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Old 01-31-2019, 08:51 PM
 
Location: Raleigh NC
8,314 posts, read 6,527,886 times
Reputation: 7354

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Quote:
Originally Posted by Berteau View Post
So pay to have it appraised. It would be a lot cheaper.
Oh, I'm sorry for being incomplete.

You can drive to any dealership anywhere in the land, and sell that car on the spot IF you have the title.
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Old 01-31-2019, 11:16 PM
 
943 posts, read 218,997 times
Reputation: 1890
Quote:
Originally Posted by Blazin65 View Post
My house is under contract and the agreed upon commission was 6%. The house sold pretty quick and I've made the comment that the agent didn't have to do too much and of course that rattled them. According to them, their share of the 6% is very low.

So I'm curious if anyone has an ideal of about what this is for the actual agent. I do know this agent is fairly new to the business, so I'm guessing it's low. Let just use $200000 selling price for easy numbers. How much of 12000 actually goes to the listing agent in someones good guess?
A good realtor actually told me.

For the 6% total commission, half of that goes to the seller's broker and the other half goes to the buyer's broker. The listing agent and the selling agent split half of what the broker gets as their commission.

In summary: Of 6% total commission paid by the seller, 3% to the seller's broker, 3% to the buyer's broker, and 1.5% goes to each seller's agent and listing agent.
The home sells fo $500K. Each realtor would get 1.5% of that which is $7500.00. That's $7.5K gross taxable income.
So if you find the neighborhood and the exact home, they unlock the door and make an offer on it that gets accepted, they gross $7500.00 for really only a few hours at most including attending the closing. It is very expensive which is why there are competing services now. Because even if in this example the buyer's realtor spends 10 hours, that's $750.00 an hour.

Of course they are rattled by the comment, because with the internet now people find the homes they want and the realtor doesn't have to do very much. Your real estate attorney doesn't make $750.00 an hour and he/she works directly for you only protecting your interests.
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Old 01-31-2019, 11:24 PM
 
943 posts, read 218,997 times
Reputation: 1890
Quote:
Originally Posted by jghorton View Post

If you, like many, believe that 6-percent is too much to pay a Realtor on a home sale, then don't sign an agreement to do so. If you do sign an agreement to do so, be glad if it is sold quickly and doesn't linger on the market, until you finally had to reduce the price 5-10-percent. (or ask if the realtor will reduce the commission if it sells within the first few weeks - or no other agent is involved).
The OP is simply making a Realization that the 6% commission is way too high for what little work was done, which is why many look to go For Sale By Owner next time. Let's be real honest here, the bulk of the realtors aren't very bright and don't even demonstrate good business sense for their own interests sometimes too. Your example about the tech coming into the factory to fix a machine isn't a good example, because that's highly skilled work. Many people buy and sell property without a realtor at all, because they use a real estate attorney for protection. Realtors are gatekeepers because of the MLS listings. Without that, in 2019 and technology they are only needed to make the appointment and unlock the door. Once you've been through the process of buying and selling a home, you can evaluate how useful the realtor really was. And the home didn't sell quickly because the realtor did anything, it was because the OP kept it in good shape, got it ready and priced it correctly for the market.
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Old 01-31-2019, 11:42 PM
 
943 posts, read 218,997 times
Reputation: 1890
Quote:
Originally Posted by Synott View Post
OP you donít have have right to fight against the commission you already agreed to paying 6%
The OP has the right to question it, which is why the OP posted. The OP is realizing now that it might be been better to sell the house yourself next time. It is a learning process like instead of paying big bucks to an accountant to do your taxes, you use Turbotax for a fraction of the cost.

The realtors who get defensive about this know they aren't really providing much of a service. Those who really do their job, who are helpful and don't work against you can make you feel they earned the commission. Those realtors aren't posting in C-D with their real names to get free advertising for their business, because they don't need to do that.
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Old 02-01-2019, 04:33 AM
 
Location: Cary, NC
32,285 posts, read 56,466,756 times
Reputation: 31020
Quote:
Originally Posted by nobodysbusiness View Post
Okay, cool. I am not sure why you felt the need to put me down, but whatever.
No putdown was intended at all.
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Old 02-01-2019, 06:29 AM
 
3,338 posts, read 2,860,041 times
Reputation: 6812
Quote:
Originally Posted by rummage View Post
A good realtor actually told me.

For the 6% total commission, half of that goes to the seller's broker and the other half goes to the buyer's broker. The listing agent and the selling agent split half of what the broker gets as their commission.

In summary: Of 6% total commission paid by the seller, 3% to the seller's broker, 3% to the buyer's broker, and 1.5% goes to each seller's agent and listing agent.
The home sells fo $500K. Each realtor would get 1.5% of that which is $7500.00. That's $7.5K gross taxable income.
So if you find the neighborhood and the exact home, they unlock the door and make an offer on it that gets accepted, they gross $7500.00 for really only a few hours at most including attending the closing. It is very expensive which is why there are competing services now. Because even if in this example the buyer's realtor spends 10 hours, that's $750.00 an hour.

Of course they are rattled by the comment, because with the internet now people find the homes they want and the realtor doesn't have to do very much. Your real estate attorney doesn't make $750.00 an hour and he/she works directly for you only protecting your interests.

This isn't accurate. Not all listing brokers share the commission received equally with the buyer's broker. Could be 4% to listing broker and 2% to buyer's broker. Then once received by the brokers the split with the agents could be anything from 50% to 100%. No way of knowing the internals of any deal.
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Old 02-01-2019, 06:40 AM
 
Location: Pixburgh
1,150 posts, read 1,101,625 times
Reputation: 1250
It also isn't remotely accurate because it assumes that is the life of a realtor, a couple hours for 3k when 99% of the time it is the opposite. Ask your realtor friends how often they end up working 20 hours for free.

Are there times I feel like 'wow I didn't have to do much for that commission' sure. Never a couple hours but, there are easy smooth ones.
But it is much outweighed by the 'wow I spent 40 hours over the past couple months showing houses and writing lowball offers for bill here and he decides he just can't afford what he really wants yet so is putting it off for now'

Basically like saying that dentist is over payed because when I took my daughter in for her severe toothache, they found out something was just stuck between 2 back teeth.
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Old 02-01-2019, 06:59 AM
 
Location: Cary, NC
32,285 posts, read 56,466,756 times
Reputation: 31020
Quote:
Originally Posted by rummage View Post
A good realtor actually told me.

For the 6% total commission, half of that goes to the seller's broker and the other half goes to the buyer's broker. The listing agent and the selling agent split half of what the broker gets as their commission.

In summary: Of 6% total commission paid by the seller, 3% to the seller's broker, 3% to the buyer's broker, and 1.5% goes to each seller's agent and listing agent.
The home sells fo $500K. Each realtor would get 1.5% of that which is $7500.00. That's $7.5K gross taxable income.
So if you find the neighborhood and the exact home, they unlock the door and make an offer on it that gets accepted, they gross $7500.00 for really only a few hours at most including attending the closing. It is very expensive which is why there are competing services now. Because even if in this example the buyer's realtor spends 10 hours, that's $750.00 an hour.

Of course they are rattled by the comment, because with the internet now people find the homes they want and the realtor doesn't have to do very much. Your real estate attorney doesn't make $750.00 an hour and he/she works directly for you only protecting your interests.
Rattled? Hardly.

But, to play along...
Actually, the way most clients "find" the house is in one of two ways:
1. They receive the nearly real time alert from an MLS search I set up with the parameters they give me, and they contact me with interest in the listing.
2. They independently search outside those parameters.

I help them in either way.
I also recognize that people have different wants and needs when it comes to support in making major decisions.
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Old 02-01-2019, 08:10 AM
 
Location: Raleigh NC
8,314 posts, read 6,527,886 times
Reputation: 7354
Quote:
Originally Posted by rummage View Post
The OP has the right to question it, which is why the OP posted. The OP is realizing now that it might be been better to sell the house yourself next time. It is a learning process like instead of paying big bucks to an accountant to do your taxes, you use Turbotax for a fraction of the cost.

The realtors who get defensive about this know they aren't really providing much of a service. Those who really do their job, who are helpful and don't work against you can make you feel they earned the commission. Those realtors aren't posting in C-D with their real names to get free advertising for their business, because they don't need to do that.
If your tax return is very simple - a couple of W-2's, statements from your mortgage company, your property tax bill, and whatever interest you earn on savings accounts (retirement asset buy/sell isn't taxed, nor are held securities), your readily accounted charitable donations - then folks should 100% use Turbotax or similar.

My tax return isn't as simple. I rely on a CPA to stay up on all the tax laws, and advise/file for me accordingly. We have conversations throughout the year about things I should be doing for tax purposes. And I get the peace of mind (a few extra $$ I know) that I do have a licensed professional standing behind me.

The only stat we've seen is ~ 7% of homes sell as FSBO. Further, about 1/2 of those are not "arms length" transactions - the Seller and Buyer know each other somehow. But nothing requires anybody - buyer or seller - to use a Realtor/agent to transact a home sale. Nothing.

There have always been many astute adults that can successfully sell their home without an agent. Either they had owned enough homes to understand the process, or their home was in an especially desirable neighborhood that people actively "stalk", or they were in an area with sufficient traffic that the Buyers readily found their home. And a % of FSBO sellers know how to accurately price their home, treating it as a business transaction and not an emotional anchor.

The best professional agents I know are thrilled for the advent of consumers searching online for a house to buy. It provides much more information directly to the consumer, and it greatly helps us do our job of determining the houses that interest a buyer. Other tech tools as simple as scanning and e-signing have further improved the efficiency of our job ... but they do cost money. Money that we pay for the efficiency. Doesn't most efficiency come at some cost?

I'm not sure what the last part of your post is implying. All I know is that I use my real name because I interpret guidelines and rules that we have as Realtors to say that I must be accurate and transparent. And I make a good living helping and serving folks in the buying and selling process.
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Old 02-01-2019, 08:19 AM
 
33 posts, read 4,727 times
Reputation: 97
The OP asked a simple question regarding a scenario where a house sold for $200K with a 6% commission; that is, how much does the listing agent get?


In response, he got a lot of defensive answers from real estate agents and brokers about how hard they work. Who cares? Just answer the basic question.


I have talked to some real estate agents. My guess is if the commission had to be split with the buyer's agent, and after the listing agent's broker got their cut, the listing agent would get between $1K to $2K for their work (or, 0.%5 to 1% of the sales price).
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