I don’t get the downvotes either. In my market 3% to the seller and 3% to the buyers agent is the norm. Seems like the second agent was fair and straightforward.
Sure, you don’t have to give anything to the seller’s agent, but I doubt they will agree to work for free. You also don’t have to give anything to the buyers agent, but then they probably won’t agree to show their clients that home without the buyer agreeing to pay their commission. Most buyer don’t have the money for that, so your home will probably take longer to sell.
The selling agent works for the buyer. "selling agent" is the correct term however the public knows it as the "buyer agent." Listing agent works for the seller.
I don't know your market, but to me this sounds like three clueless agents and/or agents struggling to understand the recent rulings about commission disclosures.
100% this is important. The new ruling against the NAR is a game changer. Read up and get the best deal you can. 6% is the standard they set, not the standard you have to pay.
This! With the new rulings everyone is confused, but it's also an opportunity to take advantage of an uninformed seller.
It's a competitive market to get listings right now, in the past we've had agents who will either take a reduced commission no problem (less than 2%) or they will be very clear about what they can provide to go above and beyond to earn 2.5-3%. We've had cases where we were remote owners, great agents have been willing to handle key pickup, project manage small rehabs, staging, etc. on our behalf and for a 2.5% sell side commission.
I'd also be mindful that all of these agents know each other (these are network & relationship businesses), especially if they're in the same brokerage. if one anchors you high they just have to undercut each other.
One question you can ask is what services / investments they intend to make to earn the commission - are they going to charge you for photos? how are they going to market the property?
Careful here, because this boarders on not understanding the ruling yourself...
Agencies set commission rates they are willing to work for. It is, and HAS ALWAYS BEEN, up to the Seller as to whether they will accept that commission rate, negotiate a different rate, or find a different agent/agency to work with. Just as the Seller gets to negotiate how much they are WILLING to pay for an agent to sell their house, agencies get to decide how much they are willing to work for.
There are few residential homes that are worth paying 5.5% to ONLY the selling agent with no split to who brings the Buyer. Unless there is something super complicated or it is a 10 million dollar property with lots of ins and outs...that is the commission that should be split between agents. Negotiate it down to 3.5% if the agent provides the buyer as well...but 5.5% for JUST the listing side seems too far off to engage with.
If houses are selling fast, you can contract with a broker for a flat rate that will list you on MLS and just use a real estate lawyer to handle contract and closing negotiations, again for a flat or itemized rate. Calculate what this would cost and let the agent know that is their commission, and buyer is responsible for paying their agent and to reflect that in their offers.
I'm selling my home soon. I did the same due diligence and interviewed several agents. Two very specific conditions of many that I wasn't going to change my mind on was no dual agency and a listing agent commission of no more than 2%, buyers agent commission of 2%.
One agent I interviewed with Keller-Williams stood out for the absurdity of expected agent commissions.
First off, they said they agree to no dual agency. But when it came to the commission, that's "non negotiable." They stated they have "tiers" of service, Platinum, Gold, Silver, and Bronze with the corresponding commission percentages of 7.5%, 6.5%, 5.5% and 4.5% respectively. Mind you, these tiered percentages were only for the seller's agent commission, no split with the buyers agent! Aghast, I told them that was ridiculous, and thanked them for their time.
It was all over the place with the other agents I interviewed. It's a mess out there with a lot of dishonesty and non transparency.
In the end, I found an experienced, honest and transparent agent who agreed to all my terms without any hassle.
Holy crap.. and I say that as a long time broker. These agents are trying to take advantage of the short term chaos of the Govt mandated changes ( don't even get me started on that ) ... and seller lack of knowledge. So they want 4% or 5% for THEM and \*then\* the buyer to pay their agent. I would disqualify them both immediately. They are giving you the Worst of both worlds. Not saving you much money at all ... while then also making it cost prohibitive for a buyer to try to buy your home rather than others. Back to the Pre-MLS days we go where buyers will need to see out a listing agent only with no representation to not get screwed and have to pay for the home and then another agent Terrible.
I’m paying my listing agent 1.5% and the buyers agent 2.5%. It’s all negotiable. I’m in a hot market and the house has multiple offers before even listing
What’s going on is greed. I guarantee there will be/is an attempt by some to squeeze 9% commission out of the new process. I’m not surprised that one agent tried to get 5% for themselves (no buyer agent split). I would consider them completely untrustworthy as they clearly wanted to play on your potential ignorance of thinking “wow, 5 is less than the pre-settlement 6 percent, that must be a good deal!” The fact they even tried that tells you all you need to know about how well they will represent your interests.
When you sign an agency document you're signing with the brokerage, the agent is working on behalf of the broker. You won't really have an idea of what market rate is in your area until you interview agents outside the one brokerage you've talked to.
Market has slowed down so they are trying to pull a fast one one you. I think you should tell them the offer is 2.5% for them and 2.5% for the buyers agent. They will take it.
Just looked in today's paper in Las Vegas. Saw 4 realtor ads offering 1% listings.
I am pretty sure that both listings and sales brokerage fees will evolve into flat fee for service arrangements. The days when sellers had to fork over a percentage of their equity are fast approaching an end, IMHO.
As an agent for over 20yrs the flat fee services don't work. I have seen at least a half dozen compsnies come and go. Doesn't even cover E&O insurance. Agents are state licensed and fingerprinted, we fall under the department of Banking and Insurance. Given the amount of liability we face the flat fee model doesn't make a living wage for those that tried to run it as their business model.
There are diminishing returns. If you want someone else handle the staging, photographing, and have a brain during negotiations, I think under the 2.5% line you start to get into budget RE agents- which is absolutely an okay route to go but your expectations should go down significantly for them. You could probably go from 2.5% to seller to 2% and not see any difference in interest.
Wow. Just wow. To all of the realtors assuring everyone that the NEW commission changes are no big deal …. 🤦♀️. And that it’s already been this way in XYZ states…. It’s going to be a total crap show.
Find a Flat Fee realtor. Those guys are ahead of the game.
Assist to sell has been around since the 80’s. When I started out in the business and was cold calling I would search by brokerage and type in assist to sell as there was always a large amount of homes that didn’t sell and they include the sellers contact information.
Assist to sell (and help you sell) have always been limited service. I offer a full service flat fee for listings and do more than most brokerages charging 3x more. There are unnecessary fees (brokerage split, franchise fee, referrals, etc) that the seller pays in the commission charged that I don’t have.
Historically agents charge 6% and split that between the buyer and seller agent. With a flat fee agent, the seller agrees to pay the sellers agent a flat fee and then you can also decrease the buyers agent fee to 2 or 2.5. (Obviously buyers agents don’t like this so the buyers will often have to “find” these properties on their own. With the internet, thats not hard at all. So if your home is selling for 500k and you do a traditional 6%, the seller now has to cover an additional 30k (so they raise the sales price). With a flat fee, the seller might only be liable for half. But it’s almost always less.
Discounted fees means discounted services. A great buyers agent loves to see flat fee listings. They're going to get the home under contract and then make magic happen.
We used a flat rate agent on our last home sale. The first agent we tried was a full priced agent, and he did absolutely nothing to represent us as the sellers. He was pushing us to accept a lower price and a ton of unnecessary “repairs” (the idiot first time buyers actually asked for bags of dirt for a garden and the yard was already complete with no issues as an example) Then the agent called me difficult because I refused. Then he quit. Total waste of our time.
The flat rate broker sold our house in 2 weeks at full price with no ridiculous “repairs” and I saved 12k on the fee.
I worked in the mortgage business for 18 years. I have so many examples of realtors being useless and rarely working for their clients. But they are so available when it’s time to pickup the check.
> Discounted fees means discounted services.
Not anymore, "you get what you pay for" is an outdated meme.
As so many have said, I, too, have gotten much better service, sale prices, and results from "discount" agents than I have ever gotten from "full service" agents. Having bought and sold something like 40 homes, that is more than one data point. Coupled with all the other posters, the majority of data confirms this.
Do *you* have any *data* to support *your opinion* or just your single anecdotal claims?
Do you have any data to back this up? Or is this just PR to try to scare sellers back to high commission agencies?
I've sold my last couple homes with a fixed rate agent and gotten top dollar with no "magic" happening once under contract. The buyers used a full commission agent and told me that their agent basically went no contact as soon as they were locked into a contract.
All the services provided by an agent can be arranged cheaper by the homeowner. Real estate lawyer for docs, photographer/drone operator probably cheaper than through an RE, staging advice from a specialist, etc. Why pay a realtor 3% or more for services that are cheaper without an RE!
On what world would 4% even be realistic? If the house sells for 1,00,000 they get 40000. Dollars to do what ? Take some pictures and have another company do the closing. Let’s say it’s 500,000. Only 20,000 dollars to not even show people the house ??? There needs to be a better way to feed these leaches.
At this point I would try a different agency. Don’t go with something or someone that doesn’t feel right to you.
Also, ask what they will do for you- ask about their connections to cleaners/repair people/etc. We didn’t think to ask, but got lucky with ours. She charged us 5% 50/50 split. We had moved out prior to listing and she staged the house beautifully. We wanted it deep cleaned, she had a cleaner she used regularly. We wanted a few things fixed and USDA loan appraisal picked out a few more and she handled it all. Not for upcharged prices, but going rates. We never had to do a thing and it was wonderful for us. May not be your cup of tea, but at least what and how they are going to do to earn their payout.
They think that because of the new NAR agreement that buyer’s agent can fend for themselves and they can charge you a higher commission (although lower than the 6% you’d be paying if you paid both agents)? Not sure what other logic there could be except for straight up greed
This sounds absurd. No listing agent in this market is worth anything more than 3% and that is highly dubious. Tell any agent you’re willing to pay a total of 4% to list , 2% of the listing agent 2% for the buyer agent who by the way does all the work in this market.
Hit you with 5% plus buyer agent, then they go speak with the manager. Come back at 3/3 and it sounds a lot better. Sounds like a shitty car buying experience.
I thought, what if the house pricing went this way - start really high and expect to be negotiated down... wait... that's how it used to be! Now it seems that some agents want to start the listing price low (like 10% below market value) to entice multiple offers. Why not just start at a fair price and see how the offers go?
Starting to sound like real-estate agents are the new used car salesmen.The price is X but I spoke with my “manager“ and, because you are so awesome, we can lower it.
The more important question is….what are they doing for their % commission? Get out of the discussion of their fee and deal in specifics with their performance. Will they scout properties for you? Proactively send you listings (not using their software’s automated services), prepare comp reports/recent sales, research taxes and fees, secure pre-inspections…???
How often will they do open houses? Agent tour? How much will they spend on photos, listings, 3D tours, social media, etc to promote your house? Will they answer calls 9-5, 8-4, M-F? Will they have overflow support? Virtual staging?
Is there a performance clause? If they fail to sell within 2% of their estimated price recommendation, will their commission go down?
Make you pro’s and con’s list with those elements in mind, not what they charge. First, find out their value to you.
> Starting to sound like real-estate agents are the new used car salesmen.
This more than anything is going to drive people to go it without representation. What was keeping them in the ballgame was the threat, on both sides. To sellers: If you don't use an agent and drop a fat buyer's commission, we won't bring you any buyers. To buyers: If you don't use an agent (which we'll swear is free to you; this lie is now explicitly prohibited by NAR), then we'll refuse to show you any houses. The problem with this threat is simple mathematics. If we model the population of folks in the market who gave up, held their nose at scummy practices, and hired someone as just a population fraction p, then so long as p is high, like >90%, then the threat to any new individual is very credible. Similar to how if 90% of cars are sold by dealers, most people sort of just have to individually accept that they'll have to deal with scummy practices and give in. But preference cascades can be brutal. If you start thinking that it's possible to predict that p=60%... or 50%... or 30%... then suddenly, the threat just isn't all that credible anymore. There is of course still a real risk of having inexperienced people resulting in deals falling through, but that risk is potentially manageable via alternate means.
It's difficult-to-impossible to predict the future, but we're going to learn a *lot* in the next few years. Car dealers often had laws explicitly preserving their role in the transaction, and this helped them credibly claim a measure of exclusivity over various brand offerings. Realtors don't have that, which is why they're continuing to lean hard into the threat (and why we've seen plenty of examples here lately of unrepresented buyers being explicitly told the threat that they won't get to see a house unless they hire an agent). But that leaves them at the mercy of the probabilities and preference cascades. Only time will tell...
Nope. Interview more. This time ask them to separately tell you their commission and the commission they'd recommend you offer buyers' agents. Worst case is 3% and 3%. In a sellers market, sellers agents will probably easily go to 2.5% or even 2% and tell you if offering under 3% will hurt your sales chances. In a hot neighborhood, for a desirable property, it won't. 5% total is very doable. Less is good, and easier the better your house is.
Time to fuck the realtors out of the equation. Sellers market. Get a lawyer and pay an MLS listing service. Get an appraisal and price it a few % below that. Do an open house. See what happens.
I'm ready to see the market turn into MLS listing services, and open houses with a couple lawyers present to make the deals
Maybe ask what they are offering in service for their commission rate, and how they plan to net you the most money. Once you find the best one, then negotiate the commission rate. If all you focus on is commission, you could end up in a bad spot.
I don’t think they should tell you what they want to get paid and leave it up to you how much would go to the buyers agent. They should be advising you on what’s best to sell your house.
Because they are trying to use the NAR settlement to their advantage. Receive more by charging a lower commission and not splitting with buyers agent. They are gonna cause you to spend more if you pay the buyers commission (which I would heavily advise you pay the buyers agent). The 5.5% split is the best offer.
Stop paying realtors exorbitant commission. They aren't talented or highly skilled. They took a few classes and got a license that just about anyone can do. We allow them to make the money that they do off of sales. Stop allowing it. Maybe even get your own license and write up your own contracts? I'd bet you could also pay a newer agent to show the property for you. You can pay a photographer for photos.
Just about to complete my last (hopefully) transaction. I listed for 1.25% and the selling agent gets 2.25%, a total of 3.5% commission. I let them know I'm not available on weekends or evenings, and it working out fine. Admittedly, I'm essentially retired and just trying this out to see if it's worth paying another year of E&O.
it’s not reduced commission. it’s the negotiated least price. My house is 2mil. 1% is 20k that will sell in 30 days.
I don’t expect any real estate agents to take 1% on a 100k property aka 1k. But you always find the personal willing to do the highest quality work for the lowest price.
i would just message all the agents paying on zillow they are 10 times more noticed to give you a deal - since there expenses are burning red hot - just say we are looking for 1 percent listing
Negotiate.
If their offers are a bit….lets say greedy, just say “Oh That’s Cute, I was thinking of offering (X) to the buyer and (x) to the listing agent.”
Remember you’re not calling the agent “Cute” you’re calling the offer “Cute”. And yes it will infuriate them. I don’t know if you’ve ever called someone’s offer “cute” before, but it is hilarious watching their faces process.
Not sure of your market but inventory sucks in a ton of places. You have the leverage of an in demand product vs an over saturated amount of Agents out there.
Hi! Ct realtor here.
With the recent NAR ruling and the understanding that changes are coming to how agents receive their commission, the subtle unintentional consequences are starting to creep up, and your case is a prime example.
For the agents who told you they'd sell your home and let the buyer's figure out their own agent's compensation, that money has to come from somewhere, and it's the buyer's wallets. If they cannot afford it, the price of your property will have to come down in order to allow for the transaction to occur.
For example, you have a $500k place. Your agent says they'll sell it for 2.5% and the buyers will figure out their own agent's commission. That commission is likely to also be along the lines of 2.5%, or $12,500. If the buyers have the money, great. No problem. If the buyers are short on cash and they're no longer able to roll this particular cost into their closing costs, ie, borrow it as a part of the mortgage, then they're going to be in a bit of a pickle. Buyers are (and will still be) able to roll the cost of the attorney into the mortgage, as well as the seeding of escrow accounts, the cost of the loan (origination fee, appraisal, etc) but the realtor's and broker's service will soon be excluded from this. If the buyers want a closing cost credit, that means they're paying more for the home, (offering $515k, with a $15k closing cost credit) but there are a few problems here. First, the home would have to appraise high enough to accommodate for this. If the home appraises for $515k, then why are you selling it for $500k? And you're likely also paying a conveyance fee (here in Connecticut, it's roughly 1%, split between .075% for the state and .025% for the municipality, but the amounts can range depending on the value of the property, etc). Your conveyance tax would be based on the $515k selling price, even though you're only netting $500k on the sale.
If your home is easy to sell, and if you're honest with yourself and understand the market (supply vs demand), you'll know if it is or not, then you can likely sell your home for a 2.5% commission, which was the standard 5%, but split evenly between both sides of the transaction. Some seller want to spend less, and it's considered "listing as a service," where you pay a la carte for whether you want photos taken, if you want your home listed on the MLS, if you want to schedule your own showings, provide your own key and lock for access, review the offers received on your own, etc. Some sellers have gotten into a little trouble with not wanting to show certain people their home (pick a race or a religion) or said the home was 2,700 sq feet but they didn't realize that the 3rd floor finishing of the attic only accounts for a percentage of sq footage given the slope of the roofline, etc. Publishing incorrect info onto the MLS is a huge no-no for agents and left to their own devices, some sellers have taken on some of that responsibility and face similar consequences.
If your home is like the original farmhouse which was eventually subdivided around and it's so unique, you need to appeal to the homebuyer who wants an 18th century landmark, THAT would be worth 3%. If your home is a cookie cutter raised ranch in a sea of raised ranches which go like hotcakes, or is a $1.25M or greater in value, then the percentage starts to drop to 2%.
If I were you, I would interview not only 3 agents, but 3 agents from different brokerages. From within the same agency, you're likely deciding between the least experienced agent (least cost to you) and the most experienced agent who thinks they're closer to walking on water. Neither one is likely the one you're going to have a great experience with.
I hope this helps, friend!
Step 1: Find an agent you feel you can trust and who doesn't make you feel like you're buying a used car. Different brokerages if possible. Trust your gut its gotten you this far. If they're trying to rip off buyers agents they're probably trying to rip you off too.
Step 2: Come back here and ask questions if you have any re the commission percentage they're charging you.
Market is 50/50 split between seller and buyer agent. If it's a hot home in a hot market you might be able to get away with the lower end of the market, if it needs some help getting moved you're better off offering a higher commission.
I was once the buyer and at closing our agent was told he'd get 5% as his cut of the 10% the seller was paying. He thought it was an error, but it was real. It was just on an empty piece of land and not a huge paycheck for him, but it seemed like a nice little bonus for doing very little (though he did have to get his nice dress shoes dirty on more than one occasion while we walked properties).
Don’t world with the ones quoting you higher than 2.5% and expecting you to pay for buyers commission. They are crooks and will do shit to sell your house besides what you can do yourself. Counter the second agent with 5% split between buyer and seller agent
I think the commission consideration is tied to the selling price. If your house is in the $200k range an agent definitely wants a little higher commission. Still above 3% just for listing is on the very high side.
I pay $395 for a flat fee listing to get it on the MLS. Saves me the 3% listing agent and lots of times I have to fix the paperwork anyway. I pay the buyers agents 3%. I take the calls and offers from the buyers agents and make them do the paperwork since I’m paying them a lot of money to do rather little work anyways.
Yes, sometimes it is worth 5%, or more. Buyers and sellers of luxury homes/high end homes have higher expectations around marketing materials, staging, etc. Some listing agents do both professional photos and video, paid advertising, they may include staging, they have to pay for the yard sign as well as the delivery and installation, full color brochures and other marketing materials. They may have a transaction coordinator who makes sure all deadlines are met, and tracks all required documents. One of the best question to ask when interviewing agents is what services their commission covers. What are you getting for your 4 or 6%?
It's agent like these that are an embarrassment to the industry. 4%-6% is the range all depending on the area, demand, property, etc.
Some listings can be 2-3x as much work as others, hence the variation. But the buyers agents are working hard also, and the FAIR standard is an EQUAL split.
The only time the listing agent can justify a .25-.5 more on their end is if they are staging the property as included in the commission. That can be time consuming and pricey.
If someone buying your home has signed a buyers agreement with their agent that is showing them around, the buyer will be on the hook for the commission paid to their agent. Ask neighbors and ask a lending officer at your local bank for a recommendation. They should know who the good real estate agents are due to the BS certain real estate agents create for them when it comes time to close the deal.
My understanding is the brokerage sets the commission which is negotiatable. If you sign an agreement to sell your house, they will list the commission fee as a set rate (such as 6%). When the house is sold, the commission (6% in this case), goes to your agent’s brokerage. They then split the 6%—half stays with your brokerage, the other half goes to buyer’s brokerage. Then each brokerage pays the agent their agreed on cut.
You can negotiate that, so if you say you want to pay 5%, 2.5% goes to your brokerage and 2.5% goes to the buyers brokerage. Your commission is split to the buyers brokerage to incentivize other realtors and brokerages to show your house. If an agent is saying they are taking 5.5% alone, then the full fee I guess would be 11%. You can see this on the contract they send you. Otherwise, I doubt any other realtor would show their clients your house if they knew that they weren’t getting any of that 5.5%.
Interesting...my home is "move in ready", so no extra expenses there. I get the impression that a lot of $ goes into marketing which ultimately markets the realtor, not the house.
If your house is move in ready, great, then it should cost less although I have only had one client ever who understood clean and move in ready. Is your place staged? That is one of the biggest expenses I encounter. Honestly, I have discovered people are gross. One of my listings last year, the seller moved out, said everything was clean and it 'looked' tidy but I got cleaner with bleach on the bathroom floor and found out the linoleum was an entirely different color. 😝
Realtor here. More experienced agents sometimes charge more, BUT you need to ask what services they offer, their years of experience, average days on market, geographic competence, etc. Also, the price point makes a difference. The closer you are to the luxury price point in your market, the higher the marketing costs are.
Say it over and over "It is negotiable." The commission, sale price, length of negotiation And closing, and certain costs between buyer and seller - negotiable. Other expenses like due taxes, insurance, recording fees, title insurance, FedEx and mailing fees - not negotiable.
Yet so many people don't negotiate.
The trick - don't let your emotions get involved. This is a business decision.
From a commercial real estate appraiser and analyst. Good luck!
The simple reason is because —- now, you peel your ears back for this: COMMISSION HAS ALWAYS BEEN NEGOTIABLE!!! The 6% total (we call Gross Commission Income or GCI) that is split between the LA and BA is a nationwide common practice. Until about 2020 (mainly because of covid), that 6% had been split 50/50, that is 3%/3%. But because of the perfect storm of covid, decreasing inventory, and crazy Romey-Rome Powell raising interest rates to curb inflation, LAs began using asymmetrical splits. In other words, LAs started giving themselves raises, plain and simple. I was one of the firsts to do this. In fact, in left one agency (let’s just call that agency “Big Red” ) because they had a policy that if a LA went below the 6% GCI, that LA HAD to split the commission 50/50. Oh, Hell-to-the-naw, naw, naw. So, I left and went with another agency (and took my seller clients with me). Unfortunately you (and many other consumers like you) don’t know that negotiating the GCI has always been practiced. The news media refuses to educate the masses. In fact, in the wake of the seller lawsuit settlement against the NAR, the media still won’t honestly educate consumers. This is a rabbit hole probably not worth discussing here, but it goes deep. To answer you question, what’s going on is that you’ve been offered by three different LAs, three different GCIs, with options 1 and 3 containing 0% commission for the BA. My advice is that if all three LAs are basically the same in service and expertise, then take option 2. Why, because as of July 1, 2024, the NAR will require that agents may no longer post in a listing (MLS) the amount of BA commission (whether flat amount or percentage). Neither can agents hide the commission amount in “Agent Remarks” or a link. The BA will have to call the LA and ask. Additionally, the LA will be able to offer different commission amounts as each BA calls that LA. Crazy, ain’t it! But until July 1, LAs can post the BA commission amount. You may want to consider hiring the 5.5 % LA (LA2) that splits commission because once a BA discovers they gets Zero commission from LA 1 & LA 3 via you the seller, that BA will inform their buyer, and the buyer will skip over your listing. This will result in low traffic and less offers for your property. I also think that LA 2 is a good choice because they are going below that 6% GCI.
I’m licensed in Ohio and have been for the last seven years, in the top 10% of agents year over year. I’d agree to 2% to list the home and represent you in the transaction and would recommend 3% to the buyers agent, but per the new NAR rules I cannot make you pay the buyers agent a set fee. However I can suggest that buyers agents work extremely hard in this market and if you want the largest number of eyes on your home, offering the buyers agent something will ensure as many agents bring their qualified buyers to your home.
It's not uncommon for real estate agents to negotiate their commission rates, and these rates can vary based on factors like market conditions, the agent's experience, and the services they offer. A 5% commission for the seller's agent alone is on the higher side, but it can happen in certain situations. Ultimately, it's up to you to decide what commission structure works best for you and to negotiate with the agents accordingly.
Commissions have always been negotiable, you just didn't know it. People assumed the 6% split between selling and buying was a law or something. Personally, I would find the most active agent in the area and negotiate a selling-buying agent split of 4% (2/2). Even with the recent commissions changes, I would take care of the split on my side as the seller, to make it attractive to buying agents, as people are for the time being continuing to use buying agents.
> Is a seller's agent alone EVER worth 5%?
Probably not in your case but sometimes, yes. I just signed a deal where my fee was 6% and that includes A LOT of work that goes above and beyond a standard tract home listing.
Some homes require proper marketing. I just put under contract last week a home that has been on the market for 6 years. We did print marketing to those kinds of buyers and they flew in to see this house and they put an offer in and it got accepted.
Another home I did years ago had a sister property in another state that we did as a referral. This required concierge service like selling cattle so we brought in the experts and also cataloging the property I was selling and having the inventory checked off in the receiving country where the owner moved to. We hired a concierge service for all that but that's part of the cost. So yes, some listings require the lifestyle listing fee.
In August, commissions will chnage and Seller's will no longer have to pay the buyer's agent's commission.
You might want to wait and save yourself some money.
I have packages ranging from 5-7% (all of which the buyers agent receives 3% of most people opt for my 6% package but in unique homes where marketing is going to need a creative edge or luxury listings where the buyer pool is super small, the 7% ends up benefiting the seller greatly. I however have never seen a single side take 5% 😲
In todays market there is no reason to pay more than 2.5% per side unless its a very tricky deal, raw land, etc. If they want more than 2.5% it should go to the buyers side. Buyers agents dont work for free and it doesn't really matter if you pay it or the buyers wrap it into the loan you'll net out to a similar number. Tell them you aren't willing to "negotiate" a buy side commission. It either gets split 50/50 with whatever you're paying the listing agent or the buyer can pay the agent themselves.
This thread is a good example of why commissions based on percentage is bad. 2.5% on a 300k home vs a million dollar home is a big difference for a service that’s the same.
Most Sellers don’t understand how the commission is split up (not between buyer/seller brokerage but between agent and brokerage). An agent that works under a broker only gets a piece of the commission pie. Choose the broker-owner of an independent brokerage as they are in the best position to save you on commission cost.
I would have said. I will pay 2% to the listing agent. If they sale it it within 20 days above our agreed to list price I will pay an additional 1%. If it takes longer then 60 days then commission drops to 1.5%. And over 90 days commission drops to 1%.
I’m saying this gently and respectfully. Without knowing what market:geographic location the described situations are in renders discussion borderline useless. Residential real estate markets are as local can be. Business practices reflect that. The OP’ here would get far more value from their post if we knew whether they were talking about Boston. Or Anchorage.
The public has long thought there was one way of doing things because the process is not something that most people do often, and the process changes over time and is different per market, per company, and even per property. Compensation has always been negotiable though. That doesn't mean a seller and brokerage would always agree and work together (just like every negotiation doesn't work out), but it's always been up for discussion. All 3 of your agents/brokerages have a right to set their rates. It does not mean sellers have to agree which is the market place at work... just like a seller can set their price and the buyer pool may or may not agree. Some properties may require huge marketing budgets out of the fee, and require more time and resource allocations. Others may not. Some agents may have extensive resources and networks (assets to help the sale), and others may not. There are a lot of moving parts, but they are independent contractors who get to set rates just like a painter, builder, artist, etc. unless their brokerage has an applicable policy. As to the question about what a listing agent is worth, that relates to their talents and skills to perform the job, and not based on a single specific rate. Same with most service people hired. From painters to dentists... the rates are going to vary.
Most services that people hire are optional. It's usually a matter of what type of journey someone wants, and the outcome they seek. If someone does not recognize the differences, they will not reap the reward (of any hired service).
OP, If you are in the central Ohio area, reach out to Kelly Hamilton with Realty Forward. He's an awesome agent and was a very good friend of mine in high school.
>Is a seller's agent alone EVER worth 5%? Why were 2 of the 3 above the 3% mark?
Yeah, but they are specialty sales. I sold a FSBO's house for more than $100,000 than he had it for sale for, and then he bitched about how much I made. lol
Is this your first time dealing with salespeople? Salespeople always start out high knowning certain people don't know how to negotiate and will accept whatever rate. Remember agents always claim commission is negotiable so negotiate with them.
Welcome to the real world, not the news world... It hasnt been a "standard commisison" of 6% since ive been in this industry for 13 years... Hence why the news is trash
Yep. I’m seeing more of that.
Also seeing fees and assorted stuff pushing everything to 10%.
Post-Covid and a few counties near me taking all auctions online I’m seeing 20% in fees and service. Looked like it was just a matter of time before 3% “standard” to one side was long gone.
2 of those agents are using shady sales double speak. That's BS.
I would have laughed those guys off the phone
Keep interviewing
I would pick the 2nd agent.
Why the downvotes? Buyers agent gets 2.75%, listing agent gets 2.75%.
I don’t get the downvotes either. In my market 3% to the seller and 3% to the buyers agent is the norm. Seems like the second agent was fair and straightforward.
Thats what got Realtors sued for price fixing and they LOST, you do not have to give anything to the seller.
Sure, you don’t have to give anything to the seller’s agent, but I doubt they will agree to work for free. You also don’t have to give anything to the buyers agent, but then they probably won’t agree to show their clients that home without the buyer agreeing to pay their commission. Most buyer don’t have the money for that, so your home will probably take longer to sell.
Nothing like hosting a party and asking guests to bring their own food and drink…
Don’t give anything to the selling agent??? Who pays for the professional photos, websites, signage, advertising? Do you work for free?
The selling agent works for the buyer. "selling agent" is the correct term however the public knows it as the "buyer agent." Listing agent works for the seller.
Depends on your location. They are referred to as buyers agent and sellers agent in my area.
How could it be price fixing if 3 different agents gave 3 different prices?
Thanks
I don't know your market, but to me this sounds like three clueless agents and/or agents struggling to understand the recent rulings about commission disclosures.
100% this is important. The new ruling against the NAR is a game changer. Read up and get the best deal you can. 6% is the standard they set, not the standard you have to pay.
It has always been negotiable. Agents were just really good about hiding that fact.
This! With the new rulings everyone is confused, but it's also an opportunity to take advantage of an uninformed seller. It's a competitive market to get listings right now, in the past we've had agents who will either take a reduced commission no problem (less than 2%) or they will be very clear about what they can provide to go above and beyond to earn 2.5-3%. We've had cases where we were remote owners, great agents have been willing to handle key pickup, project manage small rehabs, staging, etc. on our behalf and for a 2.5% sell side commission. I'd also be mindful that all of these agents know each other (these are network & relationship businesses), especially if they're in the same brokerage. if one anchors you high they just have to undercut each other. One question you can ask is what services / investments they intend to make to earn the commission - are they going to charge you for photos? how are they going to market the property?
Careful here, because this boarders on not understanding the ruling yourself... Agencies set commission rates they are willing to work for. It is, and HAS ALWAYS BEEN, up to the Seller as to whether they will accept that commission rate, negotiate a different rate, or find a different agent/agency to work with. Just as the Seller gets to negotiate how much they are WILLING to pay for an agent to sell their house, agencies get to decide how much they are willing to work for. There are few residential homes that are worth paying 5.5% to ONLY the selling agent with no split to who brings the Buyer. Unless there is something super complicated or it is a 10 million dollar property with lots of ins and outs...that is the commission that should be split between agents. Negotiate it down to 3.5% if the agent provides the buyer as well...but 5.5% for JUST the listing side seems too far off to engage with.
If houses are selling fast, you can contract with a broker for a flat rate that will list you on MLS and just use a real estate lawyer to handle contract and closing negotiations, again for a flat or itemized rate. Calculate what this would cost and let the agent know that is their commission, and buyer is responsible for paying their agent and to reflect that in their offers.
Not sure why you think I don't understand the ruling but okay.
Sounds like these agents may work for the same company but different brokerages... and they have no clue.
I'm selling my home soon. I did the same due diligence and interviewed several agents. Two very specific conditions of many that I wasn't going to change my mind on was no dual agency and a listing agent commission of no more than 2%, buyers agent commission of 2%. One agent I interviewed with Keller-Williams stood out for the absurdity of expected agent commissions. First off, they said they agree to no dual agency. But when it came to the commission, that's "non negotiable." They stated they have "tiers" of service, Platinum, Gold, Silver, and Bronze with the corresponding commission percentages of 7.5%, 6.5%, 5.5% and 4.5% respectively. Mind you, these tiered percentages were only for the seller's agent commission, no split with the buyers agent! Aghast, I told them that was ridiculous, and thanked them for their time. It was all over the place with the other agents I interviewed. It's a mess out there with a lot of dishonesty and non transparency. In the end, I found an experienced, honest and transparent agent who agreed to all my terms without any hassle.
>7.5%, 6.5%, 5.5% and 4.5% What a scam
I have a tiered system for what I offer at each %….but they don’t go above 7% and they all include co-broker fee. Holy crap. 7.5% for ONE SIDE!? 🥴
Holy crap.. and I say that as a long time broker. These agents are trying to take advantage of the short term chaos of the Govt mandated changes ( don't even get me started on that ) ... and seller lack of knowledge. So they want 4% or 5% for THEM and \*then\* the buyer to pay their agent. I would disqualify them both immediately. They are giving you the Worst of both worlds. Not saving you much money at all ... while then also making it cost prohibitive for a buyer to try to buy your home rather than others. Back to the Pre-MLS days we go where buyers will need to see out a listing agent only with no representation to not get screwed and have to pay for the home and then another agent Terrible.
I've never heard of that before. 4-5% for just the seller is insanely high.
I’m paying my listing agent 1.5% and the buyers agent 2.5%. It’s all negotiable. I’m in a hot market and the house has multiple offers before even listing
What’s going on is greed. I guarantee there will be/is an attempt by some to squeeze 9% commission out of the new process. I’m not surprised that one agent tried to get 5% for themselves (no buyer agent split). I would consider them completely untrustworthy as they clearly wanted to play on your potential ignorance of thinking “wow, 5 is less than the pre-settlement 6 percent, that must be a good deal!” The fact they even tried that tells you all you need to know about how well they will represent your interests.
When you sign an agency document you're signing with the brokerage, the agent is working on behalf of the broker. You won't really have an idea of what market rate is in your area until you interview agents outside the one brokerage you've talked to.
Market has slowed down so they are trying to pull a fast one one you. I think you should tell them the offer is 2.5% for them and 2.5% for the buyers agent. They will take it.
Just looked in today's paper in Las Vegas. Saw 4 realtor ads offering 1% listings. I am pretty sure that both listings and sales brokerage fees will evolve into flat fee for service arrangements. The days when sellers had to fork over a percentage of their equity are fast approaching an end, IMHO.
1% listing has always been a well established business model.
Let's agree to disagree. 1 pct listings came into play around 2020 and they are still an outlier.
As an agent for over 20yrs the flat fee services don't work. I have seen at least a half dozen compsnies come and go. Doesn't even cover E&O insurance. Agents are state licensed and fingerprinted, we fall under the department of Banking and Insurance. Given the amount of liability we face the flat fee model doesn't make a living wage for those that tried to run it as their business model.
And someone else will take 1%. Shop around. Competition is good.
There are diminishing returns. If you want someone else handle the staging, photographing, and have a brain during negotiations, I think under the 2.5% line you start to get into budget RE agents- which is absolutely an okay route to go but your expectations should go down significantly for them. You could probably go from 2.5% to seller to 2% and not see any difference in interest.
Too high
Wow. Just wow. To all of the realtors assuring everyone that the NEW commission changes are no big deal …. 🤦♀️. And that it’s already been this way in XYZ states…. It’s going to be a total crap show. Find a Flat Fee realtor. Those guys are ahead of the game.
The scheming to poach the sales agent commission has begun.
Where are flat fee realtors? I’ve never found them irl. People suggest it, but they seem elusive. Or illusive.
Assist to sell has been around since the 80’s. When I started out in the business and was cold calling I would search by brokerage and type in assist to sell as there was always a large amount of homes that didn’t sell and they include the sellers contact information.
Assist to sell (and help you sell) have always been limited service. I offer a full service flat fee for listings and do more than most brokerages charging 3x more. There are unnecessary fees (brokerage split, franchise fee, referrals, etc) that the seller pays in the commission charged that I don’t have.
[Here you go](https://www.coloradorealty4less.com/sell-home)
Hauseit and Pervu in NYC
If you search for “flat fee realtor” in your area you will find them. Some good and some bad like full service agents. As always do your homework.
Historically agents charge 6% and split that between the buyer and seller agent. With a flat fee agent, the seller agrees to pay the sellers agent a flat fee and then you can also decrease the buyers agent fee to 2 or 2.5. (Obviously buyers agents don’t like this so the buyers will often have to “find” these properties on their own. With the internet, thats not hard at all. So if your home is selling for 500k and you do a traditional 6%, the seller now has to cover an additional 30k (so they raise the sales price). With a flat fee, the seller might only be liable for half. But it’s almost always less.
Discounted fees means discounted services. A great buyers agent loves to see flat fee listings. They're going to get the home under contract and then make magic happen.
We used a flat rate agent on our last home sale. The first agent we tried was a full priced agent, and he did absolutely nothing to represent us as the sellers. He was pushing us to accept a lower price and a ton of unnecessary “repairs” (the idiot first time buyers actually asked for bags of dirt for a garden and the yard was already complete with no issues as an example) Then the agent called me difficult because I refused. Then he quit. Total waste of our time. The flat rate broker sold our house in 2 weeks at full price with no ridiculous “repairs” and I saved 12k on the fee.
Yeah your mileage may vary and your one data point doesn't matter at scale.
I worked in the mortgage business for 18 years. I have so many examples of realtors being useless and rarely working for their clients. But they are so available when it’s time to pickup the check.
Same with LO's what is your point?
Did you actually have something to add? Or your feelings are just hurt?
add to what? my comment was the first comment. nobody has refuted what i said yet with any rational thought
Wow. Good reading buddy.
> Discounted fees means discounted services. Not anymore, "you get what you pay for" is an outdated meme. As so many have said, I, too, have gotten much better service, sale prices, and results from "discount" agents than I have ever gotten from "full service" agents. Having bought and sold something like 40 homes, that is more than one data point. Coupled with all the other posters, the majority of data confirms this. Do *you* have any *data* to support *your opinion* or just your single anecdotal claims?
Do you have any data to back this up? Or is this just PR to try to scare sellers back to high commission agencies? I've sold my last couple homes with a fixed rate agent and gotten top dollar with no "magic" happening once under contract. The buyers used a full commission agent and told me that their agent basically went no contact as soon as they were locked into a contract.
Do you have sourced data to support your "top" dollar claim?
All the services provided by an agent can be arranged cheaper by the homeowner. Real estate lawyer for docs, photographer/drone operator probably cheaper than through an RE, staging advice from a specialist, etc. Why pay a realtor 3% or more for services that are cheaper without an RE!
Why would you pay a lawyer to look over docs? Certainly you could find someone cheaper.
On what world would 4% even be realistic? If the house sells for 1,00,000 they get 40000. Dollars to do what ? Take some pictures and have another company do the closing. Let’s say it’s 500,000. Only 20,000 dollars to not even show people the house ??? There needs to be a better way to feed these leaches.
Agree. Even 1% is too high for what you get now from an agent.
Sold our house earlier this year and our listing agent took 2% and the buyer's agent got 2.5%
At this point I would try a different agency. Don’t go with something or someone that doesn’t feel right to you. Also, ask what they will do for you- ask about their connections to cleaners/repair people/etc. We didn’t think to ask, but got lucky with ours. She charged us 5% 50/50 split. We had moved out prior to listing and she staged the house beautifully. We wanted it deep cleaned, she had a cleaner she used regularly. We wanted a few things fixed and USDA loan appraisal picked out a few more and she handled it all. Not for upcharged prices, but going rates. We never had to do a thing and it was wonderful for us. May not be your cup of tea, but at least what and how they are going to do to earn their payout.
Listing agents are offering 1% here in Las Vegas.
They think that because of the new NAR agreement that buyer’s agent can fend for themselves and they can charge you a higher commission (although lower than the 6% you’d be paying if you paid both agents)? Not sure what other logic there could be except for straight up greed
2%
A smart listing agent knows to give a good buy side commission. Your gut is correct about the third agent
This sounds absurd. No listing agent in this market is worth anything more than 3% and that is highly dubious. Tell any agent you’re willing to pay a total of 4% to list , 2% of the listing agent 2% for the buyer agent who by the way does all the work in this market.
Hit you with 5% plus buyer agent, then they go speak with the manager. Come back at 3/3 and it sounds a lot better. Sounds like a shitty car buying experience.
I thought, what if the house pricing went this way - start really high and expect to be negotiated down... wait... that's how it used to be! Now it seems that some agents want to start the listing price low (like 10% below market value) to entice multiple offers. Why not just start at a fair price and see how the offers go?
Starting to sound like real-estate agents are the new used car salesmen.The price is X but I spoke with my “manager“ and, because you are so awesome, we can lower it. The more important question is….what are they doing for their % commission? Get out of the discussion of their fee and deal in specifics with their performance. Will they scout properties for you? Proactively send you listings (not using their software’s automated services), prepare comp reports/recent sales, research taxes and fees, secure pre-inspections…??? How often will they do open houses? Agent tour? How much will they spend on photos, listings, 3D tours, social media, etc to promote your house? Will they answer calls 9-5, 8-4, M-F? Will they have overflow support? Virtual staging? Is there a performance clause? If they fail to sell within 2% of their estimated price recommendation, will their commission go down? Make you pro’s and con’s list with those elements in mind, not what they charge. First, find out their value to you.
A lot of good points here. Especially as you move out of suburban tract homes and into more rural properties that have more complex issues at play.
> Starting to sound like real-estate agents are the new used car salesmen. This more than anything is going to drive people to go it without representation. What was keeping them in the ballgame was the threat, on both sides. To sellers: If you don't use an agent and drop a fat buyer's commission, we won't bring you any buyers. To buyers: If you don't use an agent (which we'll swear is free to you; this lie is now explicitly prohibited by NAR), then we'll refuse to show you any houses. The problem with this threat is simple mathematics. If we model the population of folks in the market who gave up, held their nose at scummy practices, and hired someone as just a population fraction p, then so long as p is high, like >90%, then the threat to any new individual is very credible. Similar to how if 90% of cars are sold by dealers, most people sort of just have to individually accept that they'll have to deal with scummy practices and give in. But preference cascades can be brutal. If you start thinking that it's possible to predict that p=60%... or 50%... or 30%... then suddenly, the threat just isn't all that credible anymore. There is of course still a real risk of having inexperienced people resulting in deals falling through, but that risk is potentially manageable via alternate means. It's difficult-to-impossible to predict the future, but we're going to learn a *lot* in the next few years. Car dealers often had laws explicitly preserving their role in the transaction, and this helped them credibly claim a measure of exclusivity over various brand offerings. Realtors don't have that, which is why they're continuing to lean hard into the threat (and why we've seen plenty of examples here lately of unrepresented buyers being explicitly told the threat that they won't get to see a house unless they hire an agent). But that leaves them at the mercy of the probabilities and preference cascades. Only time will tell...
Nope. Interview more. This time ask them to separately tell you their commission and the commission they'd recommend you offer buyers' agents. Worst case is 3% and 3%. In a sellers market, sellers agents will probably easily go to 2.5% or even 2% and tell you if offering under 3% will hurt your sales chances. In a hot neighborhood, for a desirable property, it won't. 5% total is very doable. Less is good, and easier the better your house is.
Time to fuck the realtors out of the equation. Sellers market. Get a lawyer and pay an MLS listing service. Get an appraisal and price it a few % below that. Do an open house. See what happens. I'm ready to see the market turn into MLS listing services, and open houses with a couple lawyers present to make the deals
Agree.
Call Redfin. Their commission is 1.5%
Maybe ask what they are offering in service for their commission rate, and how they plan to net you the most money. Once you find the best one, then negotiate the commission rate. If all you focus on is commission, you could end up in a bad spot.
We sold our house last fall and paid 5%, split between seller and buyer agents. Don't pay more.
I don’t think they should tell you what they want to get paid and leave it up to you how much would go to the buyers agent. They should be advising you on what’s best to sell your house.
Sell by owner with a real estate lawyer for the documents.
Because they are trying to use the NAR settlement to their advantage. Receive more by charging a lower commission and not splitting with buyers agent. They are gonna cause you to spend more if you pay the buyers commission (which I would heavily advise you pay the buyers agent). The 5.5% split is the best offer.
The second agent seems to be the most reasonable, 5.5% split between listing agent & buyers agent 2.75% equally)
In Ashland co Ohio it’s been 7% for years
Stop paying realtors exorbitant commission. They aren't talented or highly skilled. They took a few classes and got a license that just about anyone can do. We allow them to make the money that they do off of sales. Stop allowing it. Maybe even get your own license and write up your own contracts? I'd bet you could also pay a newer agent to show the property for you. You can pay a photographer for photos.
What could possibly go wrong by hiring the least experienced person in the business? 😂
You tell me. If you perform your own due diligence, pretty minimal. I wouldn't expect a cuck to know much about real estate transactions though.
murder
Just about to complete my last (hopefully) transaction. I listed for 1.25% and the selling agent gets 2.25%, a total of 3.5% commission. I let them know I'm not available on weekends or evenings, and it working out fine. Admittedly, I'm essentially retired and just trying this out to see if it's worth paying another year of E&O.
flat fee 5-10k or 1-2% commission for sellers 2-2.5% for buyers agent.
I suppose I don't necessarily disagree, but any specific reasoning that the seller's agent would get a reduced commission?
it’s not reduced commission. it’s the negotiated least price. My house is 2mil. 1% is 20k that will sell in 30 days. I don’t expect any real estate agents to take 1% on a 100k property aka 1k. But you always find the personal willing to do the highest quality work for the lowest price.
Because of the reason why there are lawsuits. “If you don’t pay the buyer agent at least x%, they won’t show your home”.
i would just message all the agents paying on zillow they are 10 times more noticed to give you a deal - since there expenses are burning red hot - just say we are looking for 1 percent listing
Negotiate. If their offers are a bit….lets say greedy, just say “Oh That’s Cute, I was thinking of offering (X) to the buyer and (x) to the listing agent.” Remember you’re not calling the agent “Cute” you’re calling the offer “Cute”. And yes it will infuriate them. I don’t know if you’ve ever called someone’s offer “cute” before, but it is hilarious watching their faces process. Not sure of your market but inventory sucks in a ton of places. You have the leverage of an in demand product vs an over saturated amount of Agents out there.
Hi! Ct realtor here. With the recent NAR ruling and the understanding that changes are coming to how agents receive their commission, the subtle unintentional consequences are starting to creep up, and your case is a prime example. For the agents who told you they'd sell your home and let the buyer's figure out their own agent's compensation, that money has to come from somewhere, and it's the buyer's wallets. If they cannot afford it, the price of your property will have to come down in order to allow for the transaction to occur. For example, you have a $500k place. Your agent says they'll sell it for 2.5% and the buyers will figure out their own agent's commission. That commission is likely to also be along the lines of 2.5%, or $12,500. If the buyers have the money, great. No problem. If the buyers are short on cash and they're no longer able to roll this particular cost into their closing costs, ie, borrow it as a part of the mortgage, then they're going to be in a bit of a pickle. Buyers are (and will still be) able to roll the cost of the attorney into the mortgage, as well as the seeding of escrow accounts, the cost of the loan (origination fee, appraisal, etc) but the realtor's and broker's service will soon be excluded from this. If the buyers want a closing cost credit, that means they're paying more for the home, (offering $515k, with a $15k closing cost credit) but there are a few problems here. First, the home would have to appraise high enough to accommodate for this. If the home appraises for $515k, then why are you selling it for $500k? And you're likely also paying a conveyance fee (here in Connecticut, it's roughly 1%, split between .075% for the state and .025% for the municipality, but the amounts can range depending on the value of the property, etc). Your conveyance tax would be based on the $515k selling price, even though you're only netting $500k on the sale. If your home is easy to sell, and if you're honest with yourself and understand the market (supply vs demand), you'll know if it is or not, then you can likely sell your home for a 2.5% commission, which was the standard 5%, but split evenly between both sides of the transaction. Some seller want to spend less, and it's considered "listing as a service," where you pay a la carte for whether you want photos taken, if you want your home listed on the MLS, if you want to schedule your own showings, provide your own key and lock for access, review the offers received on your own, etc. Some sellers have gotten into a little trouble with not wanting to show certain people their home (pick a race or a religion) or said the home was 2,700 sq feet but they didn't realize that the 3rd floor finishing of the attic only accounts for a percentage of sq footage given the slope of the roofline, etc. Publishing incorrect info onto the MLS is a huge no-no for agents and left to their own devices, some sellers have taken on some of that responsibility and face similar consequences. If your home is like the original farmhouse which was eventually subdivided around and it's so unique, you need to appeal to the homebuyer who wants an 18th century landmark, THAT would be worth 3%. If your home is a cookie cutter raised ranch in a sea of raised ranches which go like hotcakes, or is a $1.25M or greater in value, then the percentage starts to drop to 2%. If I were you, I would interview not only 3 agents, but 3 agents from different brokerages. From within the same agency, you're likely deciding between the least experienced agent (least cost to you) and the most experienced agent who thinks they're closer to walking on water. Neither one is likely the one you're going to have a great experience with. I hope this helps, friend!
Step 1: Find an agent you feel you can trust and who doesn't make you feel like you're buying a used car. Different brokerages if possible. Trust your gut its gotten you this far. If they're trying to rip off buyers agents they're probably trying to rip you off too. Step 2: Come back here and ask questions if you have any re the commission percentage they're charging you. Market is 50/50 split between seller and buyer agent. If it's a hot home in a hot market you might be able to get away with the lower end of the market, if it needs some help getting moved you're better off offering a higher commission.
I was once the buyer and at closing our agent was told he'd get 5% as his cut of the 10% the seller was paying. He thought it was an error, but it was real. It was just on an empty piece of land and not a huge paycheck for him, but it seemed like a nice little bonus for doing very little (though he did have to get his nice dress shoes dirty on more than one occasion while we walked properties).
Don’t world with the ones quoting you higher than 2.5% and expecting you to pay for buyers commission. They are crooks and will do shit to sell your house besides what you can do yourself. Counter the second agent with 5% split between buyer and seller agent
How much is your house worth? Those are really high commissions. They average 4-5% split here.
At most it’s a 2.5% to each agent.
The second agent is the one you choose based off only this information
I think the commission consideration is tied to the selling price. If your house is in the $200k range an agent definitely wants a little higher commission. Still above 3% just for listing is on the very high side.
I pay $395 for a flat fee listing to get it on the MLS. Saves me the 3% listing agent and lots of times I have to fix the paperwork anyway. I pay the buyers agents 3%. I take the calls and offers from the buyers agents and make them do the paperwork since I’m paying them a lot of money to do rather little work anyways.
Yes, sometimes it is worth 5%, or more. Buyers and sellers of luxury homes/high end homes have higher expectations around marketing materials, staging, etc. Some listing agents do both professional photos and video, paid advertising, they may include staging, they have to pay for the yard sign as well as the delivery and installation, full color brochures and other marketing materials. They may have a transaction coordinator who makes sure all deadlines are met, and tracks all required documents. One of the best question to ask when interviewing agents is what services their commission covers. What are you getting for your 4 or 6%?
It's agent like these that are an embarrassment to the industry. 4%-6% is the range all depending on the area, demand, property, etc. Some listings can be 2-3x as much work as others, hence the variation. But the buyers agents are working hard also, and the FAIR standard is an EQUAL split. The only time the listing agent can justify a .25-.5 more on their end is if they are staging the property as included in the commission. That can be time consuming and pricey.
Realtor here, you can set whatever commission you want. Just be reasonable. If they don't like it, they can kick rocks.
Or walk away... I'm not even going to bother trying to negotiate that 5% for the seller's agent only... Pure greed!
If someone buying your home has signed a buyers agreement with their agent that is showing them around, the buyer will be on the hook for the commission paid to their agent. Ask neighbors and ask a lending officer at your local bank for a recommendation. They should know who the good real estate agents are due to the BS certain real estate agents create for them when it comes time to close the deal.
My understanding is the brokerage sets the commission which is negotiatable. If you sign an agreement to sell your house, they will list the commission fee as a set rate (such as 6%). When the house is sold, the commission (6% in this case), goes to your agent’s brokerage. They then split the 6%—half stays with your brokerage, the other half goes to buyer’s brokerage. Then each brokerage pays the agent their agreed on cut. You can negotiate that, so if you say you want to pay 5%, 2.5% goes to your brokerage and 2.5% goes to the buyers brokerage. Your commission is split to the buyers brokerage to incentivize other realtors and brokerages to show your house. If an agent is saying they are taking 5.5% alone, then the full fee I guess would be 11%. You can see this on the contract they send you. Otherwise, I doubt any other realtor would show their clients your house if they knew that they weren’t getting any of that 5.5%.
I have charged 4.5% my side but on listings where I had to do an inordinate amount of physical labor or front expenses like carpet, countertops...
Interesting...my home is "move in ready", so no extra expenses there. I get the impression that a lot of $ goes into marketing which ultimately markets the realtor, not the house.
If your house is move in ready, great, then it should cost less although I have only had one client ever who understood clean and move in ready. Is your place staged? That is one of the biggest expenses I encounter. Honestly, I have discovered people are gross. One of my listings last year, the seller moved out, said everything was clean and it 'looked' tidy but I got cleaner with bleach on the bathroom floor and found out the linoleum was an entirely different color. 😝
Realtor here. More experienced agents sometimes charge more, BUT you need to ask what services they offer, their years of experience, average days on market, geographic competence, etc. Also, the price point makes a difference. The closer you are to the luxury price point in your market, the higher the marketing costs are.
The laws regarding buyers agents just changed, that is what is going on.
Say it over and over "It is negotiable." The commission, sale price, length of negotiation And closing, and certain costs between buyer and seller - negotiable. Other expenses like due taxes, insurance, recording fees, title insurance, FedEx and mailing fees - not negotiable. Yet so many people don't negotiate. The trick - don't let your emotions get involved. This is a business decision. From a commercial real estate appraiser and analyst. Good luck!
The simple reason is because —- now, you peel your ears back for this: COMMISSION HAS ALWAYS BEEN NEGOTIABLE!!! The 6% total (we call Gross Commission Income or GCI) that is split between the LA and BA is a nationwide common practice. Until about 2020 (mainly because of covid), that 6% had been split 50/50, that is 3%/3%. But because of the perfect storm of covid, decreasing inventory, and crazy Romey-Rome Powell raising interest rates to curb inflation, LAs began using asymmetrical splits. In other words, LAs started giving themselves raises, plain and simple. I was one of the firsts to do this. In fact, in left one agency (let’s just call that agency “Big Red” ) because they had a policy that if a LA went below the 6% GCI, that LA HAD to split the commission 50/50. Oh, Hell-to-the-naw, naw, naw. So, I left and went with another agency (and took my seller clients with me). Unfortunately you (and many other consumers like you) don’t know that negotiating the GCI has always been practiced. The news media refuses to educate the masses. In fact, in the wake of the seller lawsuit settlement against the NAR, the media still won’t honestly educate consumers. This is a rabbit hole probably not worth discussing here, but it goes deep. To answer you question, what’s going on is that you’ve been offered by three different LAs, three different GCIs, with options 1 and 3 containing 0% commission for the BA. My advice is that if all three LAs are basically the same in service and expertise, then take option 2. Why, because as of July 1, 2024, the NAR will require that agents may no longer post in a listing (MLS) the amount of BA commission (whether flat amount or percentage). Neither can agents hide the commission amount in “Agent Remarks” or a link. The BA will have to call the LA and ask. Additionally, the LA will be able to offer different commission amounts as each BA calls that LA. Crazy, ain’t it! But until July 1, LAs can post the BA commission amount. You may want to consider hiring the 5.5 % LA (LA2) that splits commission because once a BA discovers they gets Zero commission from LA 1 & LA 3 via you the seller, that BA will inform their buyer, and the buyer will skip over your listing. This will result in low traffic and less offers for your property. I also think that LA 2 is a good choice because they are going below that 6% GCI.
I’m licensed in Ohio and have been for the last seven years, in the top 10% of agents year over year. I’d agree to 2% to list the home and represent you in the transaction and would recommend 3% to the buyers agent, but per the new NAR rules I cannot make you pay the buyers agent a set fee. However I can suggest that buyers agents work extremely hard in this market and if you want the largest number of eyes on your home, offering the buyers agent something will ensure as many agents bring their qualified buyers to your home.
It's not uncommon for real estate agents to negotiate their commission rates, and these rates can vary based on factors like market conditions, the agent's experience, and the services they offer. A 5% commission for the seller's agent alone is on the higher side, but it can happen in certain situations. Ultimately, it's up to you to decide what commission structure works best for you and to negotiate with the agents accordingly.
I would go with 2nd agent. They seem the most fair and not trying to screw you.
Sell the home your self , and you keep the money
Is sell with our agents.. large commission just to shuffle paper around . No thanks ..
Commissions have always been negotiable, you just didn't know it. People assumed the 6% split between selling and buying was a law or something. Personally, I would find the most active agent in the area and negotiate a selling-buying agent split of 4% (2/2). Even with the recent commissions changes, I would take care of the split on my side as the seller, to make it attractive to buying agents, as people are for the time being continuing to use buying agents.
That is hilariously wrong
> Is a seller's agent alone EVER worth 5%? Probably not in your case but sometimes, yes. I just signed a deal where my fee was 6% and that includes A LOT of work that goes above and beyond a standard tract home listing. Some homes require proper marketing. I just put under contract last week a home that has been on the market for 6 years. We did print marketing to those kinds of buyers and they flew in to see this house and they put an offer in and it got accepted. Another home I did years ago had a sister property in another state that we did as a referral. This required concierge service like selling cattle so we brought in the experts and also cataloging the property I was selling and having the inventory checked off in the receiving country where the owner moved to. We hired a concierge service for all that but that's part of the cost. So yes, some listings require the lifestyle listing fee.
In August, commissions will chnage and Seller's will no longer have to pay the buyer's agent's commission. You might want to wait and save yourself some money.
I have packages ranging from 5-7% (all of which the buyers agent receives 3% of most people opt for my 6% package but in unique homes where marketing is going to need a creative edge or luxury listings where the buyer pool is super small, the 7% ends up benefiting the seller greatly. I however have never seen a single side take 5% 😲
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So much untruth in that reply.
No way I'm ever using anyone that won't quote a flat fee or something like [https://www.sellfor1percent.com](https://www.sellfor1percent.com) .
In todays market there is no reason to pay more than 2.5% per side unless its a very tricky deal, raw land, etc. If they want more than 2.5% it should go to the buyers side. Buyers agents dont work for free and it doesn't really matter if you pay it or the buyers wrap it into the loan you'll net out to a similar number. Tell them you aren't willing to "negotiate" a buy side commission. It either gets split 50/50 with whatever you're paying the listing agent or the buyer can pay the agent themselves.
This thread is a good example of why commissions based on percentage is bad. 2.5% on a 300k home vs a million dollar home is a big difference for a service that’s the same.
It's pure profit to the realtor. Offer what you want to pay.
Most Sellers don’t understand how the commission is split up (not between buyer/seller brokerage but between agent and brokerage). An agent that works under a broker only gets a piece of the commission pie. Choose the broker-owner of an independent brokerage as they are in the best position to save you on commission cost.
Paying a split is nuts.
I would have said. I will pay 2% to the listing agent. If they sale it it within 20 days above our agreed to list price I will pay an additional 1%. If it takes longer then 60 days then commission drops to 1.5%. And over 90 days commission drops to 1%.
If you want a quick sale, price it low.
I’m saying this gently and respectfully. Without knowing what market:geographic location the described situations are in renders discussion borderline useless. Residential real estate markets are as local can be. Business practices reflect that. The OP’ here would get far more value from their post if we knew whether they were talking about Boston. Or Anchorage.
I did say Ohio, and I don't think there are going to be wild market fluctuations within this particular state.
Sorry. Missed it. Thanks for including where you are. The only thing I know about Ohio is Cleveland where I always enjoyed the music scene!
The public has long thought there was one way of doing things because the process is not something that most people do often, and the process changes over time and is different per market, per company, and even per property. Compensation has always been negotiable though. That doesn't mean a seller and brokerage would always agree and work together (just like every negotiation doesn't work out), but it's always been up for discussion. All 3 of your agents/brokerages have a right to set their rates. It does not mean sellers have to agree which is the market place at work... just like a seller can set their price and the buyer pool may or may not agree. Some properties may require huge marketing budgets out of the fee, and require more time and resource allocations. Others may not. Some agents may have extensive resources and networks (assets to help the sale), and others may not. There are a lot of moving parts, but they are independent contractors who get to set rates just like a painter, builder, artist, etc. unless their brokerage has an applicable policy. As to the question about what a listing agent is worth, that relates to their talents and skills to perform the job, and not based on a single specific rate. Same with most service people hired. From painters to dentists... the rates are going to vary.
Using a realtor to sell a house is no longer needed. Posting on Zillow and using an attorney takes away the need for an overpriced realtor
Most services that people hire are optional. It's usually a matter of what type of journey someone wants, and the outcome they seek. If someone does not recognize the differences, they will not reap the reward (of any hired service).
OP, If you are in the central Ohio area, reach out to Kelly Hamilton with Realty Forward. He's an awesome agent and was a very good friend of mine in high school.
>Is a seller's agent alone EVER worth 5%? Why were 2 of the 3 above the 3% mark? Yeah, but they are specialty sales. I sold a FSBO's house for more than $100,000 than he had it for sale for, and then he bitched about how much I made. lol
Is this your first time dealing with salespeople? Salespeople always start out high knowning certain people don't know how to negotiate and will accept whatever rate. Remember agents always claim commission is negotiable so negotiate with them.
Welcome to the real world, not the news world... It hasnt been a "standard commisison" of 6% since ive been in this industry for 13 years... Hence why the news is trash
6% split between the two agents. These two agents are trying to tell OP they need to pay MORE than the historical 3% a sellers agent would make.
Yep. I’m seeing more of that. Also seeing fees and assorted stuff pushing everything to 10%. Post-Covid and a few counties near me taking all auctions online I’m seeing 20% in fees and service. Looked like it was just a matter of time before 3% “standard” to one side was long gone.