Agent's Commission: What is a decent percentage?

[trust_id_09]

What is the name of your state (only U.S. law)? NEW YORK

I am selling a house and I am not sure whether or not commissions are set by statute. I was quoted 6% of the sale price isn't that way too high?
The agent is from Fillmore; a supposed reputable real estate company and the agent is experienced. I can not verify his/her reputation. First time seller.

Any help will be greatly appreciated.


Regards,

 

[rowz]

All commision rates are negotiable.

It does not hurt to ask.

When Real estate was hot many would cut a commission rate to get a listing.

Don't forget: that 6% looks like a lot. till you realize that in many cases that is split 4 ways when there is another agency bringing a buyer. Hence an 20,000.00 commish can end up being 5,000 for each "side" to the sale.

 

[DAD10]

Commission percentiles ...

Typically across the nation under/just at a million is 6% higher end properties
(millionS) 4%. These are basic percentages and typically are not negotiable.

 

[tranquility]

I completely agree with rowz. Yet, agents are hungry. Unless you need a quick sale, I think it's insane to pay 6%. That is the tradition.

In this economy, lot's of traditions change.

 

[nextwife]

In my market, there are ZILLIONS of competing properties that the brokers can choose to show a client. If I were a seller, I'd want MY home to be one they'd select to show.

 

[rowz]

uh, Dad?

What you mean is that commish is SET at 6%?

I think not and several courts have taught the NAR that such practise is price fixing which said courts frown upon.

Many independent companies do not set their prices in concert.

Hence, all commissions are negotiable.

 

[tranquility]

nextwife has a point, how hard do you want the agent to try?

Will they try harder with a 3% payoff, or a 2%?

Yet, having seen the tax returns of many, many agents; everyone has a car payment and a mortgage. The old days are gone and everyone is willing to deal.

(2% is way better than nothing.)

 

[nextwife]

Well, I help manage a large portfolio of default properties, and we believe in paying our brokers full market rate, and sometimes adding a bonus on top of that, to create an incentive for co-brokes to show OUR properties rather than the competitors. ESPECIALLY with so much inventory out there.

 

[tranquility]

It's well worth paying more if you get the sale. CA has a lot of "inventory" too. And, a lot of Realtors who aren't making any money. The market is changing with the internet and the court cases regarding MLS. Discount brokers abound.

Like anything else, it's worth it to pay more to get a good agent. A person who knows the industry can get a good agent. Others are asked to interview three and hear what they say. Even then, getting a good one is not guaranteed. While some won't deal in the hope of keeping up the 6% tradition, because of the modern age and this economy, there is downward pressure. An institution who needs a certain sized person in a file and forget environment is different from a single person with their unique property.

 

[trust_id_09]

% commission

Thank you all for your input they are much appreciated.

Now I can negotiate a bit better. The Agent yelled out 5% quickly, but I haven't come up w/ a number yet. Perhaps I should come in @ 4 or 41/2 % to keep the agent motivated.

Again Thanks A Million!

 

[CLJM]

Trust_id_09

I am speaking from my personal experience as a previous Realtor in South Carolina, Virginia, and Pennsylvania. My "commission" was based on what was customary for the particular area; in S Corolina it was 7% (split 3.5 and 3.5), while in Pennsylvania, it was 6% (split 3 and 3) Let's use South Carolina as an example. Customary was 7% (3.5 to selling broker, and 3.5 to buyers broker) At times, I certainly gave a discount to my sellers----BUT----that meant to ME, that if I chose to give a discount, I took the lessor, not split it evenly with the buyer's broker.
Lets say....I gave a discount from 7 % to 6 %. I would still give the customary commission of 3.5% to the selling broker, and I would take the "hit" and only receive 2.5%. Reason being...if I gave a discount, then my sellers should not be penalized by receiving less lookers from a buying broker because of the lessor commission offering. ( If a broker has 10 houses to show, unfortunately, the broker may choose to show only the "full" commision listings instead of serving the clients best interests. Many brokers do this, and many sellers think they are getting a break, but they are not. I most always had no problem with giving a discount because I would make it back from referrals. Also, note worthy----many brokerages would not allow their Realtors to give discounts --- however, I was a REMAX Realtor, therefore, I could set my own rates.
My worthy advice to you would be----interview several fulltime REALTORS, not agents, REALTORS, and if you negotiate a lower commission price, make sure the CORRECT SPLIT is shown on your listing agreement, and it is YOUR Realtor who is taking the discount. As people have said, Realtors are "hungry".... but, low balling a commission rarely keeps a Realtor, even a good one, motivated. The motivation rather comes from an aesthically appealing home in a good location, a fair commission, and a listing price that is marketable.
I hope this helps---and, good luck to you.