What is best price to pay for a realtor?

Sacramento, California
General Real Estate Investing
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What is best price to pay for a realtor?

Elvin William
Member since 2021 · 42 posts · 33 votes

Hello, I think aug 7th, everything is going to change for buying a home. We are paying for commission for agents instead for sellers paying that. Now the main question is what is a good price for agents? Do we have a minimum or a set rate for a agent? 3% is to much to pay for agents for a house over $500,000. $15,000 to pay a agent for $500,000. There is no fix rate like $5000 for a commission? I know you pay what you get. But now it's getting more expensive to buy a house now. Any feedback back is appreciated. 

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Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
2y

There's about 2.5 million agents in the country. You'll find agents that are very cheap and agents that are very expensive, and everything in between.

And like any other service or product you'll find ones that are really ****** at their job, and ones that are absolute rockstars. Rockstars know their worth, and will usually (not always) be more on the expensive side.  But, you can't determine quality by simply what they charge.....as there are plenty of terrible agents who also charge a lot.

You'll need to determine what value they bring to you personally and do a cost benefit analysis of whether the cost is worth it to you or not.

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  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    2y

    There's about 2.5 million agents in the country. You'll find agents that are very cheap and agents that are very expensive, and everything in between.

    And like any other service or product you'll find ones that are really ****** at their job, and ones that are absolute rockstars. Rockstars know their worth, and will usually (not always) be more on the expensive side.  But, you can't determine quality by simply what they charge.....as there are plenty of terrible agents who also charge a lot.

    You'll need to determine what value they bring to you personally and do a cost benefit analysis of whether the cost is worth it to you or not.

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  • Elvin William
    OP
    Member since 2021 · 42 posts · 33 votes
    2y

    Thanks for the feedback. There are few realtor I talked to say, we charge this amount and said, I wont get a discount on houses we look at. So the bottom line is from this realtor is, don't waste my time. Bid the house what ever the house price is at. Don't under bid. If you do that, your wasting my time. I was really surprised about that. The realtor wants 3% of house price.

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  • Josh YoungPro Member
    Rental Property Investor / REALTOR® / Property Manager · Gilbert, AZ · Member since 2023 · 385 posts · 421 votes
    2y

    @Elvin William 

    I think you will find that very little will change and the Seller will still pay the commission for both agents in the vast majority of transactions. Listing Agents will just not be allowed to advertise the co-broke that they are offering in the MLS, but they will still offer it most of the time, it just won't be advertised in the MLS. However, when they don't offer it or they offer something that is less than the Buyer's agent charges then the Buyer can just write in the offer that the Seller is to pay "x commission" to the buyer's agent. I have already seen the new forms/addendums that will be used here in Arizona, the common one for this will be the Seller Compensation Addendum.

    The one thing that might happen in your discount buyer agent scenario is you might get a buyers agent who agrees to a lower commission and then the listing agent is offering a co-broke that is higher than he agreed to, well now that buyers agent will only be able to get paid the lower amount he agreed to and the listing agent will keep the remainder, so listing agents could end up getting paid more.

    As far as your question on what to pay an agent, I view it similarly to hiring an attorney, there are discount attorney's and they might be okay for some people in some circumstances, or if you know the proper procedures and deadlines then maybe you do it on your own without an attorney. Or just hire the best and have the other side pay their fees for you.

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  • Elvin William
    OP
    Member since 2021 · 42 posts · 33 votes
    2y
    Quote from @Josh Young:

    @Elvin William 

    I think you will find that very little will change and the Seller will still pay the commission for both agents in the vast majority of transactions. Listing Agents will just not be allowed to advertise the co-broke that they are offering in the MLS, but they will still offer it most of the time, it just won't be advertised in the MLS. However, when they don't offer it or they offer something that is less than the Buyer's agent charges then the Buyer can just write in the offer that the Seller is to pay "x commission" to the buyer's agent. I have already seen the new forms/addendums that will be used here in Arizona, the common one for this will be the Seller Compensation Addendum.

    The one thing that might happen in your discount buyer agent scenario is you might get a buyers agent who agrees to a lower commission and then the listing agent is offering a co-broke that is higher than he agreed to, well now that buyers agent will only be able to get paid the lower amount he agreed to and the listing agent will keep the remainder, so listing agents could end up getting paid more.

    As far as your question on what to pay an agent, I view it similarly to hiring an attorney, there are discount attorney's and they might be okay for some people in some circumstances, or if you know the proper procedures and deadlines then maybe you do it on your own without an attorney. Or just hire the best and have the other side pay their fees for you.

     Thanks for the update. I will keep that in mind. I mean, if I'm paying that much money, I'm hoping for deal on a house. I'm going to make you work for that commission.

    0Reply
  • Mark Pedroza
    Real Estate Agent · Sacramento/Placer ~ San Francisco Bay Area counties · Member since 2012 · 1k+ posts · 743 votes
    2y
    Quote from @Elvin William:

    Hello, I think aug 7th, everything is going to change for buying a home. We are paying for commission for agents instead for sellers paying that. Now the main question is what is a good price for agents? Do we have a minimum or a set rate for a agent? 3% is to much to pay for agents for a house over $500,000. $15,000 to pay a agent for $500,000. There is no fix rate like $5000 for a commission? I know you pay what you get. But now it's getting more expensive to buy a house now. Any feedback back is appreciated. 


     Wether your looking for home in Granite Bay (Placer County) in the unincorporated town of Elverta (Sacramento County) or the unincorporated town of Pleasant Grove (Sutter County) all commissions are still negotiable....

    0Reply
  • Elvin William
    OP
    Member since 2021 · 42 posts · 33 votes
    2y

    Here is another question. What if my agent gets double dip. Get paid by me and by seller. Is there any way I can find out how much agent gets paid?

    0Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    2y
    Quote from @Elvin William:

    Here is another question. What if my agent gets double dip. Get paid by me and by seller. Is there any way I can find out how much agent gets paid?

    Your written buyer agency agreement will detail how much your agent is paid, and from where that payment will be sought. An agent if they are a Realtor, and thus subject to the NAR settlement, can not receive more money than is detailed in the buyer agency agreement.
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  • Jonathan GreeneBusiness Member
    Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
    2y

    You aren't going to have success finding the right agent because you are taking something that is outside of your control (the new settlement) and already trying to figure out how to get the best service for less. It doesn't work like that. Those of us with a long track record are completely unphased by the settlement and changes and will likely be charging more, not less.

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  • Alecia LovelessPro Member
    Member since 2019 · 3k+ posts · 2k+ votes
    2y

    @Elvin William it shouldn’t matter. They’ve been getting 6% in most of the country and if they’re doing their job they’re still worth 6%.

    0Reply
  • Karen MargraveBusiness Member
    Moderator
    Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
    2y

    Commissions have always been negotiable in CA. Most buyers don't have the money to come in with to pay down payments, plus commissions in this market, so I don't expect a lot to change. Buyers usually don't understand all that goes in to selling real estate. The number of listings shown before an offer is made. The time spent meeting pest inspectors, home inspectors, roof inspectors, HVAC guys, septic inspections, any contractors for work that needs done, photographers (paid by selling agent) signs and other marketing, Omissions and Errors insurance, MLS fees, NAR/CAR fees, car insurance, gas, only to have a deal fall apart over something. Payments to transaction coordinators, etc.

    Then the contracts, disclosures, etc. coming in around 100 pages. Yep.... the life of an agent is so dang easy, they get paid so much for doing nothing! LOL 

    1Reply
  • Ranjit Sandhu
    Real Estate Broker · Rocklin, CA · Member since 2020 · 221 posts · 83 votes
    2y

    When buyers especially Bay Area buyers ask me if I will get them part of commission I tell them find someone who does that practice and I lost few of those Bay Area buyers. I guess this might be a common practice in Bay Area but in my area Roseville/Rocklin. 

    It's starting on 8/17 but if you buy before most likely seller is paying the commission. As many of already mentioned that commission is negotiable. I'm a real estate broker I work with my clients on their needs and what is best for them. All the best!!!

    0Reply
  • Noah Loveless
    Realtor · Anchorage, AK · Member since 2019 · 20 posts · 11 votes
    2y
    Quote from @Elvin William:

    Here is another question. What if my agent gets double dip. Get paid by me and by seller. Is there any way I can find out how much agent gets paid?


     Hi Elvin,

    Just curious why it matters to you if the agent double tips (i.e Duel agency)? If said agent performs and double dipping (i.e Duel agency) is legal in his/her state, shouldn't they be compensated for there efforts?

    0Reply
  • Elvin William
    OP
    Member since 2021 · 42 posts · 33 votes
    2y
    Quote from @Noah Loveless:
    Quote from @Elvin William:

    Here is another question. What if my agent gets double dip. Get paid by me and by seller. Is there any way I can find out how much agent gets paid?

     Hi Elvin,

    Just curious why it matters to you if the agent double tips (i.e Duel agency)? If said agent performs and double dipping (i.e Duel agency) is legal in his/her state, shouldn't they be compensated for there efforts?


     The reason why it matters for me is this, if the seller paid 6% commission without a buyer knowing, the buyer will pay 3% commission on top of the 3% agent gets from sellers. That will be 6% total for commission. If I know if the seller paid 3% commission, I can save 3% on my side. So it will be a good idea to know what is the agent is making out of the deal. That's fair. If not, that's double dipping. 

    0Reply
  • Matthew Paul
    Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
    2y

    I recently sold my house FSBO . And some potential buyers brought a buyers agent and submitted offers . They included their fee at 2.5% a couple were at 3% . So i was now negotiating with 2 people over money , the buyer , and the agent . I told the agents , that they were hired by the buyer , they are to be paid by the buyer . If they want their fee to be from the proceeds of the sale , get rid of the % and write down a flat number . Now you can add that number to the sale price of the house or ask your buyer to cut you a check , you work for them , not me .

    I got push back from agents .  Things like the house wont appraise for that much then , and my buyers are at the top of their budget , thats not how its done .  I simply said , then thats between you and your buyer , do you want to tank the deal for them ? 

    I sold for over asking , I paid zero in commissions , the buyers agent was paid directly by the buyers , How much ?  I dont know , and I dont care . 

    ( Its a sellers market in my area with very low inventory in my price range )

    2Reply
  • Karen MargraveBusiness Member
    Moderator
    Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
    2y
    Quote from @Elvin William:
    Quote from @Noah Loveless:
    Quote from @Elvin William:

    Here is another question. What if my agent gets double dip. Get paid by me and by seller. Is there any way I can find out how much agent gets paid?

     Hi Elvin,

    Just curious why it matters to you if the agent double tips (i.e Duel agency)? If said agent performs and double dipping (i.e Duel agency) is legal in his/her state, shouldn't they be compensated for there efforts?


     The reason why it matters for me is this, if the seller paid 6% commission without a buyer knowing, the buyer will pay 3% commission on top of the 3% agent gets from sellers. That will be 6% total for commission. If I know if the seller paid 3% commission, I can save 3% on my side. So it will be a good idea to know what is the agent is making out of the deal. That's fair. If not, that's double dipping. 

    First and simplest, ask your agent to please give you something in writing showing what the total amount of commissions being paid will be, not just what they are asking you to pay. The person that responded above misunderstood the question, thinking you were asking about if the agent was acting for both the buying and selling side, which makes them a dual agent. However; that wasn't your question. But, since it was referenced, an agent would need to disclose that to the client. 

    Either way, agents must disclose their commissions. What your question was referencing is if your agent negotiates with you to pay the buyers commission, how would you know if they were also being paid by the seller? Agents must disclose to you if they are being paid by the seller. Don't be afraid to ask them. Agents are not allowed to make "secret profits". All of the DISCLOSURES signed by buyers and sellers are to protect them, and disclose information. Buyers and Sellers deserve to know all the facts related to their transaction, not just what an agent decides to give them. Tell your agent that you would like to see, in writing, a breakdown of any and all commissions being paid so that you have a full understanding. 

    Also, Commissions are a shown on the estimated closing statement from the escrow company. 

    Never be afraid to ask questions of your agent. You have every right to be an informed consumer, and know what you are paying for. Never sign anything or agree to anything you do not fully understand. 


    1Reply
  • Lynn McGeein
    Real Estate Agent · Virginia Beach, VA · Member since 2012 · 2k+ posts · 1k+ votes
    2y

    @Elvin William my buyer broker fee has always been negotiable. For example, if you’re a first-time buyer wanting to see 3 different cities, low down payment Ioan, no real idea of what you’re looking for, and need to lose 3+ offers before you’ll listen to my professional opinion on offer price & terms, you’re going to be paying me a lot more than an informed cash buyer looking in a specific neighborhood that listens to my advice so we quickly win the bidding wars we still have with lack of inventory in desirable neighborhoods. I’ve never thought commission should be a fixed rate, and I’ve never worked for brokerages that weren’t flexible, except my first one where I learned I never wanted to do that again.

    0Reply
  • Karolina Powell
    Member since 2021 · 107 posts · 82 votes
    2y

    I have an agreement with my realtor that she earns at least $2500 per deal closed (I often buy sub100k houses). If the seller offers at least that much or more in commissions then she gets what the seller is offering. If the seller isn't offering commission or the amount is less than the $2500, then I make up the difference.

    2Reply
  • Ben HowardPro Member
    Real Estate Agent · El Dorado Hills, CA · Member since 2017 · 160 posts · 67 votes
    2y
    Quote from @Josh Young:

    @Elvin William 

    I think you will find that very little will change and the Seller will still pay the commission for both agents in the vast majority of transactions. Listing Agents will just not be allowed to advertise the co-broke that they are offering in the MLS, but they will still offer it most of the time, it just won't be advertised in the MLS. However, when they don't offer it or they offer something that is less than the Buyer's agent charges then the Buyer can just write in the offer that the Seller is to pay "x commission" to the buyer's agent. I have already seen the new forms/addendums that will be used here in Arizona, the common one for this will be the Seller Compensation Addendum.

    The one thing that might happen in your discount buyer agent scenario is you might get a buyers agent who agrees to a lower commission and then the listing agent is offering a co-broke that is higher than he agreed to, well now that buyers agent will only be able to get paid the lower amount he agreed to and the listing agent will keep the remainder, so listing agents could end up getting paid more.

    As far as your question on what to pay an agent, I view it similarly to hiring an attorney, there are discount attorney's and they might be okay for some people in some circumstances, or if you know the proper procedures and deadlines then maybe you do it on your own without an attorney. Or just hire the best and have the other side pay their fees for you.

    I agree with your reply Josh, except: "The one thing that might happen in your discount buyer agent scenario is you might get a buyers agent who agrees to a lower commission and then
    the listing agent is offering a co-broke that is higher than he agreed
    to, well now that buyers agent will only be able to get paid the lower
    amount he agreed to and the listing agent will keep the remainder, so
    listing agents could end up getting paid more."

    Except that in California our Buyer Representation and Broker Compensation Agreement section 4. D. (2) states "if third-party payments received exceed Buyer's obligation, the excess amount shall be paid to Broker, or credited to Buyer, or __" with the buyer's agent selecting if excess above the agreed payment amount shall go to the broker, buyer, or someone else. meaning that the buyer could receive the excess if the commission offered is higher than that agreed to between the buyer and their agent.








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  • Scott ScovilleBusiness Member
    Real Estate Agent · Sacramento, CA · Member since 2019 · 502 posts · 276 votes
    2y
    Quote from @Elvin William:

    Hello, I think aug 7th, everything is going to change for buying a home. We are paying for commission for agents instead for sellers paying that. Now the main question is what is a good price for agents? Do we have a minimum or a set rate for a agent? 3% is to much to pay for agents for a house over $500,000. $15,000 to pay a agent for $500,000. There is no fix rate like $5000 for a commission? I know you pay what you get. But now it's getting more expensive to buy a house now. Any feedback back is appreciated. 


    Not much will change. The top agents are still going to be doing the majority of transactions. Sellers are still paying commissions to buyer and sellers agents. You may see more negotiating on percentage, which was always allowed before. I guess you could say theres more attention paid to it now. Ultimately, you get what you pay for. Hire a good agent that will bring value!

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