What is the right level of real estate commission to pay on a multimillion dollar property?
Posted on November 22nd, 2009 in Renting & Real Estate | 6 Comments »
Mr. Stone asked:
I'm selling a house and I have conflicting information on what the real estate commission should be. It varies from 4-6% depending on who you ask.
Baltimore County Real Estate
I'm selling a house and I have conflicting information on what the real estate commission should be. It varies from 4-6% depending on who you ask.
Baltimore County Real Estate
6 Responses
Colorado Real Estate
6% for listing the property. Then, it could be split between you and the buyer (you paying 3% to your agent, the buyer paying 3% to theirs), and probably no one will do it for less because your agent should spend a lot of time and $$$$ marketing the property.
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Commissions are negotiable. Some agencies in Florida were trying to get 7% last time I checked. Start negotiating if you are in that position. Get 3 agents to compete for your business if that is what you seek.
Not really what I would do unless it was a very hot sellers market.
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I like the advice offered by trade_info….get the agents to quote for your business. But also keep in mind that you want to offer enough to motivate YOUR agent and the buyer’s agent, esp. if you are looking for a quick sale. Offer 5% to be split 50/50 or to motivate YOUR agent, 2.5% to be paid on the first $100,000 and 2% on the balance. That way the listing agency is still mtoivated to list your deal.
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Traditionally, it was 6%, to be split between both agents and if the listing agent brought in a buyer, discounted down to 5%. Currently, most practice a 5% split and dual agents discount to 4%. Nothing is set in stone, thus the confusion. You should price this expense yourself. How’s the demand in your area? Asking price too high? Competing sellers? Your desperation? A realtor’s marketing expenses shouldn’t even be considered compared to the tens of thousands of dollar’s you’re obligating to. A home will sell itself once that right buyer sees it. Flyer’s benefit the agent’s exposure more than market your home. If conditions are fair, I would suggest 4%, 2.5% to selling agent (represents buyer) and 1.5% to listing agent, w/ no discount if he/she procures buyer. Don’t lower the incentive to agents who are shopping homes for eager buyers, they make take offense to your low commission offer and skip your home altogether.
FSBOS
Commissions have become a huge controversy recently. With the huge increases in the market, the Real Estate agent has been penalized by the overly greedy Seller. Property values have gone up, so most Sellers have had a huge earning on their investment. With that in mind, this has become the biggest investment for most people. Yet they want a bargain for their investment. Bottom line, if the Agent you are thinking of hiring can’t negotiate their own commission, there is no way they will be able to negotiate the best price, or conditions, for the sale of your home. The Agent who is willing to reduce their commission is doing it out desperation more than anything else. In 14 years of business I have personally let go of a good number of listings not willing to pay me what I charge…and a good number of those Sellers have given me a call after their home does not sell, or they run into problems. Ultimately, it’s your choice what kind of service you want. There is no set amount, but I am sure you worked hard for your multi-million dollar property…the Agent will probably work just as hard to help you sell it.
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What instill2001 said is completely true. You often get what you pay for. Get a better agent and sell for more money. Ask you friends for a referral to a good agent and do some research or go to
It’s very easy for an agent to cut their commission. However, where’s the value there? The real question for your agent should be “how are you going to market my home?”
Your full service agent can get you more money than you want to save. It’s like, “stepping on a quarter to pick up a penny”, in my opinion.
I’m also a Realtor.