Maybe I'm a dummy, but we signed papers with our realtor, agreeing to pay 7% commission ifour home sells.?

Question

I didn't think to negotiate. Is this the going rate?

Answer 1

It should be 6%, but it differs by state.
You're not a dummy, you did the right thing... If you have doubts, here's what you do. Just refuse every single offer you get, and wait til the listing expires.... hehe.. I know it's evil, but hey... you gotta do what you gotta do.
Once you get a good offer on the table, be relunctant to accept it and kinda complain to the realtor that you won't be getting much out of it... make him discount the commission to 3% or 4%. which is usually a fair amount... considering the house is less than $500,000. If it's more than that, I usually only pay like 1% for million and up... sometimes even less, like 0.50%.
I'm licensed, but I usually have other agents sell it for me.

Answer 2

6% is the going rate here. Sometimes a Realtor will give you a 1% cut off their share if you sign an agreement to buy your next house through them. If a buyer can't meet your price and the agent is eager to gain a commission they will sometimes cut their commission and give it to the buyer. Have learned to not sign more than a 3 month agreement (never go over 6mos) & have written into the contract all the services the realtor will provide - full MLS, newspaper ads, real estate magazine insertion, flyers, open houses, whatever. You can even include an opt out clause in your contract to release you with a given notice period. It is not too late to talk to your Realtor. A professional will clarify your rate and meet realistic expectations. There are a few cut throat ones out there who will just list to get the listing and then do nothing for you except knock your price to make it easier for them to sell. The contract is a binding document but can be terminated by mutual consent at any time. Any prospect the Realtor did provide cannot legally buy directly from you without your paying that commision. That was part of the contract. You can try to find other prospects on your own but having been FSBO (any assisted selling site) - No! You'll lose more on that than with a traditional Realtor. Again, just talk with your Realtor, they are your support system during this listing and their reputation is as much at stake as the listing itself. They want a satisfying conclusion for all parties involved.

Answer 3

Things aren't as bad as the answers would indicate.

They guy in California paid 3%, and I bet the house was twice as much...

Across the country, except in the statistical abnormalities (like Connecticut and California), the going rate is 7%. Some of the people that answered talked about negotiating that rate down. That's fine, but I bet they haven't sold their home in a depressed market. I'd tell any of them to put their house up on the market tomorrow, and discuss with the realtor their comission rate, and offer them 5. After the laughter and the "are you serious" comments, we'll see what happens.

Here in Michigan, where the average length of time on the market is over 3 times the length of a listing agreement, if you think a realtor is going to take anything less than 7%, there is always FSBO.

"Maybe I'm a dummy..." Yeah, maybe you are, but not about your commission rate you're not!

Answer 4

What you paid is typical full commission. It's usually split between the selling agent and the buying agent. You can occassionally get it down around 5 percent but don't feel bad about 7.

Like you thought in hindsight - almost everything is negotiable including this but you didn't get a raw deal. It's what we paid when we sold our last home through an agent.

Answer 5

Seven percent is full commission. I think it can be argued in this day of Internet and cell phones that 7 percent is too much to pay. That being said, seven is the "normal" number requested, but you are always free to negotiate down. I hope you did not sign a long term contract. If so, you might have removed the incentive for a quick sale. If it does sell fast, seven percent is not too bad. If it does not sell fast, you can always negotiate with the next guy.

Answer 6

The federal trade commission forbids setting a market price. Ideally we are prohibited from even suggesting the notion of a standard figure. The theory being, that would be price-fixing.

The figure varies from area to area. It may also differ depending on the type of property. I will not sell a $25,000 crack-shack for 5% but I would take a $250,000 listing for that in a heartbeat.

Answer 7

I have sold 4 homes in my lifetime ( USA) and have never paid more than 4% commission. The rate is negotiable.

Answer 8

That's high. Usually a broker gets 7% and they split it with the agent who actually gets the contract. Still, it's only 4% in Houston.

Answer 9

that's on the high side. And you are paying your Realtor whether or not the buyer is represented by a Realtor? Your agent is a lucky man/woman!

Answer 10

I think it depends on the state. But, it should be 3% for each the Sellers and Buyers agent.