How much should I pay in Real Estate commision? (flat fee, for sale) - Maryland (MD) - City-Data Forum

DLK · 05-18-2008, 08:39 PM

We're within days of having our home listed and am having an agent come by to talk with. I've asked a few questions in email regarding what to expect in the ways of potential buyers, contract, commission fees etc. His response was that we'd go over everything when he comes by which left me with the feeling that I wouldn't have an option or opportunity to shop around real estate agents.

I would like to know what questions I should have foremost on my list for this guy and what I should expect to pay for commission. I read on his web page that if Im unhappy, he has an easy exit agreement to walk away at any time.

Any help would be appreciated.

* On the side note...good googlymoo it was a lot of work getting this house ready!!! I read so much about what type of work it is moving but have yet to see anyone discuss how much work it is preparing to list!!

trickymost · 05-19-2008, 06:18 AM

You should talk to Redfin (Online Real Estate - Homes for Sale and Experienced Real Estate Agents | Redfin). They charge a flat fee commission, and having dealt with them and also with traditional realtors in the past, find that you get better service with less cost.

Gabrielle · 05-19-2008, 06:22 AM

I agree, it is a pain in the ... to get the house ready to list! Between painting and cleaning and sorting and putting stuff in storage it seems like it never ends. I think the thing I found hardest when we sold our house was to keep it ready for showings at a moment's notice. Try doing that with a toddler in the house!

Our agent requested 6% commission and we told her that we wanted to pay 5% - she agreed and we felt very comfortable paying her that given how hard she worked for us in a slow housing market. I don't know how people who use "Assist to Sell" or try to sell their houses on their own are doing in this market, but I wouldn't even dream of selling a house without a realtor.

marcoulter · 05-19-2008, 06:31 AM

DLK do not feel that you are obligated to take what the real estate agent asks in terms of commission. Every commission is negotiable. Ask him how much advertising he will do, will he schedule regular "review" meetings on a regular basis (example every 3 weeks). It is important that you stay in touch with the market, how much show traffic you are getting, and if any new listings or sales transpired within the last weeks. Make sure you get feeback from every buyer who sees your property. Real estate agents who do not communicate with their sellers regularly -- bad news.

TeamBenya · 05-19-2008, 04:25 PM

Commissions are negotiable, don't be afraid to tell him you don't want to pay more than x%. Put the ball in his court, and don't be afraid to hold your ground. The important thing is to make sure that you are comfortable talking with him, and that you're confident he's the best guy (or girl) to get the job done.

If you like the agent, tell them that you don't think it makes sense to spend 6% on the commission, and see what they say. Also, be sure to watch how the commission is being split. It only makes sense to ensure that the buyers agent is being treated fairly with commission as well, for multiple reasons.

manofsteel084 · 05-20-2008, 11:08 AM

We have our home listed in MD and we are paying 5% commission. Realize, though, that this also affects the BUYERS agents and they could, and will, steer their clients to higher commissioning properties. They will make more money!

TeamBenya · 05-20-2008, 12:00 PM

Quote:

Originally Posted by manofsteel084

We have our home listed in MD and we are paying 5% commission. Realize, though, that this also affects the BUYERS agents and they could, and will, steer their clients to higher commissioning properties. They will make more money!

This is a definite possibility. I don't think it's wise to offer less than 3% to the buyers agent, because there are agents out there commission shopping. I don't agree with it, it shouldn't happen, but it's a risk. Some people are even offering over 3% just to get the agents in the door!

I personally am wary of commissions for buyers agents sitting above 3-3.5% for homes. I feel like the house must be overpriced if they feel the need to offer that much extra incentive. Some agents see it as a better paycheck. I suppose it depends on the agent that's showing your home.

Marylandsailor · 05-21-2008, 04:52 PM

My house is for sale now and the agent is charging 5%. The market is real slow right now so I think that a half a percent split would make no difference. ANY commission is better than none, so if there's a buyer who likes a particular house, I think both agents would want to close the deal .

TeamBenya · 05-21-2008, 06:52 PM

Quote:

Originally Posted by Marylandsailor

My house is for sale now and the agent is charging 5%. The market is real slow right now so I think that a half a percent split would make no difference. ANY commission is better than none, so if there's a buyer who likes a particular house, I think both agents would want to close the deal .

Think about it like this: In an average market (which this is NOT), your average agent closes 2-3 deals a year. Now sales are down by at least half, if not more, so let's say that the average agent is only closing 2 deals a year.

If that agent has 30-50 homes they could show to a given client, what's to stop them from steering clients to homes where they make 16%-18% more money? Ethics. Let's hope all agents showing homes are ethical, and place their moral judgement above putting food on the table....

I'm not say that all agents do this, but it IS a risk, unfortunately. If you're trying to sell in a down market, why stack the deck against yourself any more than necessary?

The fact is, when I list a home I personally don't care how much the other realtor makes. However, the other realtor DOES care, and you need to weigh that when it comes to deciding how you and your agent are splitting a commission with a co-operating agent. It's my job to inform my clients of the risk (possibly less showings?) and the reward (possibly a little more money in the sellers pocket).

Marylandsailor · 05-21-2008, 07:21 PM

Point well taken. I would also think, that it would be in the buyers AND the buyers agent's best interest to direct the buyer to the best home that fits their needs. Isn't it better to make a sale rather than direct a buyer away from a home to one that would give the agent a slightly better commission? After all, the agent's commission gets split by the company they work for too. So what are we talking here, a couple hundred dollars? Maybe the 2 or 3 sales a year that the average agent makes could be 4 or 5 sales a year if the interests of what the buyer wanted came first?