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I think one of the most misunderstood elements about a real estate commission is just how much an individual agent is paid after the close of a deal.
When people hear 6% of the sales price they often fail to remember that on most instances that is split in half (3% listing firm/3% buyer's agent). The buyers agent, for instance, then has a percentage taken from the 3% (anywhere from 50-80+ percent). Then you should pay taxes on that. So, lets do a little math here
200,000 x 6% = 12000 split in half is 6000.00
lets say the firm is paying this person 65% of that 6000.00= 3900.00 x 30% taxes=1170
3900-1170= 2730.00
Most agents work on strict commission, so if you only do one sale in two months--guess what? that is 1365 per month. With a family, a mortgage and such that is not much money.
I know, you looked in the sunday paper and saw the Top producer at 20 million--well just remember that doesn't happen for every agent--as a matter of fact out of 800 agents in a county in western north carolina--only about 30% of them had made any money in the first three months of this year.
I guess you can do a hundred angles with this--but personally, I think one bad agent, or one bad seller (and it is usually a seller that pays the 6%) and suddenly "agents are getting paid a lot of money to do nothing" or "that guy was a terrible agent and I will not pay anyone else that kind of money". Just remember the kind of liability an agent has upon them. There are 1400 complaints a year made to the NC Real Estate Commission and guess what some agents get sued and rightfully so.
If sellers would be a bit more discriminating about who they hire to represent them, and look into the background of a firm, ask around if need be, then many problems wouldn't occur.
The trend is usually to a big firm, with many many agents because logic says that will get you max exposure. Well, a real estate friend of mine works for a wonderful small firm and he called a huge firm to ask about a listing, because the listing agent was never to be found, and they DIDN'T KNOW ANYTHING ABOUT THAT LISTING! WOW! If I am that seller, I am not happy and rightfully so. But they went to that firm because logic says...........
I agree sellers should be a bit more discriminating but at the same time they do not nickname realtors, sharks, wolves etc. for nothing. Some are bad eggs just like anything else, and that alone can get hairy for a seller to sort thru all the junk. But!! again, if it takes longer to search and research for a Realtor with high marks it is well worth it in my mind.
We were so disgusted with our realtor we just took our home OFF the market, we are thinking of listing with another agent who's commission is 4.5%.
Realtors: Do you REALLY get what you pay for???
DH says, as long as it's on the MLS that's all that's needed
I completely disagree based on the last realtor we had.
Sorry to drag up an older thread.
Ouch.
Sorry for your trouble. I'm curious how your agent failed you.
Gotta tell you though, I've never seen the MLS draw up an offer, crawl under the house or into the attic with the home inspector, or onto the roof with a camera, or pull a deed at the Recorder's office, or run to the client's home for a signature at 10:00 PM.
And I look at the Withdrawn and Expired listings daily and I see all manner of listings Withdrawn and Expired, and to do that, they are all on the MLS.
I think there is reasonable ground between only considering cheap price or buying into all the hype agents shovel to consumers to create unrealistic expectations just to secure a listing or Buyer agency.
There is no commission level that empowers an agent to walk on water.
"Do you really get what you pay for?"
Who knows. I just know you seldom get something of value that you haven't paid for.
I have never said, "I'm not making enough money on this deal to do *.*"
But I've heard it from the "other side."
Here on Long Island the better firms have dropped their commission to 4% so as to not be greedy. Most homes sell around $500k so there's still plenty of cash to be had. By doing so it allowed me to avoid the unpleasantries of negotiating a reduced rate.
I believe that almost everything is up for negotiations, particularly true in real estate. It doesn't hurt to try just so long as you're not insulting.
Lastly, our Realtor on Long Island has consistently proven herself as a valuable resource (and subsequently friend). She has helped us sell two homes and was shrewd in determining listing price and negotiations. She's excellent in working the communication lines to get feedback and gauge buyer interest. She worked with us to prepare our current home for market, has been funneling free packing supplies to us in anticipation of our move and has even stepped up to help us in the buying process in Raleigh (great sounding board). I suppose like in any other profession there are the good, the bad and the ugly. If you're working with any service person who isn't earning their fee, make a change or complain.
Why would the buyeragent get paid out of the sellers agents commission, shouldn't the buyer be paying their own agent?
Kimberly,
It can be done that way. In the future, it may be typical for a Buyer's Agent to work on a retainer and fee schedule, with the bulk of the payment contingent on closing. The current system is a little simpler, IMO.
Commonly, when using North Carolina Realtor Standard Forms, the Property Owner and the Listing Agent have an agreement to market the home.
They agree on the amount of the commission due the Listing Agent for bringing a Buyer.
They also agree on how much of that commission the Listing Agent will offer to other Agents to bring their Buyers. It's all up front, in writing, in a standard listing contract. That commission sharing is one of the foundations of the Realtors' MLS, a system that garners Sellers more exposure for their properties.
One thing that makes me laugh, I noticed on my last trip to Raleigh that my realtor is more apt to point out faults of the home that are listed with a discount company. While he's very honest with all houses I have been looking at I thought he may have been particularly disparing with those in particular...
I am a Realtor in the State of NJ and the AGency that I work with allows me to set the commission, for a homes sale,that I charge which is spilt 4 ways.
We are realtors here in So Cal and YOU GET WHAT YOU PAY FOR.
When homes are selling in days for an average price of over $700k (as they were in So Cal a few years ago) there is no way any real estate agent's service is worth 6%. No way.
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Friend or foe?
