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rodltg2
11-03-2006, 05:27 PM
anyone know what the appropiate realtor commisions are right now? back when i bought my house it was a hot market , now its so slow im hoping to negociate a better deal..

M-Funf
11-03-2006, 05:32 PM
I know that when we bought our third house through the same realtor, she said that she would love to cut us a deal, but her agency policy was 3%. So she gave us some free fixes to the house instead (window repairs, furnace maintenance, A/C system maintenance, etc.) which added up to not-so-much (but it was a nice gesture)

I did get a discounted commission on the first house I purchased through an independent realtor....

rodltg2
11-03-2006, 05:47 PM
3% each? so 6 total. way too much. im think no more than 4%

east tx skier
11-03-2006, 05:55 PM
I've heard anywhere from 3%--6%.

pram
11-03-2006, 06:27 PM
I believe here in Canada (BC anyways) that Real Estate charges you 7% on the first $100,000 then 3% after that on the selling price. Now that is a crock of you know what.

Datdude
11-03-2006, 06:28 PM
Here in Northern Wisconsin most realtors are charging between 6-7% and have heard as high as 10% on vacant land:o

Leroy
11-03-2006, 07:34 PM
That whole process is complicated enough that it is difficult to reduce it. It's that way by design unless you do a FSBO or alternative.

WakePowell
11-03-2006, 07:54 PM
I’ve bought and sold several homes. Most recently this year and the standard rate is 6% (3% Seller and 3% Buyer). The risk you run in negotiating a lesser rate is having your home marketed well by your selling realtor. More of an issue is having selling agents willing to show your home to their clients knowing that they will receive a reduced commission. The commissions are listed in the realtors multiple listing data base so they are aware of the rate they will receive. If you are in a “hot” real estate market this may not be an issue.

Andyg
11-03-2006, 07:59 PM
I will never hire a realitor to sell my house. I sold our house earlier this year on my own. It really isn't that much work. In a really bad market I had three offers written in 4 weeks and accepted the last one. The going rate for commissions was 6% ( 3%+3%). My parents sold there house this year and setup a total of 5% commission in there contract with the realitor. I don't know if they split at 2.5% + 2.5% or what though.

M-Funf
11-03-2006, 08:16 PM
FSBO can work well if you have the time and patience to do it. A co-worker of mine sold his last home himself, and said he'll never do it again...

Having a Realtor do all the paperwork, showing the home, etc. is only part of it. If you do a FSBO, you're dealing directly with the buyers. There's NO BUFFER. If there are any problems after you sell, they will come back to you...

I, personally, wouldn't do it, but I know that many have and it's worked out just find...:o

PendO
11-03-2006, 10:16 PM
In Spokane the standard is 6%

If I list my house for 300 then 18K is coming off the top 3% to the listing broker (1.5 to the selling realtor) 3% to the purchasing broker (1.5 to the realtor).

So, if I sold my house for 300 I would clear 282, and the buyer pays 300.

Also, if you buy a bare lot from a realtor the 6% is usally included (in the contract) on the value of the structure you put on it.

So, if you put a 500K house on a 100K lot you pay 6% of the 500K (30K) but the original lot price of 100K included the 6% (Seller would have netted 94K for the lot)

Stritt
11-03-2006, 11:15 PM
Sold our home in Orlando in 3 days last March, listed on MLS 3% was the total fee on 400k. Check around.

LakePirate
11-03-2006, 11:35 PM
Everything I have seen is 6%. Sold my last house in 5 days. Not a bad week of work....oh wait, they didn't do anything but put a sign in the yard and deal with the crazy lady that was the buyers agent.

6ballsisall
11-03-2006, 11:38 PM
Don't even get me started fellas.............All I am gonna say is that in years past, real estate in alot of markets WAS "easier" money than it is today.

Trust me, I work with Realtors everyday. Half of them don't make ANYWHERE NEAR what you think they do. The ones getting in the business with the above mentality that it will be easy are the exact same ones getting out a year later. They are every bit worth 6%in almost every situation.

east tx skier
11-04-2006, 01:56 AM
In Spokane the standard is 6%

If I list my house for 300 then 18K is coming off the top 3% to the listing broker (1.5 to the selling realtor) 3% to the purchasing broker (1.5 to the realtor).

So, if I sold my house for 300 I would clear 282, and the buyer pays 300.

Also, if you buy a bare lot from a realtor the 6% is usally included (in the contract) on the value of the structure you put on it.

So, if you put a 500K house on a 100K lot you pay 6% of the 500K (30K) but the original lot price of 100K included the 6% (Seller would have netted 94K for the lot)

Pendo, in Texas, licensed attorneys can represent themselves and others as a real estate agent. Lots of people I know have split the commission when they're buying a house. Can you do that in Washington?

jpattigr
11-05-2006, 01:53 PM
Rod,

On my last house sale I cut a deal on the rate but only on the listing side, 11/2 % to seller and 3% to the buyer that way other realtor's would be happy to sell the house. Also if you are looking at another house try to use one Realtor for everything and then you will get a big cut in rates if they can "double end" the deal.
It is a slimy job as they get paid more for selling me a house when they are representing me! it's backwards! They should be paid more based on a lower price to me!!

Leroy
11-05-2006, 03:00 PM
If you are buying, the "deal" today is to force the seller to pay more. Really tough to be a seller now.

Workin' 4 Toys
11-06-2006, 01:16 PM
5%..............:mad: :mad: :mad: Nuff said!!

Workin' 4 Toys
11-06-2006, 01:17 PM
If you are buying, the "deal" today is to force the seller to pay more. Really tough to be a seller now.
I'll second that. I know way too many people right now floating 2 mort. NOT by choice....:mad:

Ric
11-06-2006, 01:53 PM
I'll second that. I know way too many people right now floating 2 mort. NOT by choice....:mad: I am floating Three :eek:

Workin' 4 Toys
11-06-2006, 02:45 PM
I am floating Three :eek:
Yeah, but you got ($) it....8p

6ballsisall
11-06-2006, 02:53 PM
I believe getting reduced commissions will be less of an opportunity as this becomes more and more a buyers market. I can tell you that there is a significant decline already in the total population of licensed realtors in the US AND their is expected to be an on-going correction of this for some time. This is actually healthy for the business. In the past few years it's been so good in most areas it really didn't take much to be successful at selling real estate. Most of the peeps that really weren't dedicated to the biz and just interested in a quick buck are getting out. Why will this affect real estate commissions? Realtors typically only use reduced commissions to get a listing WHEN needed. There has been WAY to many realtors in alot of markets in the past years and the inventory of listings for sale not enough thus the competitive commission structures we all see advertised and promoted. The change in market makes it tougher for agents to live off of a few percent commission and with the lower # of realtors I am quite confident you'll see less and less low fee realtors make it. It's really pretty simple Supply and demand........

Now, all this said I want my DAMN house sold now!!!!!!!!!!!:mad:

Workin' 4 Toys
11-06-2006, 03:09 PM
Now, all this said I want my DAMN house sold now!!!!!!!!!!!:mad:
Sorry man, All I can say is Good Luck.....Should have kept the boat and offered it up as commission, it might be about equal....:rolleyes:

Bruce
11-06-2006, 08:16 PM
jrandol- you are right on the money. My son is a real estate agent an honest, prof. agent with a lot of integrity. As you mentioned the new ones are heading for the hills now that it's hard. As for sale by owner you will here lots of srories some true some not so accurate. FSBO's rarely know what their property is really worth. Sometimes they leave a lot of money on the table. I made a deal with my Dr. I would not do any haeart surgries if he would not compete in my industry. It has worked out well
YOU GET WHAT YOU PAY FOR!

PendO
11-07-2006, 01:43 AM
Pendo, in Texas, licensed attorneys can represent themselves and others as a real estate agent. Lots of people I know have split the commission when they're buying a house. Can you do that in Washington?

Doug, when my wife and I bought we did not use a agent and backed 3% out of the price ... I am not sure if I could represent buyers and get in on the 6% ... I had thought about getting my license at one point to try and save some transaction costs, but never got past the "thought about it stage" ... as I started wondering how much the malpractice insurance would cost

BrianM
11-07-2006, 10:20 AM
I have to chime in here and agree with Jeff and in the interest of full discloseure I am a real estate broker.

First of all I subscribe to the 85%-10%-5% rule of real estate brokers/agents. That is:

85% of them are nearly worthless and simply in it for a quick buck or think they can make an easy buck. Thhe fact of the matter is there is huge turn over in the real estate business. Most new agents don't make it through the first year.

10% of agents are descent people and will do a good job for you. These people are either real go getters or people that have been in the business a while. They do their job and are worth the commission you pay.

5% of agents are worth their weight in gold. These are the people that have great knowledge of all of the aspects of the business and can make your buying or selling experience enjoyable. These are the people that when the whole thing is over you feel like you owe them more than the commission you paid.

WARNING! Many of the "top producer" and people that you see billboards of really only fall into the 10% and a surprising number of them fall into the 85%. Just because you see there name everywhere DOES NOT mean that they are in the 5% so do your homework.

Interview a number of agents before you let one them list your house. It is absolutely amazing to me the number of people that call the large XYZ Real Estate company and list their house with the person that answers the phone. With these large companies most of the people answering the phone are new and 99% of them are in that 85%. Get references from friends family aetc of agents that did a good job for them.

Now a bit on commissions. Commissions are by la negotiable. That is that there is not a set commission rate in your area. Many of the lage companies however have a rate that they charge that is not negotiable or that may be negotiable only to a certain point. Usually your best 'deal' if that is what you are looking for is going to be with a smaller agency. But beware of cut rate commissions. Most of the time a cut rate commission means cut rate service. They key is finding a 5% agent working for a smaller company that is willing to negotiate a FAIR commission. Real Estate commissions are generally in the 4 -6% range. With lower dollar homes getting the higher percentage and higher dollar homes getting generally a lower rate.

Why are so many people unwilling to pay a commission on one of their largest assets? Would you trust your investment portfolio to a brand new broker that may not be around in six months? Do you sell real estate every day? In order to make a living an agent is going to sell a bare minimum of 10 houses a year. 99.9% of people won't sell 10 houses in their lifetime. Isn't that experience worth something to you? There is also a ton of liability associated with the business along with license fees, MLS fees, association fees, franchise fees etc. There is a lot of cost involved with selling homes much of which a homeowner never knows about.

Finally many times when it looks easy it really isn't. Sure every once in a while an agent will hit a home run and get a quick lucky sale. But most of the time there is a lot of legwork involved with advertising, marketing, showing, qualifying prospects etc.

6ballsisall
11-07-2006, 11:00 AM
I have to chime in here and agree with Jeff and in the interest of full discloseure I am a real estate broker.

First of all I subscribe to the 85%-10%-5% rule of real estate brokers/agents. That is:

85% of them are nearly worthless and simply in it for a quick buck or think they can make an easy buck. Thhe fact of the matter is there is huge turn over in the real estate business. Most new agents don't make it through the first year.

10% of agents are descent people and will do a good job for you. These people are either real go getters or people that have been in the business a while. They do their job and are worth the commission you pay.

5% of agents are worth their weight in gold. These are the people that have great knowledge of all of the aspects of the business and can make your buying or selling experience enjoyable. These are the people that when the whole thing is over you feel like you owe them more than the commission you paid.

WARNING! Many of the "top producer" and people that you see billboards of really only fall into the 10% and a surprising number of them fall into the 85%. Just because you see there name everywhere DOES NOT mean that they are in the 5% so do your homework.

Interview a number of agents before you let one them list your house. It is absolutely amazing to me the number of people that call the large XYZ Real Estate company and list their house with the person that answers the phone. With these large companies most of the people answering the phone are new and 99% of them are in that 85%. Get references from friends family aetc of agents that did a good job for them.

Now a bit on commissions. Commissions are by la negotiable. That is that there is not a set commission rate in your area. Many of the lage companies however have a rate that they charge that is not negotiable or that may be negotiable only to a certain point. Usually your best 'deal' if that is what you are looking for is going to be with a smaller agency. But beware of cut rate commissions. Most of the time a cut rate commission means cut rate service. They key is finding a 5% agent working for a smaller company that is willing to negotiate a FAIR commission. Real Estate commissions are generally in the 4 -6% range. With lower dollar homes getting the higher percentage and higher dollar homes getting generally a lower rate.

Why are so many people unwilling to pay a commission on one of their largest assets? Would you trust your investment portfolio to a brand new broker that may not be around in six months? Do you sell real estate every day? In order to make a living an agent is going to sell a bare minimum of 10 houses a year. 99.9% of people won't sell 10 houses in their lifetime. Isn't that experience worth something to you? There is also a ton of liability associated with the business along with license fees, MLS fees, association fees, franchise fees etc. There is a lot of cost involved with selling homes much of which a homeowner never knows about.

Finally many times when it looks easy it really isn't. Sure every once in a while an agent will hit a home run and get a quick lucky sale. But most of the time there is a lot of legwork involved with advertising, marketing, showing, qualifying prospects etc.

I can tell BrianM and I think the same and work in the same world here. ;)

To add into what Brian has said, he is absolutely right about the 85/10/5 rule. Since I am very involved in all of the inner workings of Realtors worlds (marketing) I can tell you in large the ALOT of the realtors you see advertising on everything they can AREN'T necessarily "players", heck most of them can't pay their bills! Base your agent hiring practices on facts and figures. Don't be swooped in by alot of semantics, or "I work for the big company in town" type mumble jumble. That stuff NEVER sold a house........

THe last stat I remember reading said the average realtor made just less than 30k a year. Don't be fooled into grouping all realtors as get rich quick, easy money type of people. I guarantee you MOST of the best corporate people wouldn't last a year in the real estate sales business.

Leroy
11-07-2006, 11:28 AM
I was in the 85% group for couple of years. Who know, maybe I still am! I worked part time as a young electrical engineer. Was interesting but quickly realized it was not easy money.

A really good agent is well worth the money. I've sold and bought 6 times and been happy with my agent each time.

Archimedes
11-07-2006, 11:36 AM
Sold my home in Dallas in less than 30 days using FSBO. Paid a few hundred bucks to a broker to get it listed on MLS, with a 1% commission to him if he sent the buyer my way, put up some signs, and sold it quick myself with no commission. Very easy process and got my price. Title company handled all the paperwork.

However, I was in an area where it was very easy to price my house. I would not think of doing it where I live now, given the more complex market dynamics. I think that's the area where realtors add a lot of value.

Workin' 4 Toys
11-07-2006, 12:01 PM
THe last stat I remember reading said the average realtor made just less than 30k a year. .
So with that said, and the percentages posted here, they would have to make two deals a year.....:rolleyes:

And one deal every two years if you're leroy's agent...8p :purplaugh

6ballsisall
11-07-2006, 12:07 PM
So with that said, and the percentages posted here, they would have to make two deals a year.....:rolleyes:

And one deal every two years if you're leroy's agent...8p :purplaugh

Hardly the case..........

Lets run some #'s

2 homes sales 500k each= 1,000,000 in Net sales
Most realtors don't double dip very often (get both sides of the transaction)

So if they work for a traditional company and they have a 50/50 split on NET SALES of 1million, they'd receive commissions of 15,000. (thats 1.5% or 50% of the 3% they'd get for one side of the transaction on both deals)

We haven't even factored in MLS dues, NAR dues, yard signs, transaction fees, advertising expenses, etc......

Well, you get the idea..........

BrianM
11-07-2006, 02:26 PM
Hardly the case..........

Lets run some #'s

2 homes sales 500k each= 1,000,000 in Net sales
Most realtors don't double dip very often (get both sides of the transaction)

So if they work for a traditional company and they have a 50/50 split on NET SALES of 1million, they'd receive commissions of 15,000. (thats 1.5% or 50% of the 3% they'd get for one side of the transaction on both deals)

We haven't even factored in MLS dues, NAR dues, yard signs, transaction fees, advertising expenses, etc......

Well, you get the idea..........
And you also have to remember that many of us do not live in areas where the average home price is $500k. Around here the average is about $200k. So now run those numbers again and see how many houses a year an agent needs to sell to make a small living. But don't forget taxes. All agents are independent contractors and therefore self employed which means a 15% self employment tax on top of the marginal tax rate.

Don't get me wrong good agents can make a very good living but it takes lots of work and lots of transactions to do so.

Ric
11-07-2006, 02:35 PM
I can tell BrianM and I think the same and work in the same world here. ;)

To add into what Brian has said, he is absolutely right about the 85/10/5 rule. Since I am very involved in all of the inner workings of Realtors worlds (marketing) I can tell you in large the ALOT of the realtors you see advertising on everything they can AREN'T necessarily "players", heck most of them can't pay their bills! Base your agent hiring practices on facts and figures. Don't be swooped in by alot of semantics, or "I work for the big company in town" type mumble jumble. That stuff NEVER sold a house........

THe last stat I remember reading said the average realtor made just less than 30k a year. Don't be fooled into grouping all realtors as get rich quick, easy money type of people. I guarantee you MOST of the best corporate people wouldn't last a year in the real estate sales business. You guys completely described my experiences with realtors in the last 15 years!

I just dumped one a few months back who proclaimed to be the hot shot... The woman told me in a casual chat that she just luvvved her Navigator... Then she told me it was a friggin lease... I thought, I don't need you making deals for me, lady!.

6ballsisall
11-07-2006, 03:26 PM
You guys completely described my experiences with realtors in the last 15 years!

I just dumped one a few months back who proclaimed to be the hot shot... The woman told me in a casual chat that she just luvvved her Navigator... Then she told me it was a friggin lease... I thought, I don't need you making deals for me, lady!.


She drove a Navigator???? Did she forget to read the memo that real estate agents are suppose to drive big cadillacs???? :D

Another thing to look at when hiring a realtor to sell your house is:

1. Their past experience in transactions- # of transactions in your area in the last 12 months, target price vs. selling price, THEIR average days on sale.

2. Market comparisons- LOTS of realtors want to tell you what you want to hear on what your home should sell for. Again, remember they want your listing. Make sure you feel comfortable that they are accurate with their analysis. It may sound great to hear your home is worth X but if the competition (other homes in your area) are selling for Y you sure as heck better have a way to justify your price increase.

3. Make sure they have a "plan" to sell your house. If they say, "well will put it in the MLS, runs some ads if needed, do an open house if needed, etc..." RUN AWAY. That 5% group that you want working for you will come in with a business plan to sell your property. That would consist of a concise marketing plan from start to finish. If you have a very unique home (high end, lakefront, etc...) you should expect a marketing plan geared for your type of property, if you don't get that, you have the wrong realtor.

4. How is the realtor perceived in the marketplace. I know of one realtor in my area that is a decent realtor, however, she is hard as hell to deal with. ALOT of other realtors will pull their own teeth before showing their buyers one of her listings. Thats not healthy for you if you choose that realtor.