Real Estate Agent's Commissions (1 Viewer)

[Joel Mack]

I realize it's different everywhere, but I was wondering if anyone had an idea of what a general average might be?

My agent is charging 7%, and was wondering if that's about right, or if it's high...

Any ideas?

 

[Tom Johnson]

That sounds high. I believe the norm is 6% and many are as low as 2%. This is something that is negotiable.

 

[Robert McDonald]

Residential property is usually 6% with commercial usually 10% here, but it is negotiable when you sigh your listing agreement

 

[brian a]

A lot of builders I've been to lately have deals where if you build one of their houses and use one of their agents to sell your exising house, they will charge a lower commission on both. It looked like a pretty good deal.

 

[Dennis Reno]

I just purchased a home and am in the middle of selling mine. My agent charges 6% on the first 100k and 3% after that. I thought it was very reasonable and did not bother trying to haggle.

 

[Kirk Gunn]

6% on the first 100k and 3% above that is sweet !
Most charge 6% in our area, but with the market so insanely hot, the number of "Sale by Owners" has sky-rocketed !
You can also get your agent to reduce their commission to make the sale if you stand firm in the negotiations. They knocked a percent off when the seller and ourselves were ~ 2k off and neither would budge.
My personal opinion of realtors I'll leave out of this civil discussion.

 

[Todd Hochard]

There is a group of realtors in my neighborhood turning out homes at 3-3.5%.

When I sell my home, that's all I'm paying.

 

[Brian Perry]

Before listing "For Sale By Owner" you need to understand that most of the time, half of the 6% you pay to the selling agent goes to the buyer's agent. If you sell the house yourself, you may be severely limiting the number of buyers' agents willing to show your house to their clients.

That said, I think 6% is a ridiculous amount to pay. My agent made over $15,000 for literally a few days of work. I can see when a house sits for months, but there should be a fairer compensation plan for times when a house sells in a day or two.

 

[Trey Fletcher]

here

Looks like I need to consider a move to Florida. We get 2-5% here. 2-3% one agent. 4-5% with a co-broke.

 

[MickeS]

Considering how long most million dollar homes sit on the market (I think Phoenix is averaging something like 3 months, though I'd have to check to be sure as I'm in commercial), I'd say your realtor earned his commission!

Trey, I would bet that he meant that the total sum of the commission was $15,000. I'm pretty sure you suspected this too, but used this as a way to educate us. Even if he did sell a house for $1M, $15,000 is quite a bit of money for a few days work.
You seem to imply that a realtor only sells one home at a time. If I have 4 homes @ more than $1 million each to sell, and make $60,000 in three months before taxes... well, I wouldn't exactly feel miserable.
Of course, if the realtor didn't manage to sell the house for several months, I would be pretty pissed to have to pay him or her almost $60,000 dollars.
I too will leave out my personal opinion about the real estate business.
/Mike

 

[Brian Perry]

Trey,

Mike is right -- I should have said "my agent and her firm."

 

[Tom Johnson]

half of the 6% you pay to the selling agent goes to the buyer's agent

This is a misconception. They are both the seller's agent unless the buyer uses a true buyer's agent, in which case the buyer pays the buyer's agent. I believe what you actually mean is the listing agent verses a competing agent. In this case they will share the commission. Even if you get an agent to take you to see homes and they help you purchase one, they are legally working for the seller unless they are contracted as a buyer's agent.

 

[Henry Carmona]

Hell id be happy with 7%
The best i could get on my undeveloped property was 10% :frowning:

 

[Brian Perry]

This is a misconception. They are both the seller's agent unless the buyer uses a true buyer's agent, in which case the buyer pays the buyer's agent. I believe what you actually mean is the listing agent verses a competing agent. In this case they will share the commission. Even if you get an agent to take you to see homes and they help you purchase one, they are legally working for the seller unless they are contracted as a buyer's agent.

My point was that when you try to sell your home without an agent, you may only be able to sell it to someone who is also not using an agent.

 

[Tom Johnson]

Agreed.

 

[Ashley Seymour]

That said, I think 6% is a ridiculous amount to pay. My agent made over $15,000 for literally a few days of work. I can see when a house sits for months, but there should be a fairer compensation plan for times when a house sells in a day or two.

Certainly is a lot to pay for a quick sale. Let's examine a few other options:

5% if an offer is accepted in the first week.

5.5% before the end of the first month

6% month 2-3

7% month 3-6

8% month 7-12

If I was an agent, I would want to hold off and sandbag my buyers.

Regarding the 7% fee, I have inlaws in Minnesota and they seem to have that fee there a lot out in the small towns. I think when activity is slow that there is a tendency to see higher fees. Also, you get less cooperative agents when the market is slow. A good agent may sell 20% of his/her own listings, but when there is little movement in the market, agents will want to hold on to their listings and try for a double end sale.

 

[Philip Hamm]

As I understand it the general rule is 6% with 3% going to the selling agent and 3% going to the listing agent. Hell of an incentive to sell the houses you list isn't it. I bought my house privately with no agents at all, myself and the seller came up with a fair price based on market comps, split the difference, and laughed all the way to the bank.

 

[Kirk Gunn]

Brian - that's not always true either. We were looking with an agent and were shown a "For sale by Owner". She cleared it with the owner (before showing) that he would cut her 2 %. (perhaps he was desparate ?)

Any situation can be had for the the right price.

 

[Neil N]

Several points:

6% is probably the most common commision for residential real estate, with 3% going to the listing agent and 3% to the buyer's agent. If your agent wants, say 7%, make sure they are offering at least 3.5% to 4% to the buyer's agent. The more they offer to the buyer's agent the more likely your house will get shown. Also, if you're getting a "cut-rate" deal of 5% or less, you want to make sure at least 3% is going to the buyer's agent. You can be sure your house will be the last to be shown if you're offering only 2% to the buyer's agent, while there are 20 other similar homes offering 3%.

When negotiating with a listing agent, you should be able to get a discount if you agree to buy your new house through them. Say a reduction from 6% to 4.5% (with 3% going to the buyer's agent) as long as you use your listing agent for your new home.

This is a misconception. They are both the seller's agent unless the buyer uses a true buyer's agent, in which case the buyer pays the buyer's agent. I believe what you actually mean is the listing agent verses a competing agent. In this case they will share the commission. Even if you get an agent to take you to see homes and they help you purchase one, they are legally working for the seller unless they are contracted as a buyer's agent.

It is entirely possible to have a "true buyer's agent" without the buyer actually paying. You make it sound as if a buyer's agent is a rare thing. Here in Las Vegas, at least, it is more the norm than the exception. One of the first papers the buyer and seller sign is an agency disclosure that spells out exactly who each agent is working for. As long as you aren't actually working with the listing agent, or an agent working for the listing broker, you should be represented by a buyer's agent. As a buyer, I wouldn't work with an agent that is a seller's agent if I could help it.

Sure, a 6% (or more) commision may sound like a lot for what appears to be 2 or 3 day's work. As has been pointed out, however, if there is another agent involved, half of that goes to them. Then a good chunk (up to 50%) goes to the broker. Then factor in all the work done during a month of escrow, loan apps, inspections, etc., the money spent out of the agent's own pocket on advertising, association dues, license fees, cell phone bill, car, gas, etc. Then consider all of the work an agent does that never results in a pay check at all....the client that is shown homes 4 weekends in a row, but ends up buying an open house they go to without the agent, or the listing that never sells......

I can tell you that the big payday for almost no work or effort is mostly a myth. When something like that does happen, it is usually offset by enough dead end work that resulted in zip to make it a wash.

 

[Neil N]

Where's that "Thread Killer" thread when you need it?