Is this agent commission ok/normal?

Question

Kevin Griesser · Answer

I am a licensed real estate broker as well as an investor based just outside Louisville in KY.  Commissions are 100% negotiable between seller and broker.  Laws prohibit the establishment of a "standard industry rate" in the truest sense of the word - it is considered price fixing.  That said, interview multiple brokers and go with the one who clicks with you that you feel provides the best value.  I am unaware of any restrictions on how high or low a commission rate can be.  It may be different in Indiana, but I would suggest you get multiple "bids" from brokers interested in helping you sell.

If you feel that this broker is a good match for your needs and that having someone maintain the property while it is listed is worth paying 8% of the sale price, then go for it.  If you feel that 8% is too high, shop around.

Shawn Holsapple · Answer

Yes, that's on the high side.  We see 6%-7% as an average and it's always negotiable.  With that said, however, if it's too low - the selling agents won't show it.

I personally like to setup a lower rate 6% or under and then have the listing agent state a $1000-$1500 selling agent bonus if closed by xxxx date.  This seems to motivate the selling agents to show your property ASAP.

Have you thought about keeping it for cash flow?  I'd recommend a lease option.

Joel Owens · Answer

How much land does this property have??

Commission is negotiable when listing a property.

There is no set number. When evaluating the property to list a broker/agent is supposed to look at what makes up the most value for an asset.

So for instance a dumpy house that sits on 10 acres. Are you selling the land or the house and what makes up most of the value. In that case the land is what is being sold and that can go for 10% commission. The house is usually secondary in that instance.

If an area which I have seen it is 7% commission because house prices are lower ( in the 100's ) then 8% is not that out of the norm.

If this person is very good what you might want to do is set a tiered structure based on closed sale price.

If you want to list at 170k have it 8% for 167k to 170k, 7% for 162k to 166k, 6% for 157k to 161k etc. Keep buyers agent commission to drop no lower than 3%. This drop method will make listing broker / agent tell you the true price they think it will sell at. Given the fact you will be far away you need a broker/agent who will handle services with the property. If this person is that good they are worth the money.

No legal advice.

Adam Gerig · Answer

Our market here is typically 6%.  3% buyer broker & 3% selling broker.  Now it's always a point of negotiation I've seen where they throw in extras for buyer's agent just to get the thing sold, but I'd concur that I think 8% is really high(and that's coming from a realtor!!)

Sheri Ulm · Answer

In the area of Ohio I'm buying in allot of homes are 20k and under and I've noticed that agents don't do a percentage at all but rather a fixed fee. At 3% the agent on the house I'm buying now would only make $150 but she is getting $1000 and I believe the other agent is getting the same. Here in CA the norm is 6% but that is always negotiable. During the boom a few years back there were a lot of discount brokers offering reduced fees and sometimes sliding scale... Pay this get a,b & c... Pay more get a,b,c,d.e etc and I knew one agent who always told their sellers 7% so they could offer 3.5 to the buyers agent while 'earning' an extra .5 themselves for selling it so fast.

Rachel Campbell · Answer

It is becoming standard here (Ohio) to do 7%. Average home prices are pretty affordable however, I never thought about that being a factor.

Franklin Romine · Answer

5-6%

James Wise · Answer

Need a few more details.

1. List price.

2. Yard size.

3. How many grass cuts/month

Jerry Padilla · Answer

Here is 6-7% on average. Like everyone else has said it is negotiable. It can be up to 10% sometimes for houses priced under like $30,000 or a flat fee.

Derrick R. · Answer

We talked about this but decided it might not be best being that we will be living all over the place (I'm in the Air Force). I do eventually want to get into rentals of some type, but for this property we want to go ahead and collect the equity we have in it.

Thanks to everyone else for the replies! It's much appreciated!

Is this agent commission ok/normal?

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