Is this true? (regarding commisions)

[Jen1098]

We will be putting our house up for sale shortly. I met with the agent last night just to do a walk through and get ideas as to what we need to do with the house to get it ready.

She went over numbers with me briefly and we talked about commision. It will be either 6% or 7%. The other homes in our neighborhood are at 6%. She said by us going 7% it would make us more attractive to other agents b/c they'd get more money out of it. She of course adds " I don't work that way but sad to say some agents do"
Does this make sense I mean nowadays buyers can look up homes on line and tell their agents what homes they want to see. That's what we did when we were looking.

So do you think an agent will not show a house b/c it's 6% instead of 7%?

I know it's only 1% but we haven't been here to long so as it is now we'll be lucky to break even so we need to save what we can.

TIA and sorry so long. :)

[boilermaker]

Honestly, without knowing anything about your area, I can't tell you if it is true or not. However, I would definitely interview at least 2 other agents before you decide who to list with. All of them are going to have a slightly different view of the value and faults of your house, and a different idea of how they will find the "perfect" buyer. You should see which one meshes with your thought best. And the commission is part of it. If other agents say the same thing, go with it. Also, the commission is usually split in half, so by upping you that 1%, she upped her fee by .5%.

[Jen1098]

Thanks Boilermaker. You're right we really should meet with other agents.
As for our area homes here don't sell the way they do every where else.

Also, the commission is usually split in half, so by upping you that 1%, she upped her fee by .5%.
Very good point.

[linda_loo]

a slew of my friends have bought friends around the city, in the last 5 years (us included) and we all were at 6%.

[lml41981]

If you're using the same realtor you used to buy the place, he or she ought to cut you a deal on the commission. Our fee is 5% - 2% for my realtor and 3% for the buyer's agent.

[KarenS]

Does this make sense I mean nowadays buyers can look up homes on line and tell their agents what homes they want to see. That's what we did when we were looking.Yeah, but not all buyers do. My ILs don't even have an internet connection right now - they have a house in Phoenix where they're moving (as we speak, in fact), but if they didn't, they'd be relying mostly on a Realtor to find them a house.

Now a good Realtor won't *not* show them a house with a lower commission, but she (or he) will probably show them full commission houses first. And quite frankly ...can you blame them? Wouldn't you try to encourage people to buy "up" if your income depended on it?

Karen

[Jen1098]

LindaThat's good to know that you and your friends had a 6% commission. I'm thinking it must be the norm then for our area.

lml41981 You've got a great deal. Lucky you. We aren't using the same agent though-he isn't aggressive enough and his office is to far.

KarenS Good points and I guess it's hard imagining people not having internet access these days. I personally wouldn't sway people towards a house with a 1% higher commission but I'm sure there are plenty who would.

This agent will be calling us on the 12th to set up a time to go over paperwork and $$. I do think we will be going with the 6% though. But I think I might make a couple of other calls to agents to see what they say.
Thanks for your responses.

[juliemag]

As far as I know - realtor's are entitled to 6% commission. But when we bought/sold our house in June our realtor only charged 4% (2 for her, 2 for the other agent). Both realtor's were friends of the family.

[KarenS]

As far as I know - realtor's are entitled to 6% commission.Actually 7% is the standard, but a lot of brokers/Realtors are going with 6% nowadays to gain the business.

Also remember that if your Realtor lowers her commission for you, that doesn't mean that she's still splitting it evenly. A Realtor who lowers a commission has to accept that the buyer's agent may not accept a reduced commission. So if you list your house at 5%, your Realtor may have to take only 2% so the buyers agent can get their full 3%.

Also, just a semantic note - Realtor is a proper noun and should be capitalized. :)

Karen

[wine_o_girlie]

I would be very wary of this agent. I would definitely interview other agents before signing any listing agreement with her. I am in the Northeast and 6% if by far the norm (or even less because we are in such a hot housing market that so many do FSBO's that agents are a bit more flexible if you negotiate hard with them).

[Aimee]

Around here, the standard commission is 6%. When my mom was interveiwing Realtors a few years back, some of them offered packages at 5%, 6% and 7%, each offering a different level of advertisement.

IIRC, the 7% package included a listing on a local community access channel that shows homes for sale, large pictures in the newspaper, etc.

It seems a bit shady to me, like the Realtor is trying to squeeze a little more out of you by making you think that if you don't go for the higher commission, your house won't get shown.

[KarenS]

It seems a bit shady to me, like the Realtor is trying to squeeze a little more out of you by making you think that if you don't go for the higher commission, your house won't get shown.No, it's just honest. Realtors are trying to make money too. A good Realtor will not *not* show you a house just because of a lower commission, but they will steer you towards a house with a full commission first ... it's only sensible.

Karen

[julietchicago]

Actually there is no "standard" commission, and if there was, 7% would definetly not be the standard rate.

In the past, when interest rates were higher and the market was much slower, the typical rate was round 6-7%.

Now, with a stronger market and lower interest rates, I would say a typical commisison is anywhere from 4-6%. And if an agent gets 6% that is REALLY good.

In my area in Illinois, we offer 2.5% to the selling agent, and the listing agent keeps the remainder.

PLEASE PLEASE PLEASE interview other agents. I can't believe this agent actually said some agents may not take their buyers through unless you offer them a higher commission.

It sounds like she is just trying to make more money for herself.

I am a Realtor, feel free to PM me with any other questions!!

ETA: Keep in mind, you and the Realtor set the commission. There is no minimum requirement. Commission is negotiable!!

ETA: Yes, some shady agents out there will not show a property if the commission is less than what is normally offered. However, it sounds like your agent used that as a way to scare you. There are more honest Realtors out there than dishonest ones!!

[EmilyBronte]

I am also a Realtor, although my license is currently inactive because I'm a SAHM.

The company I worked for preprinted 7% on all their listing forms and we could go down as far as 6% without special permission from our Broker-in-Charge. ETA: In my area, commissions don't usually fall below 5% unless the Realtor is cutting a deal for some reason (like they're a friend or it's an extremely expensive piece of property). Also, one way some listing agents offset the commission split is by doing, say a 5% listing with a $1000 selling bonus payable to whatever agent brings a buyer to the closing table. That way there is real incentive for agents to bring buyers to the house without the listing agent profitting from it.

At my company, if an agent got a 7% listing they did earn a little bit more, but the split with the buyer's agent was higher as well. I think the listing agent would get 3.8% and the selling agent would get 3.2% (the difference is because the listing agent pays for advertising). With a 6% listing the split would be 3.4% for listing agent and 2.6% for the selling agent.

The way my company explained the reason it was better to go with a 7% listing over a 6% listing was this: IF there are 2 houses that are comparable being offered at a comparable price and the buyer's agent is researching homes to take the buyer to look at, the agent will be more likely to go to the house where they will make more.

I never did a 7% listing, but other agents who did sometimes threw in "extras" to make it worth the seller's money - like paying for a home warranty for the buyer on an older home, extra advertising in more expensive places, etc.

Definitely interview more than one agent. Whatever agency you use, make sure they have a policy where if you end up hating your agent you can contact the broker-in-charge and get a new agent assigned. My company offered a guarantee of service and at any time the seller could contact the BIC and get a new person if their agent was failing to meet the criteria listed on the guarantee.

Good luck.

[EMsMom]

Speaking as a former Realtor this is what I know:

* Yes, there are agents out there that refuse to show a property that is listed under 7%. I worked with one. I was not one of them.

* According to our state law, PA, it is illegal to have a standard commission, so theoretically, agents aren't supposed to discuss, with other agents, how much commission they should charge or come up with a set one...

* Bottom line is you are the seller and you are the boss. YOU are the one to determine the commission. Could this realtor be telling you what she said to get a higher commission, probabably... But there is truth in it.

From a personal standpoint, I never saw a problem with having a commission at 6% or whatever. I worked for the seller or the buyer. If the buyer wanted to see a lower commission property, I'd show it. If the seller didn't want to give a higher commission, that was fine, too.

Remember these people are working for you... On your behalf!

[Gracie]

Although 6% is the standard commission in my area, FI chose to offer 7% when listing his condo to make it more attractive to Realtors. There are several other units in his condo community for sale and we live in a large metropolitan city where new condos are going up all over the place, so it made sense for him to make his listing as attractive as possible. I guess it just depends on your market and how motivated you are to sell quickly.

FWIW, I would recommend limiting the listing contract to a short time period, say 3 months or so. This way when you re-list after 3 months, your home will appear as a new listing, which tends to generate more activity. I know when we were shopping for a home I checked online daily for new listings. This would also give you an opportunity to change Realtors if you so desire. And…….for even more suggestions that you didn't ask for :D I would also confirm with your Realtor what exterior/interior pictures will be made available for the online listing. I immediately think there must be something to hide when I see a listing with only an exterior picture or if there are pictures of random rooms but not one of the kitchen.

[EmilyBronte]

FWIW, I would recommend limiting the listing contract to a short time period, say 3 months or so. This way when you re-list after 3 months, your home will appear as a new listing, which tends to generate more activity. I know when we were shopping for a home I checked online daily for new listings. This would also give you an opportunity to change Realtors if you so desire. And…….for even more suggestions that you didn't ask for :D I would also confirm with your Realtor what exterior/interior pictures will be made available for the online listing. I immediately think there must be something to hide when I see a listing with only an exterior picture or if there are pictures of random rooms but not one of the kitchen.

Two things: 1) Even though an expired or withdrawn listing starts a new count of days on the market, a Realtor can check the history on the house to get a true picture of how long it's been on the market. Our MLS here has listing history dating back as far as 15 years.

2) I agree about the pictures. But before having the pictures taken, try to have the home in ship-shape condition or the pictures could actually have a negative impact rather than a positive impact. Declutter, declutter, declutter! :)

[Gracie]

Two things: 1) Even though an expired or withdrawn listing starts a new count of days on the market, a Realtor can check the history on the house to get a true picture of how long it's been on the market. Our MLS here has listing history dating back as far as 15 years.

Let me clarify....I was referring to properties appearing as new listings to online shoppers, not to Realtors. My favorite site offers the option of viewing properties listed within the past 3, 5, or 7 days. I usually knew when a new listing was previously listed, but very often the new listing would include a price drop or other pertinent new information that I otherwise may have missed if the adjustment was made within an existing listing. When FI re-listed his condo recently, he had a good deal of activity during the first couple of weeks after not having much foot traffic or online viewings. Plus, Realtors are also going to notice the new listing and even though they can see it was already on the market, it will hopefully get a bit of renewed Realtor attention as well.

ITA about de-cluttering!

[EmilyBronte]

I see where you are coming from now, Gracie. I don't really know of any websites for buyers around here that go into that much detail regarding when it was put on the market.

[Gracie]

EmilyBronte--my favorite website is localized but it's through a national real estate company so it (or something similar) is probably available in other markets as well...here's the link in case you're interested in checking it out:

http://www.coldwellbankeratlanta.com

Under the search by city, county, or zip options you can select properties listed in the past 3, 5, or 7 days using the just listed drop down box (or leave blank to see all properties listed within your search parameters)

You also have the option of searching by neighborhood at the bottom of the page. This option is helpful to see what other homes in the neighborhood are like and how much each one is listed for--we ruled out many listings just by seeing what other homes in the same neighborhood were like.

[EmilyBronte]

Interesting... I worked for Coldwell Banker and our website wasn't that involved as far as days on the market. Now the rest of it was very similar, though.