- Home Values in Kentucky are Affordable
- Kentucky Real Estate Agent's Average Income
- What Does the Commission Pay For?
- How is the Kentucky Real Estate Commission Divided?
- Kentucky Real Estate Agent Commission Breakdown
- Should I Negotiate a Realtor's Commission Rate?
- The Responsibilities of Real Estate Agents in Kentucky
- The Benefits of Working with a Real Estate Agent
- Why Work with a FastExpert Agent?
What is the Average Real Estate Commission in Kentucky?
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If you’re thinking of selling your home in Kentucky, you’re probably wondering how much it will cost in real estate commissions. The average real estate commission in Kentucky is 5.7%, which is above the average real estate commission in the US of 5.57%, but still comparable to the rest of the region.
The real estate commission is typically paid by the seller at closing and is based on a percentage of the final sales price of the home. For example, if your home sells for $200,000, and the commission rate is 5.7%, the total commission would be $11,400 ($200,000 x 0.057 = $11,400).
The average real estate commission in Kentucky varies depending on the location, type of property, and other factors. However, 5.7% is a good estimate to use when budgeting for your home sale.
Whether you’re selling a home in Louisville, Lexington, or elsewhere in Kentucky, FastExpert can help you find the perfect real estate agent to sell your home or find the home of your dreams. Our agents are local experts who will advocate for your best outcome.
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Home Values in Kentucky are Affordable
Lexington, Louisville, and Bowling Green, Kentucky’s most populous cities, will command higher average home prices relative to the rest of the state. However, even in these locations, home values are below the national average, making Kentucky an excellent place for affordable living.
According to Redfin data, the median sale price of a home in Lexington, KY, is $287,500, slightly higher than the state median of $227,100; yet, below the national average of $383,250.
Home values in Kentucky have risen by 15% over the past year, indicating a strong real estate market remains in Kentucky. Demand is high in Kentucky’s cities, indicating home values will be bolstered by this pressure.
With the presence of high inflation, Kentucky is an excellent state to consider for a home purchase. The median sales price of homes is relatively affordable, home values are remaining, and most homes are selling near their list price.
>>MORE: Why Should You Interview Multiple Agents?
Kentucky Real Estate Agent’s Average Income
The home sales price also impacts the commission rate that real estate agents receive. Since the commission is paid based on a percentage of the sales price, the relatively lower sales price results in a relatively lower commission payment for a Kentucky real estate agent.
On average, Kentucky real estate agents receive an annual income of $84,000, with is 12% below the national average.
However, the cost of living in Kentucky is one of the lowest in the United States. The average cost of living in Kentucky is approximately $44,000 annually. Therefore, the income of a Kentucky real estate agent is suitable for the state’s costs.
>>AGENTS ANSWER: Does the value of my home affect the commission that I pay?
Top Paying Cities for Agents in Kentucky
- Florence – $99,969
- Frankfort – $89,443
- Louisville – $87,647
- Bowling Green – $84,349
- Owensboro – $78,834
- Lenxington – $78,552
- Elixabethtown – $71,444
- Winchester – $49,268
- Georgetown – $48,255
What Does the Commission Pay For?
The real estate commission pays for the services of the listing agent and buyer’s agent. It also covers the costs of marketing your home, such as photography, yard signs, and open houses.
Oftentimes the commission is referred to as realtor fees because it is the payment to the realtor for all the work that they do to help you through the sale or purchase of a home.
With all of the real estate jargon that you must sort through during your real estate transaction, is important to note that these two terms, commission and realtor fees, are interchangeable.
>>MORE: Finding a Trustworthy Real Estate Agent
How is the Kentucky Real Estate Commission Divided?
The Kentucky real estate commission is typically divided between four parties: the listing agent, the listing agent’s broker, the buyer’s agent, and the buyer’s agent’s brokerage.
In the graphic above, the sale price of the home is $500K with a 6% commission rate. The commission is split evenly between the brokerages; therefore, each brokerage receives $15,000. The commission is then divided again between the brokerage and the real estate agents, with each receiving $7,500.
Let’s apply this to the average home in Kentucky.
>>LEARN: How Do Real Estate Agents Get Paid?
Kentucky Real Estate Agent Commission Breakdown
The median sales price of a home in Kentucky is $227,100, and the average commission rate is 5.7%. Customarily the seller pays realtor commission charges.
Therefore, the total commission is $12,944. Typically, these realtor fees are split in half between the selling and buying entities.
The selling agent’s brokerage would receive $6,472. If the real estate agent has more experience, they often get paid more than 50% of the commission. If the listing agent is experienced and receives 70% of the commission, the listing agent would be paid $4,530, and the brokerage would keep $1,942.
The buyer’s agent’s brokerage would also receive $6,472. If the buyer’s agent and brokerage split the commission equally, each would receive $3,236. Therefore, the buyer’s agent’s commission would be $3,236.
While the total real estate agent commission can feel like an enormous amount of money, it’s essential to remember that the money is divided, and the realtor that worked so hard for you only receives a portion of the total.
>>MORE: 6 Tips for Hiring the Best Real Estate Agent
Should I Negotiate a Realtor’s Commission Rate?
While the average real estate commission in Kentucky is 5.7%, this is just a starting point for negotiations. You may be able to negotiate a lower commission rate, especially if you’re working with a buyer’s agent.
However, it’s important to keep in mind that a lower commission means the listing agent will have less motivation to sell your home quickly and for top dollar. Oftentimes a lower commission also comes with reduced services and marketing as well.
A licensed real estate agent works hard on your behalf to get you the best possible outcome. The real estate industry requires tenacity. Approximately 87% of real estate agents quit after their first year. Therefore, be mindful of the worth of the realtor and that the realtor fees are justifiable.
>>AGENTS ANSWER: Is it offensive to negotiate the commission?
The Responsibilities of Real Estate Agents in Kentucky
When using a real estate agent, it’s important to understand the services they should be providing. A good agent will:
1. Market your home: This includes taking professional photos, creating a listing, and promoting your home on various websites and social media platforms.
2. Hold open houses: Open houses are a great way to get potential buyers into your home. A good agent will schedule and hold open houses on your behalf.
3. Negotiate the sale: Once an offer is made on your home, the agent will work to get you the best possible price and terms.
4. Handle the paperwork: The agent will handle all of the necessary paperwork, including the purchase agreement, disclosure forms, and more.
5. Be there every step of the way: A good agent will be available to answer your questions and help you through the entire process.
When choosing an agent, it’s important to find someone with whom you feel comfortable and confident will provide these services.
The Benefits of Working with a Real Estate Agent
There are a number of benefits to working with a real estate agent. They include:
1. Save time: Selling a home can be time-consuming. A good agent will handle all of the details for you, so you can focus on your life.
2. Avoid mistakes: There’s a lot of paperwork involved in selling a home. A good agent will make sure everything is properly filled out and filed.
3. Get top dollar: A good agent will work to get you the best possible price for your home.
4. Peace of mind: Selling a home can be stressful. A good agent will help to take the stress out of the process.
When choosing an agent, be sure to find someone who you feel confident will provide these services.
>>DISCOVER: The Top 25 Real Estate Agents in Kentucky
Why Work with a FastExpert Agent?
When you work with a FastExpert agent, you get:
1. A local expert: All of the agents in our network are local experts in their markets. This means they know the ins and outs of the market, including recent sales prices and trends.
2. The best possible price for your home: Each and every agent in our network is dedicated to working hard to get you the best possible price for your home. They have a proven track record of success in negotiations and will put their experience to work for you.
3. A stress-free experience: Selling a home can be stressful, but the agent you choose on FastExpert will take care of everything for you. From marketing your home to negotiating the sale, they’ll be there every step of the way.
Ready to sell your home? Get started today by finding the perfect Kentucky Realtor for your needs.
