What Is A Standard Realtor Commission On A Home Sale...?

Site Notices

[ARCHIVED THREAD] - What Is A Standard Realtor Commission On A Home Sale...?

Posted: 4/8/2006 8:49:07 AM EDT

6% seems kinda high.

When I sell my house the agent is gonna make damn near what I made all year long on this one sale.

Is that really the norm or am I getting hosed?

Posted: 4/8/2006 8:51:38 AM EDT

[#1]

Yep, that's normal. 3% per side.

Posted: 4/8/2006 8:54:06 AM EDT

[#2]

Depends upon price of house. Negotiate, don't take their word for it being 6% standard. Lots go for 4.5%-5% per studies. Realtors are a rip off anyway.

Posted: 4/8/2006 8:58:13 AM EDT

[#3]

6% is the norm, but it is negotiable.

When I sold my rentals we got them down to 5%.

saved me $2500 or so right there.

Posted: 4/8/2006 8:59:02 AM EDT

[#4]

Geeze and people think 10% on a $1,000 rifle is a ripoff.

Even with the split if you sell 2 houses a year you are making more than most people.

Posted: 4/8/2006 9:03:16 AM EDT

[#5]

6% is standard, some are cheeper. A good realtor might be worth the commission - I think mine was money well spent, a bad one will cost you more than 6% - it cost the poor family I bought my new house from somewhat more than 6% in time on market and asking price cuts.

My realitor had about 15 years experiance, had a degree in Phycology, and had been a professional photographer. He did not just take pictures of my house - he did a photo shoot of it. OMG the mls listing hardly looked like the house I lived in (abet I did a lot of work too to get it there). While I did not get any sight unseen offers - I did have people waiting at the curb when he put the lock box on - and all but one gave me above asking offers. As for asking price - I was 10% higher per sq foot than anyone had managed to ever pull in my neighboorhood - and 15% higher than the identical floor plan 2 blocks away (which sat on the market for months).

Posted: 4/8/2006 9:09:32 AM EDT

[#6]

It depends on what kind of market you're in. 6 is the norm. If you have alot of product that you're competing against and if the market is a little soft, offer 6 with some sort of selling bonus.

If you're in a hot market where prices go up from asking price, it's not that big of a deal.

Posted: 4/8/2006 9:10:43 AM EDT

[#7]

87%

Posted: 4/8/2006 9:12:58 AM EDT

[#8]

1 to 3 % if you shop around. If you are in a hot market, your house will sell itself, so why do you need a realtor for anything other than liability and paperwork? 6% is a fricking ripoff with today's home prices. Your realtor doesn't need $300 suits, and an Escalade to do your paperwork.

Posted: 4/8/2006 9:13:48 AM EDT

[#9]

Most realtors now basically rely on the MLS listing to sell a house. When we sold our last house, our realty company got $21,000(@ 6%) from us for basically just using the MLS. Nice scam if you ask me. Not one single time did our realtor bring in one person to look at the house, it was all outside realtors. But then again, I dont think I would ever want to go through the hassle of trying to sell a house myself. You're damned if you do, damned if you don't.

Posted: 4/8/2006 9:19:03 AM EDT

[#10]

My sister is a Realtor . A good one is worth every penny you pay them . She has had clients that looked at houses for a year or more without buying , yet she was expected to spend her Saturdays
driving them all over town . She has had clients from out of town that bought a home and when they got here , she had taken care of having all of the utilities turned on , the house cleaned , and any needed repairs were done . If you need a good landscape guy or HVAC repair guy etc. , they know who to call . They can do more than just " sell " your home .

Posted: 4/8/2006 9:24:15 AM EDT

[#11]

Quoted:
1 to 3 % if you shop around. If you are in a hot market, your house will sell itself, so why do you need a realtor for anything other than liability and paperwork? 6% is a fricking ripoff with today's home prices. Your realtor doesn't need $300 suits, and an Escalade to do your paperwork.

If I recall correctly, the average joe can post on the multi listing forpeanuts.

Posted: 4/8/2006 9:25:38 AM EDT

[#12]

I've seen 2% realtors here in the Clearwater area. Still, at that rate they are going to make some serious money.

Posted: 4/8/2006 9:36:29 AM EDT

[#13]

Sell it yourself. The title companies have contracts you can fill out. If you're not comfortable handling the contract yourself, hire a real estate attorney. You'll still be way ahead.

You will probably find that if you list your house as a FSBO (for sale by owner) you will receive many solicitations from real estate agents to sell it for you. That is a good opportunity to negotiate. On one house that I was selling a real estate agent approached me and said that she though she had a buyer. We negotiated a 2% fee.

I've sold 4 houses myself. It's not hard.

Posted: 4/8/2006 1:13:12 PM EDT

[#14]

I was a Fl broker for 15 years so let me add to the fire:

1. Commission is important! The listing agent (your agent) usually only gets 25% of the amount in the contract, so on a $100,000 house at 6% he or she gets maybe 3% or $3,000, or 1.5% or $1,500. A good agent is worth a lot of bucks to you. He has to advertise (if he only uses MLS you are getting screwed) he has to do open houses, get other agents to tour your home on previews and so on. Talk them down enough in dollars and I bet they will list it and do nothing else. If you won't pay the rate to sell your home why should the agent pay to advertise it?

2. 80% of all homes are sold by 20% of all agents. Think about that.

3. More important than commission is the length of the listing agreement. I always did a 3 month agreement with no cancellation cost. In other words if you the seller were not happy you could fire me ASAP- that made me work doubly hard for the sale. A lot of agents want a six month agreement with a $500 or more cancellation fee. Sign that form and you are stuck with your agent for half a year.

When I sell a house I offer 7%. That way my house gets more agents interested in it than any other similar house, especially if the seller negotiated the commission down to 4%- I will be paying almost double! Think about your job, will you work harder for a good pay or for minimum wage.

You get what you pay for, if you do your homework. Always interview 3 agents. Do not be afraid of a newbee, they often have time and work harder than the pro who may rely on the 3 P's- Put up a sign, Put it in MLS and Pray.

A final thought- only look at the bottom line, or what you will take away from the closing table after all costs have been paid. That is the important figure, not the commission. IMO sellers get way too hung up on commission and not the sellers proceeds.

Posted: 4/8/2006 1:19:19 PM EDT

[#15]

About average. Here in Louisville most are 6-8% on the commission, which in my opinion is about 2-3% too much.

Posted: 4/8/2006 1:20:14 PM EDT

[#16]

If you use a realtor be prepared and buy yourself a lot of this:

Realtors are legalized crooks. All of them.

I would sell it myself. If I can do it, anybody can.

Posted: 4/8/2006 1:20:29 PM EDT

[#17]

www.fsbo.com/

F'em.

Posted: 4/8/2006 1:25:41 PM EDT

[#18]

Quoted:
If you use a realtor be prepared and buy yourself a lot of this:

i2.tinypic.com/t9gizc.jpg

Realtors are legalized crooks. All of them.

I would sell it myself. If I can do it, anybody can.

I see what your are saying and if you can sell it yourself go for it! To me agents are like attorneys, most of the time I give myself legal advice and it works OK, but in some situations I would certainly want an attorney representing me. If you sell it yourself and do a good job that is the ideal situation, but it does not always work out that way.

Posted: 4/8/2006 1:43:09 PM EDT

[#19]

Realtors are a government-endorsed monopoly, like Major League Baseball. They suck. My wife's cousin was our realtor and you would think we would have gotten a break, or at least some good advice, from her. Nope! The home inspector she forced on us was a joke, missed major items. Turns out Realtors want the home inspection to be a joke. Nothing must stop the sale.

A friend of mine was an economist at the Natl Association of Realtors. When he quit I went to his going away party and asked everyone who would answer me there if they would sell a house themselves or use a realtor. Every single one said "try to sell it myself first". That should tell you something.

GunLvr

Posted: 4/8/2006 1:48:30 PM EDT

[#20]

Here's the story on agents. They did a study on a large sample of homes sold in the Chicago area. Homes that realtors owned and sold for themself sold for about 3% more than those they sold for others (all other things being equal). That 3% would mean alot to the owner ($9K more on a $300,000 home) but little to an agent who would be getting a small percentage of the 3%. If he was the lister and got the 3% commission or part of it he might net $270 more in commission, hardly enough for him to argue for you to hold out for the extra dough.

Posted: 4/8/2006 1:49:46 PM EDT

[#21]

My current realtor went for 5%. We are currently selling our house if anyone wants to buy one in bradenton FL.

Posted: 4/8/2006 1:49:47 PM EDT

[#22]

My wife charges $1k up front. If you sell on your own its like $200 more in fees to cover the paperwork. She handles the advertising. If it sells by another realtor sale then the fee is 4%. If you want full service, that is, she does all the showings and open houses instead of you, its 6%. She will not even talk to you without money up front. She listed 88 houses last year and sold 50 of those. About 15 fell off without sale and the remainder are still listed. About half of those sold went without a second realtor involved.

On the buyer side, no pre approval letter, no ride. I have seen her in the early days drive buyers around for days while they kicked tires and were not even qualified to buy. At this stage she will not talk to anyone buying a house less than $300k and can afford it. The only exception would be someone who came well recommended and she was sure they were going to buy. She generally puts in 12 to 18 hour days. She earns every penny she gets.

FWIW I'm a headhunter in my full time job. I charge 1/3 of first years expected earnings. I don't understand the concept of discount and my clients keep coming back because I find them people who make them alot of money. I had one hiring manager remark on thursday that he does use another headhunter sometimes. I have filled 8 positions for him in the last 12 months. The other guy has filled one. He commented that he calls the other guy to fill the room with candidates, he calls me to fill the jobs. The reason, and it applies to real estate too, is that I don't show him what he is not interested in.

Posted: 4/8/2006 1:57:13 PM EDT

[#23]

Around here if they sell it own their own it's 6%, if there are two realtors involved or they have a company to split it with 3%, both 1.5%.

Posted: 4/8/2006 2:45:08 PM EDT

[#24]

Quoted:
I was a Fl broker for 15 years so let me add to the fire:

1. Commission is important! The listing agent (your agent) usually only gets 25% of the amount in the contract, so on a $100,000 house at 6% he or she gets maybe 3% or $3,000, or 1.5% or $1,500. A good agent is worth a lot of bucks to you. He has to advertise (if he only uses MLS you are getting screwed) he has to do open houses, get other agents to tour your home on previews and so on. Talk them down enough in dollars and I bet they will list it and do nothing else. If you won't pay the rate to sell your home why should the agent pay to advertise it?

2. 80% of all homes are sold by 20% of all agents. Think about that.

3. More important than commission is the length of the listing agreement. I always did a 3 month agreement with no cancellation cost. In other words if you the seller were not happy you could fire me ASAP- that made me work doubly hard for the sale. A lot of agents want a six month agreement with a $500 or more cancellation fee. Sign that form and you are stuck with your agent for half a year.

When I sell a house I offer 7%. That way my house gets more agents interested in it than any other similar house, especially if the seller negotiated the commission down to 4%- I will be paying almost double! Think about your job, will you work harder for a good pay or for minimum wage.

You get what you pay for, if you do your homework. Always interview 3 agents. Do not be afraid of a newbee, they often have time and work harder than the pro who may rely on the 3 P's- Put up a sign, Put it in MLS and Pray.

A final thought- only look at the bottom line, or what you will take away from the closing table after all costs have been paid. That is the important figure, not the commission. IMO sellers get way too hung up on commission and not the sellers proceeds.

Again, at 6% my agent will get about what I made all year long. Something in the neighborhood of $20,000.00 on this sale alone. I think it is a bit much.

Posted: 4/8/2006 2:55:06 PM EDT

[#25]

Sell it yurself and have an attorney do the paperwork. Costs about $1500.00 that way.

Posted: 4/8/2006 3:00:28 PM EDT

[#26]

Quoted:

My sister is a Realtor . A good one is worth every penny you pay them . She has had clients that looked at houses for a year or more without buying , yet she was expected to spend her Saturdays
driving them all over town . She has had clients from out of town that bought a home and when they got here , she had taken care of having all of the utilities turned on , the house cleaned , and any needed repairs were done . If you need a good landscape guy or HVAC repair guy etc. , they know who to call . They can do more than just " sell " your home .

so okay, she is the .001% that is good, the last two I dealt with sucked and it's funny the realtor assoc has a commerical on TV talking about them having high morals. BS...

Posted: 4/8/2006 3:00:36 PM EDT

[#27]

Quoted:
If you use a realtor be prepared and buy yourself a lot of this:

i2.tinypic.com/t9gizc.jpg

Realtors are legalized crooks. All of them.

I would sell it myself. If I can do it, anybody can.

That's strange, I don't recall ever MEETING you...and now I don't want to.

Posted: 4/8/2006 3:05:40 PM EDT

[#28]

I got a question similar: if one can pay cash for a home, what kind of comissions/fees should one expect to see?
~

Posted: 4/8/2006 3:12:36 PM EDT

[#29]

Quoted:
I got a question similar: if one can pay cash for a home, what kind of comissions/fees should one expect to see?
~

I don't know about IL but here a cash buyer is only going to save the money they would have spent on the loan application, origination fee, interest rate over 15/30 years, etc. Commission to agents is the same regardless of payment.

Posted: 4/8/2006 3:15:28 PM EDT

[#30]

I got 4% if my realtor sold the house to a customer she found... It was 5% otherwise. There are a shit pot of them out there (most suck) and it depends on the market.

Posted: 4/8/2006 3:42:49 PM EDT

[#31]

SA--a couple of questions.

What is the housing market like where you live? Very fast turn over or do houses sit, and sit and sit...?

Do you want to deal with the hassles (paperwork, touring the house, etc. etc.)?

Think of it like getting a case of SKS rifles at a good price. You now own the rifles--however to get them presentable for selling, you need to clean them and get the Cosmoline (or whatever the Com Bloc used---Crisco?) off. You can pay someone $10 per rifle to clean and check them, or you can do it yourself. You will still make some money if you have someone else clean them (not as much, but with fewer hassles). Your decision.

My mom sold her house and moved about 9 months ago. I had strongly advised her to tell the Realtor to sell it for $165k (10% more than the 150k the realtor thought it would bring). She decided to list it at 155k. It sold within 24 hours for $156,500...two people looked at it and the second was afraid they would lose it so they offered 1% over listing price. What the Realtor didn't mention (or know) was that there were ONLY 2 homes in the town that were going for less than $200k--and the other one was fire-damaged. My Mom could have sold it herself, pocketed most of the commission, AND the extra $8500 that I recommended. In that case, the Realtor didn't do much work to get the commission.

AFARR

Posted: 4/8/2006 3:47:29 PM EDT

[#32]

Quoted:
Sell it yurself and have an attorney do the paperwork. Costs about $1500.00 that way.

Yup, especially in South Florida.

The house will almost sell itself.

Posted: 4/8/2006 3:48:10 PM EDT

[#33]

Just an example of the fact that all agents are not great. There are good ones and bad ones.

Oh and very very bad ones. I are one and I can tell a lot of stories about very very very bad ones.

Posted: 4/8/2006 5:36:26 PM EDT

[#34]

6%

Posted: 4/8/2006 5:38:05 PM EDT

[#35]

Quoted:
6% seems kinda high.

When I sell my house the agent is gonna make damn near what I made all year long on this one sale.

Is that really the norm or am I getting hosed?

I have someone who will do it for 5% and she is good too,

Posted: 4/8/2006 5:54:56 PM EDT

[#36]

Quoted:
Just an example of the fact that all agents are not great. There are good ones and bad ones.

Oh and very very bad ones. I are one and I can tell a lot of stories about very very very bad ones.

+1 I've been a Realtor/Broker for 27 years and best as I can tell there are only about 5% actually do the job correctly......

Posted: 4/8/2006 6:00:44 PM EDT

[#37]

A home up the street from me just sold FSBO, the seller left about $35,000 to $45,000 on the table. Another home two blocks away was purchased by a former neighbor FSBO, they overpaid by about $20,000. Not having representation can cost you more than a commission ever would.

Posted: 4/8/2006 9:56:33 PM EDT

[#38]

Do you really want to give 20,000 of your hard earned money away. You deserve that equity, not some stinking real estate leech.

All you have to do is get an appropriate sign in your yard, advertise with picture in local papers, and hire a closing attorney to handle the sale once you find a buyer. No big deal. I have done this before with no experience at all.

Realtors prey on people and any fee they charge is outlandish and a fucking rip off.

ANd that bullshit about paying too much or not getting enough is why you hire your own appraiser, and if the buyer is smart and it is also required, they will hire thier own apprasial, depends on the situation. I would always hire an apprasier first.

gigmike, your neighbors must not have any common sense.

Realtors hate people with common sense. Do it yourself and become informed, don't give your money away to crooks.

Posted: 4/8/2006 10:20:12 PM EDT

[#39]

Maybe you can find a home based kitchen table realtor rather than a true profesional, to transfer ownership of your house cheaper.

Posted: 4/8/2006 11:01:43 PM EDT

[#40]

3% here in Oklahoma

Posted: 4/8/2006 11:48:40 PM EDT

[#41]

Well Aug, you were wondering what type of work to get into...

Your used to selling shit... think about realty.

Posted: 4/8/2006 11:54:29 PM EDT

[#42]

Quoted:
Maybe you can find a home based kitchen table realtor rather than a true profesional, to transfer ownership of your house cheaper.

Posted: 4/9/2006 12:03:09 AM EDT

[#43]

The buyers agent is going to get 2.8 or 3% You can possibly negotiate with your listing (sellers) agent to take less then the standard. Mine Selling agent agreed to 1.8% (he already had made an M16 on my new house purchase), So 4.6% total Everything is negotiable. The buyers agent is the one that really counts the most. For some reason, most legitimate buyers want a buyers agent. They think that the 3% is "free"

You can do it "for sale by owner" and list in the MLS for about $500, but you will still pay the buyers agent 2.8 or 3% unless you specify "no agent fee" in which case you will not get top dollar since all buyers agents will shun you. If yours is still a hot market, the MLS listing along with 3% to the sellers agent would be a very good option to explore. Google "MLS flat fee listing agent" for your area. There are also many companies that will list, plus run other adds, for a flat fee. Ask more than you think it's worth so you have negotiating room. Also, the buyers are going to hammer you after the inspection, so factor that in.
To decide on your listing price, you should use the MLS to check your "comps" (comparable properties)

Open houses and the like are overrated. Virtually all legitimate buyers search the MLS via internet.

I tried to do "fsbo" but in the end it was not worth it. Time is money (Literally)

OR- Sell it on the EE