24% Listing Commission?

Question

I was looking at one property that the realtor claimed to have a 24% commission to sell. The property was listed under $30,000. There was nothing special (bad or good) about the property. Just another average lot with utilities.
What's going on here? Is the realtor sticking it to the seller?

Russell Brazil · Answer

That's what happens on low price properties.

Pretend it was a normal commission rate of say 2.5%. An agent would lose a couple grand servicing the property at that rate.

Russell Brazil · Answer

You clearly have little knowledge of how to run a business and the costs associated with it.

James Wise · Answer

I've sold 100's & 100's of low value homes. Commission I charge is 7% or a minimum of $5k. So once you get into sub $70k stuff you're looking at the $5k fee. Whether the property is $4k or $40k, you are still paying $5k to me to sell it.

It should be obvious to you why this is, but it looks like it's not. An agent cannot work for 7% of $4k because that is only $280. It costs a lot more than $280 to market and sell a home. In business, the idea is to make more money than you spend.

Chris Seveney · Answer

@Jack Deer

We had a timeshare we sold for $30k and paid $5k commission. I did not even blink an eye at is as they have a min. They need to make before they lose money or even worth marketing the asset for you

I don’t believe at all this is like McDonald’s, it’s more like calling an electrician to change a light bulb, there will be a travel charge // min charge for someone to come do a specific job.

James Wise · Answer

24%!!!!!!!!!!!!!!!

What a loser. Should have charged more.

Eric James · Answer

McD's is free to charge whatever they want, and the public is free to not purchase if they choose not to. Same goes for any service.

Dan Thomas · Answer

Like any industry there are professionals worth every penny and "professionals" not even worth $280.  I have bought an investment property that had a very tight time window to close. No exceptions. We ran into an appraisal issue and our agent helped us fix it and negotiated a longer closing despite the fact that they initially wouldn't budge.  I have worked with agents that needed help filling out the description of the property (example of the bad ones)

I'm not an agent but I can only imagine low price properties are MORE time consuming than a luxury home. Typically there are reasons these homes are so cheap and a good agent will help their client navigate those issue s.

Drew Sygit · Answer

@Jack Deer vacant lots typically take much longer to sell, so agend spends mroe time.

Would you rather pay an agent by the hour?

24% Listing Commission?

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