Seller's agent fee
I asked the real estate agent who helped us purchase our home to assist with listing it for sale in the next few months. He sent a contract with a 5 1/2 % fee. From my limited 'Googling' of my local area, I know that is high but what realistically should a seller's agent ask for / make from selling our home? For reference, the home is a 4 BR (plus office) and 3 full bath just under 3000 square feet single story with 1/2 acre yard brick fence w'pool located in a nice neighborhood with very low crime and I am hoping to sell for at least 650k.
It's pretty in line depending upon what they are doing. I know our brokerage arm typically charges 5% that is split 2.5%/2.5% with the selling agent (buyer's agent). If we end up with both sides of the transaction, we'll discount that a bit. We also cover the costs of marketing including professional photos, etc. Better agents charge for their time. Cruddy ones tend to give away the store, but getting an agent that really knows real estate investing can save you a lot of headaches just as a bad one can really hurt you. If you aren't paying anything to a buyer's agent, they aren't going to show their clients your home at all, so in the grand scheme of things, 5 1/2% is not super high.
Thank you, Doug. Your response helped to clarify things. The way the contract was written, it looked like he was charging 5 1/2% for HIS work (and an additional 2 1/2% for the buyer as well)
I would clarify with him. Typically the agreement will have 5-6% on the commission and then it's split if there is a buyers agent. This looks like the listing agent would receive 3% and the coop agent would receive 2.5%
All commissions are negotiable. If that seems high to you, negotiate for a lower fee. Make sure you are clear on what an agent is offering in exchange for the fee. Some might pass through expenses for marketing, photos and other things. Others might include a lot of this in their fee.
Get the info and start negotiating.
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Real Estate Agent Nevada (#S.0193295) and CA (#02016625)
- Dustin Allen - REALTOR®
Quote from @Kara Markowski:
I asked the real estate agent who helped us purchase our home to assist with listing it for sale in the next few months. He sent a contract with a 5 1/2 % fee. From my limited 'Googling' of my local area, I know that is high but what realistically should a seller's agent ask for / make from selling our home? For reference, the home is a 4 BR (plus office) and 3 full bath just under 3000 square feet single story with 1/2 acre yard brick fence w'pool located in a nice neighborhood with very low crime and I am hoping to sell for at least 650k.
Let's do the math
Nice home in a nice neighborhood with very low crime, easy sell
$650,000 * 5.5% is $35,750 to list and sell (current offer of service)
$650,000 * 3% is $19,500 to fill out paperwork and put it in the MLS (his take)
Or, since there are 70,000 real estate agents in Arizona
someone will actually do
$650,000 * 3.5% is $22,750 to list and sell
$650,000 * 1% is $6,500 to fill out paperwork and put it in the MLS (his take)
and 2.5% to the buying agent (the buying agent is more important to yousince they are the one with the buyer)
That's a comparison of 3% to your existing friendly agent of $19,500 or 1% to someone equally competent at 1% $6,500 for a difference of $13,000 that stays in your pocket -
Thank you ALL for such competent and thorough replies! I will definitely be acting on this.
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Quote from @Kara Markowski:It’s your Broker/agent who is paying the 2.5% to the buyers broker.
Thank you, Doug. Your response helped to clarify things. The way the contract was written, it looked like he was charging 5 1/2% for HIS work (and an additional 2 1/2% for the buyer as well)
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#3 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
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6% is standard. 3% to the buyer, 3% to the seller. It sounds like he is taking half a percent from one side.
Thank you Wayne and Eliott.
Negotiable as anything else is...
But, here to say depending on how much I will spend marketing will determine somewhere between 5-6% and that's split with the buyer's agent.
Quote from @Eliott Elias:
6% is standard. 3% to the buyer, 3% to the seller. It sounds like he is taking half a percent from one side.
I thank you, Mr. Blake. I am going to ask he drop it to 5% instead of 5 1/2. This is a very good house which should not be a problem to sell. Recently updated bathrooms, clean, nothing to replace, no major issues, landscaping just redone as well. He also recently mentioned about a month ago that inventory was very low for this time of year which to me = seller's market.
I would have at least 3 agents look at the property to give a price range valuation as well as their best fee structure.
@Mike Hern
Totally agree with this post. Guarantee u can find a competent realtor to list for 1% and offer selling agent 2 or 2.5%. Why pay 5 or 6 %? Once it hits the MLS everyone sees it online.
@Kara Markowski it is at a discount. Your listing agent will be taking the reduction and the buyers agent will receive 3%
Thank you Chris and Lucia for your intake. The realtor has not replied to my email asking for a reduction.
@Lucia Rushton careful, rookie. You don't know it's at a discount.
@Kara Markowski
I'm in Vegas and sold a property in 2020 for 500K and my RE agent charged me 6% Yes I thought it was super high but she was 1 of my tenants so I went ahead and gave her my business. What I did to make up for the high % she was charging me I want ahead and over priced my home by 50k sold it for exactly I said I wanted to sell it for and for the RE agent I will never use her again.
Quote from @Kara Markowski:
I asked the real estate agent who helped us purchase our home to assist with listing it for sale in the next few months. He sent a contract with a 5 1/2 % fee. From my limited 'Googling' of my local area, I know that is high but what realistically should a seller's agent ask for / make from selling our home? For reference, the home is a 4 BR (plus office) and 3 full bath just under 3000 square feet single story with 1/2 acre yard brick fence w'pool located in a nice neighborhood with very low crime and I am hoping to sell for at least 650k.
You typically get what you pay for. A discounted commission and an inexperienced agent will not get you the best price and terms. Same as any other contractor you might work with- the lowest bid is probably going to be the most costly.
Quote from @Dan DiFilippo:
@Lucia Rushton careful, rookie. You don't know it's at a discount.
Are you saying that I am a rookie? We have not had the pleasure of meeting Sir.
@Lucia Rushton I have to assume you're a rookie, based on what you've said; yes.
Quote from @Dan DiFilippo:
@Lucia Rushton I have to assume you're a rookie, based on what you've said; yes.
Incorrect, but thank you for trying to help.
@Lucia Rushton then why are you making rookie mistakes?