Is 6% to much? 35 posts by 30 users

Posted: 06/22/2005 at 10:56AM

6% is not the universal sales commission, but it is a universal starting point for negotiations with a full-service listing agent. However, what's usually negotiated is the listing agents' split which depends on market conditions, location, requested services, and the date by which owner needs to sell.

The selling agent's (or buyer's agent) portion typically remains 3% because of pressures by agents not to show anything below 3%.

Posted: 07/05/2007 at 10:05PM

This is true, make sure you know what the agent plans to do to list your home. Ask them what their marketing strategy is and what they will do to impliment it. Make sure the report back to you. My clients get daily reports and one weekly summary so that they are informed as to how their home is being marketed. If you think you have a hot property in a sellers market, then yes, negotiate the split down and have them list it on the MLS and place a keybox on it and do the negotiations. If you need it marketed then plan on paying the 6%. If you don't know, then you probably need it marketed because if it stays on the MLS too long it can get " stale" and won't show is much because buyers agents think something is wrong with it.

Posted: 08/22/2007 at 10:01PM

Some people do charge more than 6% for residential deals. Keep in mind the price of the sale is very relevant - a 7% fee on a $100k home is a smaller commission, for the same amount of work generally, as a 5% fee on a $200k home. The key is not the amount/percentage, it's the value you get for it, so the answer is 2% is too much (for some lazy REALTORS) and 6% is not enough (for the super hard working group that always sells listings higher and faster than the market).

Posted: 08/24/2007 at 10:59AM

The commission has changed over the years. Some markets were at 7% 20 years ago while others were at 5% back then. Raw land can be listed at 10% if the value of the land is low. Very large deals might have smaller margins as the work does not go up in a linear fashion with the price.

The Internet has reduced the commissions a bit in that there are more discount brokers.

Get too tight and the buyer agents will not show your place. How many extra days on the market does it take to wipe out any possible savings from a discounted listing?

There is no cartel yet there is not a perfectly free market. Do what you need to so you get your deals done.

John Corey

Posted: 09/25/2007 at 07:33PM

here is so cal, when the market was hot a couple years ago, it was not uncommon for listing side agents to charge 1% and try and get volume. and this is where help u sell and some of the other discount brokers really gained steam. the listing side was really easy back then, you put up a listing and in 7 days you get 5 offers above asking. nowadays, people including myself are offering 3-4% for the buying side. trying to get the buying side agents to bring their clients in the door and maybe even convince them to take your place over the others. but for me, its really just to get them in the door, and hopefully the great rehab job sells itself.

Posted: 10/08/2007 at 04:18AM

6% is average, not always common.

The area i'm in still has alot of 7% listings. I've run in to a few that have been 8%. It's all about what you're providing. Anymore, i'll let the seller pick, 6% or 7% w/ a higher co-op over the 6%.

I could justify a 10% commission....most people don't understand, but a GOOD agent will be worth far more than 6,7, or 10%. A good agent will improve his commission, and add an additional 5% to 10% to the sales price compared to a poor agent or FSBO.

Posted: 11/28/2007 at 03:19PM

In my area I see 6% commissions more often than any other number. In my area an average house price is $135,000, so that means you get $8,100 for selling a house, right?

Wrong.

Unless you are fortunate enough to both list the house and find the buyer, you'll be getting 3%. So you're still getting $4,050, right?

Wrong.

Your employing broker typically gets half of that, so now you're down to 1.5% ($2,025).

Don't forget you have to pay income taxes on that $2,025. Don't forget that most brokers charge a desk fee ($350/month, or so). Don't forget your advertising costs, your travel costs (with gas at $3+ per gallon). Etc.

After all is said and done, a typical broker is very lucky to net more than 1% on a house.

Posted: 12/03/2007 at 10:16AM

Gas used to sell for .35 a gallon -- Now that we have better technology to obtain it and better refinng methods to extract more fuel from the crude oil the price should be lower!

Just kidding, the price of eveything else has went up and we always come up with more creative ways to spend money on advertising.

Posted: 12/30/2007 at 02:36PM

In our area the commission for the listing and selling side is 6%. If you FSBO you can offer broker protection and pay 3% to any agent who wishes to get involved. You are wasting time to think that you can pay less than that in our area. I do think 6% is too much. The classified ads that the brokers pay for (new listings etc.) don't work anymore so there's a waste of money right there. If you are a top producer and sell and list two homes on one deal your broker might let you offer a 5% but it is rare and must be approved in advance by the broker. Well, that's the sunny south.

Posted: 01/27/2008 at 10:43AM

Generally on the order of 5 or 6 per cent of the selling price. It can vary or be negotiated under some circumstances.