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Real estate agent commissions
Posted on 3/29/17 at 11:17 am
Posted on 3/29/17 at 11:17 am
Am interested in some discussions about real estate agent commissions.
Since 2005 I've done 3 transactions with the same agent and her side got the following cuts:
-2005 buyer's agent cut of 3% (of 6% total commission) - 10k
-2010 seller's agent cut of 3% (of 6% total commission) - 13K
-2014 buyer's agent cut of 3% (of 6% total commission) - 19k
So she's made 42k off these transactions (minus whatever cut she might have to make to broker, etc).
We are about to sell and buy again and will probably use her. She's done a good job but none of the transactions have been particularly difficult, lengthy.
We live in an extremely hot market in Atlanta metro (City of Decatur) and our house will sell quickly somewhere in the $775-800k range. We will buying in another part of the city at the same time likely in the same price range.
If we agree to 6% again (likely 3% to her side) on the seller side and she gets the typical 3% on the buyer side that's another $48k to her.
To me it seems likely that we could negotiate with her. Thoughts on strategy if this was you? Would you bypass using an agent at this point since we are very familiar with the market, know the area and what we want? If you use this agent again what would you offer given the standard 6% in the market (3% to each side)?
How much do you think a successful/reputable agent would come down for a repeat customer with transactions at this price level? Surely we could get a 1% reduction on the seller side (5% instead of 6%) and also negotiate a kickback of her commission on the buyer's side (i.e. if she gets 3% as our buyer's agent she kicks back 1% to us - is that legal?).
Just looking for discussion of ideas, what you've seen in the market, what's "standard" these days, etc.?
Since 2005 I've done 3 transactions with the same agent and her side got the following cuts:
-2005 buyer's agent cut of 3% (of 6% total commission) - 10k
-2010 seller's agent cut of 3% (of 6% total commission) - 13K
-2014 buyer's agent cut of 3% (of 6% total commission) - 19k
So she's made 42k off these transactions (minus whatever cut she might have to make to broker, etc).
We are about to sell and buy again and will probably use her. She's done a good job but none of the transactions have been particularly difficult, lengthy.
We live in an extremely hot market in Atlanta metro (City of Decatur) and our house will sell quickly somewhere in the $775-800k range. We will buying in another part of the city at the same time likely in the same price range.
If we agree to 6% again (likely 3% to her side) on the seller side and she gets the typical 3% on the buyer side that's another $48k to her.
To me it seems likely that we could negotiate with her. Thoughts on strategy if this was you? Would you bypass using an agent at this point since we are very familiar with the market, know the area and what we want? If you use this agent again what would you offer given the standard 6% in the market (3% to each side)?
How much do you think a successful/reputable agent would come down for a repeat customer with transactions at this price level? Surely we could get a 1% reduction on the seller side (5% instead of 6%) and also negotiate a kickback of her commission on the buyer's side (i.e. if she gets 3% as our buyer's agent she kicks back 1% to us - is that legal?).
Just looking for discussion of ideas, what you've seen in the market, what's "standard" these days, etc.?
9
Posted on 3/29/17 at 11:52 am to elposter
I'm interested to hear responses from this as well. We recently planned to sell our house with the same agent who bought it with us 4 years ago. I had to ponder this bc she was essentially going to make way more in commission than what I would in appreciation value alone. We ended up just staying out and not selling.
I felt obligated to use her too though bc she was a client of mine.
I felt obligated to use her too though bc she was a client of mine.
Posted on 3/29/17 at 12:43 pm to Shepherd88
Where I'm at, many, I'd almost say most transactions are done at 5%. Personally, I will probably always try to list by owner first for some period, offering 2.5-3% to a buyer's agent.
As far as your buy side, no harm in letting each potential house's listing agent show you the house, but I'd expect to write the offer for 2.5-3% lower with that in mind.
As far as your buy side, no harm in letting each potential house's listing agent show you the house, but I'd expect to write the offer for 2.5-3% lower with that in mind.
Posted on 3/29/17 at 12:51 pm to elposter
How much does her broker keep? Highly doubtful that she rakes the entire 3%.
ETA: Just saw your reference to broker's cut. That could be 40-50% possibly.
ETA: Just saw your reference to broker's cut. That could be 40-50% possibly.
This post was edited on 3/29/17 at 1:04 pm
Posted on 3/29/17 at 12:58 pm to elposter
quote:
We live in an extremely hot market in Atlanta metro (City of Decatur) and our house will sell quickly somewhere in the $775-800k range
Never heard any neighbors or friends have a bad experience with Duffy Realty.....I think it's like $300 down and 0.33% at closing. You have to do a bit more work yourself, but a neighbor sold his house before he even put the sign in the yard with Duffy
Posted on 3/29/17 at 1:14 pm to IT_Dawg
quote:
Never heard any neighbors or friends have a bad experience with Duffy Realty.....I think it's like $300 down and 0.33% at closing. You have to do a bit more work yourself, but a neighbor sold his house before he even put the sign in the yard with Duffy
Hear their ads all the time on the radio. I don't really understand how they make money. I guess it is just pure volume and the most minimal service possible? Could be an option particularly if you pretty much do your own homework on comps and stuff and are reasonably familiar with the negotiating/closing process and documents already. I'll look into them and what they are providing above FSBO for such a low price.
Posted on 3/29/17 at 1:41 pm to elposter
You need to realize you are going to have to pay 2.5% at least to the other realtor when you are buying or selling, so at most you are looking at saving yourself half. Then, you need to think about any work its going to take you and if potentially hiring a Good realtor will help you sell it faster and for more?
I mean on a $800k house you are looking at a total savings of $20k. Now I realize that's a lot of money, but let's say you hire a realtor and she is able to sell it for a little more?
I would definitely talk about a sell/ buy deal though. Maybe they'll do it for 1.5% for each to save you 1-3% total.
I mean on a $800k house you are looking at a total savings of $20k. Now I realize that's a lot of money, but let's say you hire a realtor and she is able to sell it for a little more?
I would definitely talk about a sell/ buy deal though. Maybe they'll do it for 1.5% for each to save you 1-3% total.
Posted on 3/29/17 at 3:17 pm to elposter
when I work both sides of transaction I charge $1000 as listing agent and that includes professional pictures through showcase photography, listing service through CSS, and all marketing materials and brokerage fees. I ALWAYS offer buyers agent 3%.
I then charge 3% as buyers agent and that is non negotiable.
Edit - kick backs are illegal
I then charge 3% as buyers agent and that is non negotiable.
Edit - kick backs are illegal
This post was edited on 3/29/17 at 3:25 pm
Posted on 3/29/17 at 3:37 pm to ItNeverRains
Use Redfin and save 1.5%?
Posted on 3/29/17 at 4:21 pm to ItNeverRains
quote:
kick backs are illegal
I assume you mean un-disclosed kickbacks are illegal. There are a number of discount agents here in Houston. They offer discounted commissions on both the buy side and sell side. On my last purchase, I used one and they credited 2% back on my settlement statement, so my agent's net take was 1%. It just lowered the amount of my equity check.
This post was edited on 3/29/17 at 4:22 pm
Posted on 3/29/17 at 4:37 pm to tissle
quote:
Use Redfin and save 1.5%?
Redfin charges 1.5% each side of the transaction. I'm essentially the same plus $1000 for all marketing materials, showing service, open houses, and you work with me start to finish of both transactions. Redfin can't touch me.
Edit - correct undisclosed. Just make the listing agreement for discounted % and save your closing attorney and broker the potential clerical & auditing headache.
This post was edited on 3/29/17 at 4:39 pm
Posted on 3/29/17 at 4:59 pm to ItNeverRains
Get a real estate license and list yourself.
Posted on 3/29/17 at 5:18 pm to ItNeverRains
quote:
Redfin charges 1.5% each side of the transaction. I'm essentially the same plus $1000 for all marketing materials, showing service, open houses, and you work with me start to finish of both transactions. Redfin can't touch me.
Sounds like there is more competition than I realized to my agent's traditional 6% commission structure and I probably have decent bargaining power if she wants to get her 4th and 5th transaction from me. Thanks for the information.
Posted on 3/29/17 at 5:24 pm to ItNeverRains
quote:
Redfin charges 1.5% each side of the transaction. I'm essentially the same plus $1000 for all marketing materials, showing service, open houses, and you work with me start to finish of both transactions. Redfin can't touch me.
I mean I can only speak from a sellers standpoint. Getting 1.5% contributed to closing costs was fricking awesome :)
Posted on 3/29/17 at 6:22 pm to tissle
To the OP, start with a google search in your area like "discount real estate agents in Atlanta" and see what pops up. Call a few to get an idea of what's on offer and then use that as a datapoint for your agent.
Posted on 3/29/17 at 7:07 pm to ItNeverRains
Are commissions more negotiable on properties over a million? Asking for a friend.
Posted on 3/29/17 at 7:08 pm to tissle
quote:
I mean I can only speak from a sellers standpoint. Getting 1.5% contributed to closing costs was fricking awesome :)
Just so I'm clear, my sellers pay me zero to sell their home if I get agency for them on the buyers side. That beats 1.5% by a landslide.
Posted on 3/29/17 at 7:12 pm to VABuckeye
quote:
Are commissions more negotiable on properties over a million? Asking for a friend.
My structure is my structure. It's $1000 bucks for broker fees, photography, showing services, & marketing.
From the traditional agent perspective I'd rather have 10 100k properties vs one 1M property anyday of the week. I'll close and get paid on those 100k's faster than that 1M almost every single time. The marketing dollars usually get tight as well.
Posted on 3/29/17 at 8:30 pm to elposter
5% is the new normal, thankfully.
Hope it continues to slide.
Hope it continues to slide.
Posted on 3/29/17 at 8:38 pm to ItNeverRains
True but...you don't live in Northern Virginia.
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