- What is a Real Estate Commission?
- The Real Estate Commission is Split Between Four Parties
- Calculating the Commission on a Louisiana Home
- What Does This Mean for You?
- What is the Average Income of a Louisiana Real Estate Agent?
- The Responsibilities of Real Estate Agents in Louisiana
- Why Work with a FastExpert Agent?
What is the Average Real Estate Commission in Louisiana?
According to a poll of FastExpert real estate agents, the average commission rate in Louisiana is 5.2%, which is below the National average of 5.57%.
In fact, Louisiana is one of the 10 lowest commission states, according to the FastExpert findings.
Not only does FastExpert provide research and analysis of the housing market, but most importantly, FastExpert provides a wide variety of top real estate agents that are personally matched to meet your real estate needs.
Real estate is very personal and often the most significant financial decision for an individual. Finding someone that understands your needs and that can guide you through the real estate process is critical to a successful outcome.
In addition, it’s important for you to understand the financial aspects of your real estate transaction. Besides the actual purchase of the home, the largest closing cost is the real estate commission, otherwise known as the realtor fees.
Let’s dive in and understand the Louisiana real estate commission.
What is a Real Estate Commission?
Real estate agents do not get paid a salary, nor are they paid for their hourly work. Therefore, realtors are only paid once a home is sold. Real estate commission is a percentage of the purchase price that the agent receives as payment for their services.
Real estate commission is also commonly referred to as realtor fees because it is the payment that the realtor receives for the work put in to help you buy or sell a home.
Who Pays the Real Estate Commission?
The seller is responsible for paying the entire commission for both the listing agent and the buyer’s agent. Oftentimes, the realtor fees are baked into the purchase price of the home; however, as a seller, it’s important to be prepared for the significant sum of money that will go towards paying for the real estate transaction.
However, one agent does not keep the entire sum of the realtor fees.
The Real Estate Commission is Split Between Four Parties
In every real estate transaction, there are four parties involved: the listing agent, the listing broker, the buyer’s agent, and the buyer’s broker.
Let’s walk through the real estate agent commission payment from the point of sale to the conclusion when the agents are paid. First, we’ll provide a general example, and then we’ll apply this to Louisiana real estate.
If a home sells for $500k at a 6% commission rate (the recommended rate from the National Association of Realtors), then the total commission paid is $30,000.
Typically, the commission or realtor fees are then split equally between the listing agent’s brokerage and the buyer’s agent’s brokerage, with each of the trusted brokerages receiving $15,000.
This amount is then further divided between the brokerage and the agents involved in the transaction. If the amount is split equally between the listing agent, listing broker, buyer’s agent, and buyer’s broker, then each would receive $7,500.
Brokerage fees can vary, and agents with more experience often get to keep a bigger piece of the pie.
Let’s change our example and say the listing agent was able to keep 70% of the commission. Then of the $15,000 payment, the listing agent would earn $10,500, and the listing brokerage would keep $4,500.
While this doesn’t change the total commission payment from the seller, it does impact the real estate agent.
Calculating the Commission on a Louisiana Home
Let’s apply this specifically to Louisiana real estate.
The median sales price of a Louisiana home is $240,000, according to Redfin. FastExpert’s data indicates Louisiana’s average realtor commission is 5.2%.
Therefore, the total commission payment would be $12,480.
The payment would be split between the listing agent’s brokerage and the buyer’s agent’s brokerage, with each receiving $6,240.
The brokerages would then pay their agents.
If, as in many cases, the listing brokerage were splitting the commission 50/50 with the listing agent, then the seller’s agent would receive $3,120.
The same would be true for the buyer’s representation. All four parties, the listing agent’s brokerage, the listing agent’s commission, the buyer’s agent’s brokerage, and the buyer’s agent’s commission, would all receive a payment of $3,120.
Whether a property sells in one day or one year, the commission payment is the same. Real estate agents maximize their earnings by selling high and selling quickly.
What Does This Mean for You?
If you are looking to buy or sell a home in Louisiana, it is important to keep the commission in mind. It is possible to negotiate a lower commission with your real estate agent, but it is important to do your research before entering into any contract.
The FastExpert platform can help you find the right real estate agent for your needs, and our local agents are always happy to answer any questions you may have about the process.
What is the Average Income of a Louisiana Real Estate Agent?
The average income of a Louisiana real estate agent is $81,166, according to Indeed, which is below the national average for realtors. However, the cost of living in Louisiana is 7% lower than the national average, and housing and utilities are 13% lower than the national average. Therefore a slightly lower relative income is to be expected.
Location and experience can also have a significant impact on a realtor’s income. Agents with less than 2 years of experience earn an average of $73,175 per year. Whereas agents with more than 10 years of experience earn an average income of $96.011 annually.
In addition, location can impact the income a real estate agent earns. Homes that are priced relatively higher will allow an agent to earn a higher income.
Real Estate Agent Commission by City in Louisiana
- Denham Springs – $106,238
- Baton Rouge – $90,334
- Lafayette – $87,051
- Shreveport – $86,766
- New Orleans – $86,478
- Metairie – $76,572
- Alexandria – $74,468
- Destrehan – $71,151
- Chalmette – $71,151
The Responsibilities of Real Estate Agents in Louisiana
The Louisiana Real Estate Commission (LREC) set the requirements and guidelines for real estate agents operating in the state. All agents must be licensed by the LREC in order to legally practice.
In addition to the requirements for licensing, all agents must adhere to the LREC’s code of ethics and continuing education. This code outlines the standards of conduct that all agents must follow in order to maintain their licenses.
Some of the key principles of the code of ethics include honesty, integrity, and fair dealing. Most real estate agents are also Realtors, which means they are bound to an even stricter code of ethics set forth by the National Association of Realtors (NAR).
With the help of FastExpert, you can find an experienced agent who will work hard to get you the best possible outcome.
>>CONNECT: Check Out Louisiana’s Top Agents
Why Work with a FastExpert Agent?
When you work with a FastExpert agent, you can be confident that you are working with a top-performing real estate professional. We ensure high standards for all agents on our platform by vetting and screening them.
In addition, our agents are local experts who know the ins and outs of the Louisiana real estate market. They will work tirelessly to help you find the perfect home at the best possible price.
When you work with a FastExpert agent, you can be sure that you are getting the best possible service. Our local agents are committed to providing an exceptional experience for all of our clients.
If you are ready to start your real estate journey, start right now by entering your zip code to browse through top-rated agents in Louisiana.