent and their services. While this might not be the best option, it works for many people.

Moreover, most agents don’t offer transactional agreements. And, you have to do thorough research to find one. Buying and selling a property is likely the biggest financial transaction in your life. And, shopping for an agent with lower commission rates is not worth it. Instead, hire an agent that can be trusted to do a good job.

WHAT ELSE DO YOU NEED TO KNOW ABOUT REAL ESTATE COMMISSIONS?

All the details related to the real estate commission along with the agent’s charge and transaction fees should be outlined elaborately on the contract that you sign when hiring an agent. In general, it is a type of listing agreement. Also, it furnishes the detail on how long the agent can represent you.

Listing agreements can last from 90 to 120 days. Moreover, have a clear understanding of some of the exceptions. Rental agents, for example, work differently from purchase agents. While the landlord has to pay for the rental agent’s fee, it isn’t set in stone. For example, in New York City, tenants have to pay for the rental agent’s commission.

So, it is up to the tenant and landlord to decide who should pay the rental agent’s commission. Moreover, the commission gets higher, anywhere between 8 and 10%, when it comes to selling an empty plot. That’s because selling vacant land takes a long time and involves more money for marketing.

DOES SENIORITY MAKE A HUGE DIFFERENCE IN REAL ESTATE COMMISSION RATES?

The amount that a real estate agent makes in Arizona depends on how long the agent has been associated with the real estate industry. Beginner-level agents can earn about $24,550 per year. These agents are building their network and still learning about effective ways of dealing with properties.

Apart from that, most first-year agents have to split their commission with the brokerage, which can be about 50%. That way, a major part of the earnings get exhausted. However, when they reach a certain level that you can call junior level, the average commission might increase to about $34,594 per year.

Getting into the junior level associates marks the beginning and scope of earning more. Real estate agents after reaching mid-level inexperience can earn about $50,640 per year in Arizona when selling, for example, real estate in Lake Mohave. The senior-level associates can earn about $74,129 per year.

However, it is important to note that real estate agents who earn more tend to work more hours compared to the others. The real estate agents working in Arizona typically work for about 60 hours per week generating an average amount of about $87,000 every year. Moreover, the top sales agents make over $200,000 in a year.

WHAT ARE THE COMMON BENEFITS OF A REAL ESTATE AGENT IN ARIZONA?

Apart from the salaries, many agents in Arizona that deal in real estate enjoy certain benefits. In addition to enjoying a flexible schedule by working from home, they enjoy other perks as well. Some of the common benefits include professional development assistance, parental leave, mileage reimbursement, and health insurance.

Some brokers even provide their agents with stock options, whereas others might provide dental insurance, vision insurance, and commuter assistance. However, the exact package varies from one brokerage to another.

WHAT IS THE RIGHT TIME TO HIRE A REAL ESTATE AGENT IN ARIZONA?

The best time to hire a real estate agent to sell your home should be anywhere between three and six months before the listing date. So, when you research the market looking for the best agent that deals in real estate before advertising on the market, you get plenty of time.

That way, you can make important renovations, find the best agent to work with, and advertise your home in the most effective way possible. These are important steps required for selling your home if you are looking for a great price.

Moreover, hiring a good agent depending on the right time to sell your property helps you to take advantage of the season and other trends on the market. Also, the best time to work with an agent depends on the right temperature.

For example, May is often chosen as the best time to sell your property. Because it takes about 3 months to close a deal, you have to list the property in February. If you want to get the deal done within your desired move date, it is best to hire an agent for your home.

IN CONCLUSION

Being a seller, you would want a real estate agent who will give you the best sales price along with the terms. However, hiring a good real estate agent isn’t cheap. That’s because he or she will give their best to the project and deliver positive results. And, as with other things in life, you will get what you are paying for.