Who Pays Real Estate Commission in Arizona?

When it comes to buying or selling a home, one of the most common questions people ask is, “Who’s responsible for paying the real estate commission?” In Arizona, this has always been a negotiable item, but recent changes in the industry are sparking new conversations. The NAR (National Association of Realtors) lawsuit settlement has raised concerns about how commissions are structured, especially regarding buyer representation. Here's what you need to know.

Understanding the NAR Lawsuit and Its Impact

The National Association of Realtors (NAR) recently settled a high-profile lawsuit that could change the way commissions are handled in real estate transactions. Under the settlement, buyers may now be required to sign an agreement with their agent, specifying how commissions will be paid.

Key points to know:

• Traditionally, sellers pay both their agent's and the buyer’s agent's commissions in Arizona.
• The settlement may lead to buyers taking more responsibility for their agent's commission costs.
• However, seller commissions will likely remain the norm, and commissions have always been negotiable.

Who Traditionally Pays Commissions in Arizona?

In most Arizona real estate transactions, sellers typically cover the costs for both their own agent and the buyer’s agent. The commission is usually a percentage of the home’s sale price and is agreed upon before the home goes on the market.

Key Details:

• Standard commission rates in Arizona range from 5% to 6% of the home’s sale price.
• These fees are split between the seller’s agent and the buyer’s agent.
• As a seller, you can always negotiate the commission with your agent.

What Does This Mean for Buyers?

If you’re a buyer, the recent NAR lawsuit may impact how you approach your home search. You may need to have a clear agreement with your agent that outlines who will be responsible for paying their commission.

For Buyers:

• This could mean some buyers will now be asked to pay part or all of their agent’s commission.
• It’s important to clarify these details with your agent before you start your home search.

Can You Negotiate Commissions in Arizona?

Yes! Both buyers and sellers can negotiate commissions with their agents. While seller-paid commissions are still the norm, every part of a real estate transaction is negotiable, including the fees.

Negotiation Tips:

• Sellers: Ask your agent what they are offering for their services and see if there's flexibility in the rate.
• Buyers: Make sure you fully understand what commission agreement you are entering into before signing anything.

Final Thoughts: Stay Informed About Commission Structures

With changes in the industry, it’s more important than ever to stay informed about how real estate commissions are structured. Whether you're a buyer or a seller, knowing the details can help you make informed decisions and save on transaction costs.

Do you have questions about how commissions work in Arizona real estate transactions? Call or email today to get personalized advice and clarity on your next move.