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If buyers are local, do their own research, and a selling agent is on 100 percent commission, what kind of rebate could a buyer expect?
lol, nothing. The agents go on a 100% commission model for themselves, not to hand any "extra" cash to a buyer. The trade-off for the agent is they get to pay all of the expenses their broker normally would themselves + pay for the right to hang their license with the "low fee" (and also low/no help) broker.
When a home is listed, it is then placed on the MLS. The odds that it would be sold by the listing agent/office are very slim as everyone is told to get their buyers agent when they buy a home.
The norm in most markets is 6%, which means that the listing agent, his brokers office, the selling agent, and the selling agents office will each receive 1.5%. The agent and the others each have a lot of expenses that the public does not know about so their share is a long ways from all spendable money.
Asking the agent to cut their commission and rebate some, is like if you work for $50 an hour, and your boss asking you to work for only $25 an hour that week. How would you feel about it?
The average income by all real estate agents is $35,000 per year before they start deducting all expenses. Take all the sales, and divide that number by the total agents, and they sell 3 homes on the average a year. Now comes the fun part. Eighty Percent of all homes, will be sold by 20% of the agents. Eighty percent of all that become agents, will leave the business because they cannot make a living, many spending all the money they had saved up and can borrow without making a sale.
Get an agent to list at a lower than normal price, or list with a low cost flat fee agent, and the majority of agents will not even show the property, as they cannot afford to do so, needing all the normal commission to earn a living. Would you want to work for a week or a month for half salary.
When a home is listed, it is then placed on the MLS. The odds that it would be sold by the listing agent/office are very slim as everyone is told to get their buyers agent when they buy a home.
The norm in most markets is 6%, which means that the listing agent, his brokers office, the selling agent, and the selling agents office will each receive 1.5%. The agent and the others each have a lot of expenses that the public does not know about so their share is a long ways from all spendable money.
Asking the agent to cut their commission and rebate some, is like if you work for $50 an hour, and your boss asking you to work for only $25 an hour that week. How would you feel about it?
The average income by all real estate agents is $35,000 per year before they start deducting all expenses. Take all the sales, and divide that number by the total agents, and they sell 3 homes on the average a year. Now comes the fun part. Eighty Percent of all homes, will be sold by 20% of the agents. Eighty percent of all that become agents, will leave the business because they cannot make a living, many spending all the money they had saved up and can borrow without making a sale.
Get an agent to list at a lower than normal price, or list with a low cost flat fee agent, and the majority of agents will not even show the property, as they cannot afford to do so, needing all the normal commission to earn a living. Would you want to work for a week or a month for half salary.
Old trader,
With all due respect to your experience and contributions, this is the sort of junk that gives agents a bad name for selfishly misleading consumers whom they should hope to serve in a fiduciary role.
It is a regurgitation of disingenuous corporate realty agent-centric scripts hoping to bamboozle consumers to accept historic price-fixed business models.
No one cares if a broker (NC is an all broker state) is dull enough to routinely give a firm 50% of their revenue. That is ridiculous bloat that consumers should seriously consider avoiding.
No one cares about the average agent income. Of course, buyer OR seller should always ask a prospective agent if they can afford to be in business.
In the typical hot market, good buyers' agents will crawl over hot coals to get their clients into inventory, no matter who lists it.
In my county market, for 90% of residential sellers, there is no marketing or sales reason to pay more than 4.8% commission. Brokers price-fixed buyer agent co-brokes at 2.4% many years ago, and buyers agents work harder than listing agents to get to a contract.
New questions for buyers to ask prospective agents who suggest they will work as a fiduciary:
Will you show me flat-fee firm listings that tick off my checklist boxes?
Will you show me all listings, regardless of buyer agent co-broke offered, that tick off my checklist boxes? Will you give me the opportunity to decide if I want to make up the difference if the co-broke is too low?
Will you show me FSBOs that tick off my checklist boxes?
Anything less than "definitely" is a disqualifier.
But, I am a bit torn. As hackneyed as they are, I do appreciate that the hackneyed scripts for many consumers increase appeal to the choice of using an independent broker such as myself.
Last edited by MikeJaquish; 06-26-2016 at 05:21 AM..
Old trader,
With all due respect to your experience and contributions, this is the sort of junk that gives agents a bad name for selfishly misleading consumers whom they should hope to serve in a fiduciary role.
In response to:
"When a home is listed, it is then placed on the MLS. The odds that it would be sold by the listing agent/office are very slim as everyone is told to get their buyers agent when they buy a home".
Thanks for the honest and transparent post MJ.
The odds of my buying in Sarasota directly from a listing agent is 100 percent.
Look, if I bring a buyer's agent into the mix, I think that typically carves out 3 percent of the commission.
When I bought my current place, new from the builder, my dad was a RE Agent and the builder and his listing agent cut 3 percent off the price. I think that was a mistake on our part. The extras were so poor quality that we negotiated the price down to the point that the builder said "I can't sell lower for that". If we were smart we would have insisted that the price include my dad's commission, and lowered the price further.
So let me try my question again. If I only deal with listing agents, how much of a rebate can I reasonably ask for? I'm thinking 2 percent in the typical model as they would have to share 3 percent with a buyer's agent.
The odds of my buying in Sarasota directly from a listing agent is 100 percent.
Look, if I bring a buyer's agent into the mix, I think that typically carves out 3 percent of the commission.
When I bought my current place, new from the builder, my dad was a RE Agent and the builder and his listing agent cut 3 percent off the price. I think that was a mistake on our part. The extras were so poor quality that we negotiated the price down to the point that the builder said "I can't sell lower for that". If we were smart we would have insisted that the price include my dad's commission, and lowered the price further.
So let me try my question again. If I only deal with listing agents, how much of a rebate can I reasonably ask for? I'm thinking 2 percent in the typical model as they would have to share 3 percent with a buyer's agent.
You aren't a party to the contract between the seller & the listing broker. It's none of your business & shouldn't be a concern for you. If you really want an agent's commission, sit through the class, pay the fees & get your own license, then you can "rebate" as much as you like to yourself.
You aren't a party to the contract between the seller & the listing broker. It's none of your business & shouldn't be a concern for you. If you really want an agent's commission, sit through the class, pay the fees & get your own license, then you can "rebate" as much as you like to yourself.
Look, it's just one bucket of money.
If I offer 300k on a property w/o a buyer's agent, the selling agent/broker typically would make 6 percent. That's an extra 9k vs. if I had a buyer's agent.
I'd prefer a 2 percent rebate so that the selling agent could get credit for a larger sale.
Would the selling agent rather present a 300k offer from a buyer/buyer's agent and lose that 1 percent (in this case 3,000 dollars)?
The odds of my buying in Sarasota directly from a listing agent is 100 percent.
Look, if I bring a buyer's agent into the mix, I think that typically carves out 3 percent of the commission.
When I bought my current place, new from the builder, my dad was a RE Agent and the builder and his listing agent cut 3 percent off the price. I think that was a mistake on our part. The extras were so poor quality that we negotiated the price down to the point that the builder said "I can't sell lower for that". If we were smart we would have insisted that the price include my dad's commission, and lowered the price further.
So let me try my question again. If I only deal with listing agents, how much of a rebate can I reasonably ask for? I'm thinking 2 percent in the typical model as they would have to share 3 percent with a buyer's agent.
I would leave it to the agent to quote his own business.
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