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I think this is going to change in the industry, and it dang well should. Agents do not deserve such a large chunk in percentage form, given a 100K house versus a 1,000,000 house, it shouldn't be in percentage form. I am seeing alot more now (in NC) a flat fee type of agents, and this is the way it should be, not with percentages. Its almost a crime how much you have to give to comission if you are selling a high end home. A flat fee, say $1,500 or $2,000, is more than enough to cover time/flyers/open houses/etc and still make the agent plenty. I am glad to see flat fee agencies popping up, b/c these are going to continue to become more and more the norm as people catch on to how much of a better option it is!
I think this is going to change in the industry, and it dang well should. Agents do not deserve such a large chunk in percentage form, given a 100K house versus a 1,000,000 house, it shouldn't be in percentage form. I am seeing alot more now (in NC) a flat fee type of agents, and this is the way it should be, not with percentages. Its almost a crime how much you have to give to comission if you are selling a high end home. A flat fee, say $1,500 or $2,000, is more than enough to cover time/flyers/open houses/etc and still make the agent plenty. I am glad to see flat fee agencies popping up, b/c these are going to continue to become more and more the norm as people catch on to how much of a better option it is!
So, are you saying that a $2K commission should be split between the listing and selling agent?
Which if you are, would be $1K each.
And then that would be split with their broker.
At a 60/40 split, would leave $600 for the agent.
And then they have to pay taxes on top of that.
We haven't even gotten to the marketing expenses yet.
In your scenario, the agent would be working for less than minimum wage - if he/she wasn't in the red at the end of each deal.
My current agent charges 6%. Buyers agent gets 3% and he gets 3%. Out of his 3%, he only truly gets a third of that after advertising and broker. 6 is pretty normal around here. So, essentially, it will cost me about 9K for listing my home through him and all I have to do is keep the home in model condition. This is why I refuse to pay for closing costs, especially with the first time home buyer credit. Besides, with my neighborhood (5 military installations), I have a very high chance of getting a buyer with a VA loan which means they don't have to put down a dime to buy a home. And I personally think if you don't have to have any money down and you are in the market to buy a home, you can chuck up at least 3500 for closing costs.
A flat fee, say $1,500 or $2,000, is more than enough to cover time/flyers/open houses/etc and still make the agent plenty.
You have no idea ...
Who's paying the real estate office rent/utilities/etc.? Who's covering the upkeep on the house? Who's arranging for utilities for inspections, etc.? Who's spending hours chasing paperwork to/from the seller and buyer's agent? The MLS board subscriptions? The lock boxes? The phone bills?
If you want to do this and more for $2k or less, go right ahead. I'd be surprised if you manage to make more than a burger flipper ...
Who's paying the real estate office rent/utilities/etc.? Who's covering the upkeep on the house? Who's arranging for utilities for inspections, etc.? Who's spending hours chasing paperwork to/from the seller and buyer's agent? The MLS board subscriptions? The lock boxes? The phone bills?
If you want to do this and more for $2k or less, go right ahead. I'd be surprised if you manage to make more than a burger flipper ...
Most full-time agents gross $25,000/year or less. And yet people whine and complain about having to pay them for the work they do. Just amazing. What's interesting is that experience shows that the ones who do that are the ones who are most likely to be MORE work and to make life harder than it needs to be, because they're high maintenance and have a sense of entitlement.
On topic, if I negotiate a reduced fee in a situation where I have the listing and the buy side, the reduction will be on the buy side.
Thats why you avoid agents all together. Don't let them take a penny of your $, like I have sold my past 2 homes by myself and under a weeks time! Even this year I sold my last one, in 2 days!
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