Buyer and Seller Agent Comission?

Question

The normal comission is 3% for each, which is 6% total for buyer and seller agents. I wonder if this rule can be broken? What about 2% for each? With the slumping housing market, I think 6% is too much. What happen if I want to sell my house and offer it at 2% each. My property price is around half million

Answer 1

You can offer it, but don't be surprised if many of the services they normally offer are no longer included at that price (if they even accept it).

I don't disagree with you, in areas where the prices really took off I think the percentage should be a little less than it used to be. In middle america, the prices are low, so commissions must be low.

Average house in Iowa: $150,000 -- commission $9000
Average house in CA: $500,000 -- commission $30,000

Does it really take that much more work to sell the average house in CA than the average house in Iowa (present foreclosure situation in CA excepted).

Does the marketing plan for a higher end property really encompass so much more to be worth the difference in price?

good luck!

Answer 2

First of all, it's illegal for agents to outright quote a blanket commission figure, so yes, if they have worked with you or your family before or your place is easy to sell or if everything is in order and all they do is provide the contracts then yes they can lower the commission rate. You think 6 percent is too much? Which are you, the buyer or seller, and, with the high cost of advertising today and difficulty in selling the place it should probably be 8 percent or more...haha. I guess you haven't realized the outside costs the agent has to take on just to sell your place. You must think they are pulling a percentage figure out of the sky or something. There are a lot of costs involved which the agent has to shell out. Actually an agent has to sell many houses per month just to survive. Just try to sell the house yourself and you will see what expenses are incurred to sell it. Offer 2% for what and to whom?

Answer 3

I'm going to be brutally honest with you!!When you are in a housing slump, that is when you should offer the MOST!! Remember you are trying to SELL your house so in a market with tons of inventory(buyers market) you need to set yourself apart. Example: Your house is for sale and so are half a dozen neighbors with fairly comparable homes. You are offering a 2% per side, the guy down the street is offering a 3% per side and the real go getter down the road a little further is offering a 4% per side. Who's house do you think the real estate agents in your area are going to TRY THEIR HARDEST TO SELL??? Whether you think it is right or not, real estate agents are out there with gas around $3.00 per gallon trying to feed a family also and if they can pick up an extra $5,000 to $10,000 by pushing one house over another then I gotta tell you they will be accentuating all the positives about that house with the higher commission.

Answer 4

That rate is negotiable, it has never been a fixed rate. What I have done in the past is to call several different agents and make them compete to sell your house. Remember they work for you not the other way around and if they want to put money in there pocket they will have to give you a better offer than the last guy or girl.

Answer 5

You can negotiate it down to that. The problem is that few selling agents will show it. There are tow many houses offering them 3-4-5% commission. Why waste their time on you? Your house will not sell quickly and you will get low ball offers.

Answer 6

Because of the slump it's harder to sell your house and therefore you should be willing to pay more to get it sold. Cutting to 2% was done during the boom a few years ago when you didn't even need the help of an Agent to sell. http://www.choicerealestate.net/

Answer 7

The agent's broker most likely won't allow it.

Here is what a GOOD Realtor will tell you:

"If I am willing to knock off part of my commission up front, what do you think I'll do with the price of your house?"

You'll get what you pay for...if you want to pay substandard commission, then you can expect substandard service. Realtors are fierce about protecting their commission scale b/c they know that if ONE brokerage starts to do it, they'll all have to follow suit, and b/c there has been a market DECLINE, all of us have to squeeze out every dollar out of every sale just to stay afloat.

Answer 8

If you have a house worth £0.5m (or if you are American) then you REALLY should have discovered that 'all things in life are negotiable' by now :-)

NB. In the UK, 'normal' Estate Agents commission is between 1% and 2% and is ONLY charged to the Seller ..