Rental Property Investor · Member since 2019 · 16 posts · 4 votes
Hi all, getting ready to list our breakeven rental in Oakland, CA, in search for something to BRRRR with cash flow either local or out of state. Sourcing an listing agent to help get the unit ready and wanted to see what's normal vs not from the BP community.
Have a relationship with a listing agent but they're unwilling to budge on the 3% fee on their end. Also expecting us to pay for staging the house. Is this cost expected to come from the seller directly, or considered part of marketing materials and paid for via their 3% rate?
Was targeting being all in on commissions for 5% (2.5% each side). What risks come with paying selling side 3% while buyer side is only 2%?
Real Estate Broker · San Francisco Bay Area, CA · Member since 2015 · 116 posts · 76 votes
5y
@Doug Bielecki Normally commissions in the Bay Area ae 2.5% for each side. I typically only see 3% for properties that are difficult to sell (as an extra incentive for buyers agents), or for properties under $1M (on either side) - and even then, it's fairly uncommon to see 3%. What extra value to go above and beyond is the listing agent providing you for the extra .5%? Buyers agents usually aren't happy seeing 2%, but its not the end of the world. Personally, I would stick to 2.5% for each side.
In the large majority of listings in the Bay Area, staging is paid for by the Seller - it is not considered a marketing expense provided by agents. In my experience, if the agent pays for staging, it is usually staging that you don't want in your property. This is because the agent offering it will likely pick the cheapest company around, where pieces are not thoughtfully curated to highlight your property's selling points. Staging is an investment, and good stagers (usually with interior design backgrounds), are well worth the cost and provide a great ROI.
Realtor · Oakland, CA and a Real Estate Investor with Multi-Family Units and a Self Storage Facility · Member since 2016 · 2k+ posts · 2k+ votes
5y
@Doug Bielecki It is standard practice for the Seller to pay for staging. 5% total is what we do see occasionally, but it's usually 2.5% each side. When Buyer's Agent's see that they will only get 2% for a $1,000,000 property and then another property is going for $900,000 but they will get 2.5% then you will NOT get as many people looking at your property. Simple math says why try to talk a client into a higher priced property that results in $20,000 for my brokerage when I can steer clients to a listing that's $100,000 LESS and it results in $27,000 for my brokerage.
As the (potential) client you need to let that agent know that you know this. If they still won't budge, and at least make it 2.5%/2.5% then you should give serious thought as to if you want them to represent you.