Should realtors still set the prices for their services in the form of a set percentage of the sales price?

Question

Why do you think many of them are? Do you think that negotiating a flat fee or lower commission helps or hurts the sense of trust that must be established between the seller and the agent?

I have a home that I am considering listing. It will have a very large asking price and I want to do what is best all around. Thank you all for your imput.

Answer 1

Wow, several bad answers here...

- No such thing as a "standard" commission.
- Not all commission splits are 1/4, 1/4, 1/4, 1/4.
- Realtors don't set the commission - they are negotiable.
- If a realtor is ready to walk away without the deal because you won't pay a decent commission, THAT'S A GOOD THING! A good realtor knows what it will cost for them to market and sell your home. You should not expect them to work for free!

Realtors take all of the risk - putting out large amounts of cash up front for signs, lockboxes, marketing, open houses, staging, home warranties, etc. And if your home doesn't sell - it is the realtor who looses money.

Some discount brokerages like those mentioned in one of the other answers just put it in the MLS and do very little marketing. You need to remember that the listing agent pays ALL of the costs of marketing you home and takes all of the risk. If you limit them to a very low percentage for their share, it is less likely that they will be able to do a good job of marketing.

You said you have a high end home and that changes the entire picture. In my area, many higher end homes take more than a year to sell. They need special advertising to attract the right buyer. These aren't the kind of homes you advertise in the local newspaper. There are special higher end magazines that have full color spreads of homes for sale. Visit or consult with several realtors and ask to see examples of the marketing sources they will use. Make sure they aren't just the normal ones you find in the lobby of your local Wal-Mart. They need to be more exclusive and have a very different distribution area. Some of them are distributed world-wide.

Higher end pre-existing homes compete with new construction homes so you've got to convince a buyer that a used home is better than a new one. This can be difficult unless you propery has been updated recently.

Make sure you get a list of all of the things that the listing agent will do to market you home. The commission should be in line with the marketing efforts. I always provide potential sellers with a marketing plan that lays out exactly what I will do to market the home.

If you are asking $1.5 million for your home and negotiate a 6% deal, that would be a $90,000 commission. If you want to pay less commission, consider paying part of the commission by a flat fee and part by a percentage.

You basically get what you pay for. Some realtors will not take the listing if you try to go too low. Others will "buy" the listing and take whatever you offer. Be careful who you choose. You want someone who has an excellent track record in your price range - and that won't come cheap!

Also, high end home buyers are picky! Be prepared and patient. Remember, staging is EXTREMELY IMPORTANT. So start packing up your knick-knacks and decluttering your home now.

Good luck!

Answer 2

Realtor fees are negotiable in all cases. If a person that performs a certain function tell you they can not work below a certain percentage then pass on them. All they want is the highest percentage they can get for something someone else might be willing to do for less.

I have seen a lot of Realtors come in a do a good job for a lot less that the so call norm of 6%( But who determine what is normal and normal for whom?) In California if you own a house, the value is right around $500,000 with a 6% commission that is $30,000 for selling your home and not going into your pocket. That is more than some people make in a year.

You are trying to sell your house to get the maximum equity out to put into your pocket not some real estate agency. They did not at any time pay any of the mortgage, repair any damage that might have been done over the years.

So negotiate with an agent that is willing to work and work out a commission that both of you can live with. Some real estate agents are willing to work for less and will do a tremendous job. I hope that you are able to find one.

I hope this has been of some use to you, good luck.

"FIGHT ON"

Answer 3

First off there is no 'set' rate for a Realtors service. This would violate the Sherman Anti-Trust act and is illegal. Commission is negotiated between the seller and their agent. If your agent is looking for 3% (6% total) then ask them to explain in detail exactly what they will be doing for their 3%. This should include more than a sign and a MLS listing. This should include ads in the paper, fliers, full color ads in the local real estate mags etc...

For instance I have a property listed right now. Due to market conditions I do not have the luxury of paying 6% butonly 5% total. The deal I have set up is 1.75% to the listing agent and 3.25% to the buyers agent. This extra .25% hopefully will get the property shown more than the other listings at 2.5% -3%. Also instead of offering my agent 3-4% if he brings the buyer he then gets the entire 5%. This would be the same idea if I offered a set dollar amount to either agent.

When deciding to utilize a service where you pay per part of the transaction you really need to decide what levl of service you are willing to pay for. Are you willing to sow the property on your own? If not then you may be paying extra for a lock box. Do you need assistance in determining if an offer is a good offer? Then your paying more for this assistance. If your really looking to sell a high priced property I would look to a full service agency. Interview several agents until you find one you are comfortable with and then negotiate the rates of pay. The agent should be able to articulate to you what they are charging and what you will receive for this service.

Bestof luck!

Kevin 949-375-2380
[e-mail]

Answer 4

Realtors, especially those on the Multi-List, have no choice about fees and commissions. The sales commission ends up getting split four ways: 1/4 to the listing agency, 1/4 to the listing agent, 1/4 to the buyer's agency, 1/4 to the buyer's agent. Try to pay anything less than 7% as the sales commission and you are not going to get anyone to work for you.

Answer 5

Competition in the market is causing many agencies to charge less than the standard 6 or 7%. With the rising cost of homes in the past ten years, many people feel it is unfair to be charged $20,000 or more to market a home if the market is good. A realtor can charge less and still offer the standard 3% to the selling broker and agent. It would only be the listing agent's percentage that was less.

Answer 6

As with everything, you get what you pay for. If you want cheap service, not having your questions answered, the agent doing a half *** job instead of bringing the best possible offers and best potential buyers, then try to negotiate a deal. Go ahead, just try it. Let us know how all that turns out.