Are excessive Realtor fees? I&#x27;m the &quot;seller&quot;

2 Reply

Doug SmithPro Member

Lender · Tampa, FL · Member since 2013 · 2k+ posts · 2k+ votes

2y

I think it is if the agent is a good one. I know what a good real estate agents have to go through that a customer does not see. With all this NAR lawsuit business going around, I think people believe that a real estate agent slaps the property on the MLS and that's it. The problem is that the majority do exactly that, but a great professional real estate agent knows what boxes to check and the tricks of the trade. When we've bought property, if the seller is unrepresented or if they have a weak agent...we pretty much fleece them (sorry, I have a duty to our investors and our customers). I even just did a loan for an attorney that was using a weak agent. The contract milestone dates did not line up. That's on the bad agent. Back to your question, $4K is more than fair for a good agent. Good agents aren't indentured servants. They can not be expected to devote time to the process for free.

3 Reply

OP

Member since 2020 · 45 posts · 3 votes

2y

Thank you Christopher,

Yes, I do understand the $2k is out of her control.

It is the $4k flat fee that bothers me most.

It leaves me feeling she has no incentive to sell at the highest price.

Thank you!

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Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

2y

your way off base.. every realtors incentive is to get a sale and get paid.

why would they not ?

small dollar amount deals need higher fee's this is quite common in low value real estate transactions.

people are funny.. complain about RE making 4k but will buy a rehabber house from a wholesaler who puts up no money takes no risk and walks away with 50 to 20k.. and think that is fine..

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4 Reply

Russell BrazilBusiness Member

Moderator

Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes

2y

Her minimum is less than half our minimum.

Honestly when you're dealing with low priced properties, no one wants to sell them because they don't make any money.

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3 Reply

OP

Member since 2020 · 45 posts · 3 votes

2y

Hugh, Wow, That's not the response I expected.

Yes I know the numbers are low, I am inexperienced at Real Estate and asking questions about things that don't make intuitive sense to me. With this contract she could literally sell my place for $1000 and I'd still have to pay her the 4k. But I do also understand that for her work, 4K isn't a big amount.

Yes, Realtors work so hard. I'm glad to pay her 6% of whatever it sells for. She deserves it. The cottage price is just low, that's all.

In spite of that, it sounds like this is a normal agreement, I'll most likely go with it.

Thank you so much,

Thank you Jay, Doug and Russell

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Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

2y

Quote from @Denise Holder:

Hugh, Wow, That's not the response I expected.

Yes I know the numbers are low, I am inexperienced at Real Estate and asking questions about things that don't make intuitive sense to me. With this contract she could literally sell my place for $1000 and I'd still have to pay her the 4k. But I do also understand that for her work, 4K isn't a big amount.

Yes, Realtors work so hard. I'm glad to pay her 6% of whatever it sells for. She deserves it. The cottage price is just low, that's all.

In spite of that, it sounds like this is a normal agreement, I'll most likely go with it.

Thank you so much,

Thank you Jay and Russell

the issue is she DOES NOT SELL it .. YOU sell it.. YOU make the decision on what it sells for NOT your realtor.. if it does not sell for listed price your under no obligation to sell..

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2 Reply

OP

Member since 2020 · 45 posts · 3 votes

2y

Russel, what you said makes a lot of sense, when properties are low in value, it is still a lot of work for the Realtor to sell it.

Interesting Jay, good point.

I wish I had a million dollar property for her to sell. I'd have no problem paying her 6% of that either. It was the concept I mentioned that I just had to learn about. But I see Russell's point.

Thank you

Steve K.

Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes

2y

Yeah $4k minimum is extremely fair IMO. My minimum is $10k (guessing you're in a lower cost of living area). They are going to put in a certain amount of work and their own money on marketing, photos, their overhead costs (agents are independent contractors who pay their own E&O and health insurance, income taxes, MLS dues, NAR dues, continuing ed requirements, etc., etc. all out of their commissions before they get to keep any $), their time, etc. then they also have to split anything they make with their brokerage. $4k would be losing money for me but again it sounds like a lower cost of living area.

1 Reply

OP

Member since 2020 · 45 posts · 3 votes

2y

Hello Steve,

Thank you, That makes a lot of sense. Yes, it is a low cost of living area. It's a great little town, in the mountains, but a lot of poverty.

Thank you Steve

1 Reply

Theresa HarrisPro Member

Member since 2019 · 15k+ posts · 11k+ votes

2y

If it sells at full price ($65K), the difference between 6% and $4K is $100. Do you have the contract from when you bought the place for comparison? Of that $4K, she only gets part of that, she has to pay a portion of that to the company she works for.

John Clark

Member since 2018 · 1k+ posts · 1k+ votes

2y

Quote from @Denise Holder:

Hello,

I am selling a cabin in the Allegheny mountains. My realtor is asking me to sign a Pennsylvania "Listing Contract (Seller Agency Contract). Exclusive Right to Sell Real Estate" contract, which is normal. But the values listed look excessive to me. I'm asking if "you all" feel the fees (especially the brokers fee) seems fair/typical and if not, what would a typical, fair amount be?

Listing price: $65,000 Brokers fee: 6% or $4,000 whichever is higher. $4,000 is $100 higher than 6% of the asking price.

Under "Cooperating with other Brokers" (line 7)

checked boxes are: "Represents Seller (subagent). Broker will pay 2.5% of/from the sale price.

And checked box: "Represents the buyer (buyers agent). 2.5% of/from the sale price. A buyers agent, even if compensated by Broker for Seller, will represent the interests of the buyer.

Under : "Sellers Estimated Costs" she's got me paying $1,925 in fees. ($675 preparation of deed) ($650 transfer tax) ($300 settlement fee) ($300 notary fee)

Also in "Sellers Estimated Costs" "brokers fee" is listed as "$4,000" rather than 6% or $4,000 as if the 4k is just a flat rate.

I feel this gives her no incentive to sell my property at the highest bidder. In this contract she could sell it for practically nothing and I still pay her $4,000 the same amount.

Is this reasonable ?

Thank you,

Denise

Commission split should be 50/50 between the agents. Buyer’s agent needs incentive to bring buyers to the table.

OP

Member since 2020 · 45 posts · 3 votes

2y

Theresa,

Wow, did not know that. Of course she does! Thank you.

Joe Chirdon

Real Estate Agent · Harrisburg, PA · Member since 2016 · 159 posts · 82 votes

2y

Normal and reasonable in my opinion.

Some of the most difficult transactions I've experienced have been on inexpensive properties with a relatively low commission.

1 Reply

OP

Member since 2020 · 45 posts · 3 votes

2y

Thank you Joe

James Mc Ree

Rental Property Investor · Malvern, PA · Member since 2016 · 1k+ posts · 936 votes

2y

The broker is charging 6%/$4,000, but the breakout you mentioned appears to be 2.5% to each side (5% total?). Where is the other 1% + $100 going? My guess is the selling broker which makes this a little imbalanced.

It is the buyer agent you really want to court. You might want to make this 2.5% for the seller agent and 3.5% for the buyer agent. It's not clear who is being paid all of the other fees. For example, $300 for a notary is expensive in my market, but it might be a required expense to the settlement company. Can you do you own notarizing? You don't need a deed prepared if you have your deed from when you bought the property.

Consider interviewing other brokers if you want to find a lower price, but I doubt you will find it in the commission since there isn't much there. You could try selling it yourself and offer 3-4% to the buyer agent to see what you are paying for on the selling side.

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Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

2y

Quote from @James Mc Ree:

The broker is charging 6%/$4,000, but the breakout you mentioned appears to be 2.5% to each side (5% total?). Where is the other 1% + $100 going? My guess is the selling broker which makes this a little imbalanced.

It is the buyer agent you really want to court. You might want to make this 2.5% for the seller agent and 3.5% for the buyer agent. It's not clear who is being paid all of the other fees. For example, $300 for a notary is expensive in my market, but it might be a required expense to the settlement company. Can you do you own notarizing? You don't need a deed prepared if you have your deed from when you bought the property.

Consider interviewing other brokers if you want to find a lower price, but I doubt you will find it in the commission since there isn't much there. You could try selling it yourself and offer 3-4% to the buyer agent to see what you are paying for on the selling s300 is sky high for a notary fee unless its a mobile notary.. and even if it mobile that is about 50% higher than I

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