Post # 1
We are getting ready to list our house and have selected a new agent. He said we can set the commision as long as it is between 5-6%. Obviously, we don’t want to spend more money than necessary to sell our house, but at the same time, we don’t want to make our house unattractive to buyer’s agents. Would choosing the lower commission really deter buyers’ agents from showing our house?? Will our realtor be less motivated to work for the lower commission?
Our house will be listed at 200k, so the difference between an agent getting 2.5% vs. 3% (1k) doesn’t seem that huge to me, but maybe I am wrong…
Post # 3
I did 5% because when we were looking for houses, we did most of the searching ourselves, and we fell in love with the house. The real estate agent had nothing to do with us loving the house we bought. I don’t really know much about the whole industry, but I don’t think the commission dictates how they show houses to clients.
Post # 4
I don’t know how big of a deal it is 5% vrs 6% but I do know that realtors do not usualy get to keep the full amount since their agency usually takes a chunk off the top.
I would list at 5% if we were to sell our house today, but only because it’s a super nice house and the pictures will do most of the work.
Post # 5
I’d do 5%. Why spend more than you have to?
Post # 6
@78h2o: Just FYI, the terms of the commission are COMPLETELY NEGOTIABLE. As in 100%, not “anywhere between 5 and 6 percent” negotiable, but fully negotiable. Saying anything like there is a “going rate” is kinda… illegal. That said, the realtor can walk if they don’t like the offer, but it sounds like this guy will stay.
I want to break down how commission (generally!) works for a second.
Say its 6% of 200k =12,000. Half of that goes to the buying side, half goes to the selling side. So your agent’s broker gets that $6000. Half of that goes to the agent, so he would get $3000 (or 2500 if you do 5%) minus whatever other fees his company takes–typically about $200.
I generally want a 7% commission. I’ll walk away from a home that wants to list under 6%. Its so not worth it, especially given the cheap housing market where I live.
(Most of the work a realtor does is not in putting up pretty pictures of a listing or making sure people find the perfect house. Most of the work is the contracts. Sorry, reading things like that drives me batty.)
I’d like to say that buyer’s agents (generally) aren’t going to avoid showing a house due to the commission.
Post # 7
- Wedding: March 2012 - Pelican Grand Beach Resort
You could make a deal with him and tell him 6% if it sells within a certain time window and 5% or 5.5 after that. Either way, those aren’t bad rates. I’ve seen realtors get more.
Post # 8
I’d go 6% in this market. It’s fairly standard.
Post # 9
@Roe: Thanks for the info. I’d heard that the comission was negotiable, but was okay with the range we were quoted. Like I said, I don’t want to overpay, but I also want it to be worth everyone’s while. I don’t want the house to NOT sell because we’re trying to save 1%. I’m not sure where the 5-6% range came from… do you think that the broken might have a minimum they’re required to charge? Or maybe he was saying that’s what most agents charge (thus, most buyer’s agent will expect 2.5-3%)… is that not okay for him to say??
I’ve inclined to go with the 5% because we want our house sold within 1-2 months; we plan to price it right from the beginning and drop the price if we need to. Our house has a granite kitchen and wood floors, so I think it will show well – better than other houses in the same price range. Hopefully it will be a quick sale for our listing agent. There’s also very low inventory in our area right now, so I’m thinking that buyers’ agents will want to show it because there’s not that much else out there… If any of this reasoning is off, let me know!
@mrsSonthebeach: I like your idea too… I’ll keep thinking about that approach!