Home Buying in 17402>Question Details

Dave.christm…, Home Buyer in York, PA

Realtor commission rates. What are they?

Asked by Dave.christmas1, York, PA Thu Feb 28, 2013

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Rob Weil’s answer
A negotiable percentage of the sales price, deducted from proceeds at the time of sale. Essentially, the seller pays this. They tend to be in the mid 1 digits. (4-6%) Depends on the broker, the needs of the client, and the prevailing rates of the market.
0 votes Thank Flag Link Thu Feb 28, 2013
An excellent question that you'll find is not so easy to answer, as "price fixing" is illegal and setting a "standard" commission rate would be price fixing. To add an important note to Robert's answer..the percentage is negotiable for the seller, who is the one entering into an agreement with his/her listing agent. That's why you'll hear people accurately stating that the seller pays the commissions. The buyer cannot negotiate the commission, because it's already been negotiated before the house was listed.
The buyer can ask their buyer's agent to donate a portion of their share of the commission to the buyer at closing to reduce the cost of the purchase, but that's just like asking the banker to give you some of his salary to use his bank. I wrote a blog on asking for a portion of the buyer's commission that explains why that isn't really fair, and should be avoided. You can read it at http://www.trulia.com/blog/jim_olive/2013/01/understanding_h…
Some people think that commissions are huge sums of money that exceed the value an agent brings to the process, when in fact most agents are not making a huge annual income, since that could well be their only sale of the year and the sum total of their annual income. It's important to understand things before passing judgement and taking action. As a consumer, before I became a Realtor, I always appreciated agents and would never have ventured into anything as big as a real estate transaction without the benefit of their knowledge and experience.
1 vote Thank Flag Link Thu Feb 28, 2013
Realtors charage the home seller a commission . This is a percentage of the home sale. The Selling agent will charge a rate that is ageed upon by seller and agent. Then once the home is undercontract and goes to settlement the selling agent will then at the closing table be paid.
They must split the commission with the buyers agent. So lets say I am selling your house . I charge you 6% commission . Your house sold for for $150,000 . At the settlement table out of your proceeds comes 6 % >> 9000.00 . Selling side keeps 1/2 >>Buyers side keeps 1/2
Not all profit for us though . We now need to pay our taxes, we are on a company split, have a franise tax to pay and end up with what is left.
0 votes Thank Flag Link Sun Mar 17, 2013
Agents, PLEASE read Jim Olive's response below. Real Estate 101.
0 votes Thank Flag Link Mon Mar 4, 2013
For listing a home to sell? The average York agent will charge 6% >>they will need to split this with the buyers agent . You can find discounted Real Estate agents for sure. But like everything else you get what you pay for.
Best to interview some agents asking them about there plans to get your home sold .And sold in a limited amount of time. Find out about there marketing. Like where do they market your home?
Does you NO GOOD to get cheaper rate if you do not have any showings and just sit on the market.This then gives the impression that there is something wrong with your home.
0 votes Thank Flag Link Mon Mar 4, 2013
The answer is they vary and are fully negotiable. Unfortunately there are some real estate agents who use "scare tactics" to discredit anyone who tries to win business by "undercutting" others on pricing. Just because an agent is charging more - doesn't mean they are going to do a more effective job of marketing your property. Some agents work "harder and not smarter", then pass their less effective, but more expensive, marketing costs onto the consumer in the form of a higher commission. Interview a few agents, and ask them the specifics of their marketing strategy. Ask them "why" they are using specific marketing techniques, and also ask for hard data showing why the specific technique is effective in today's market.

The fact is - there are a lot of agents that get a listing contract, drop it off to their office - and let an assistant slap it onto the MLS and various websites and sit back waiting for phone calls. They often don't have hard data to back up exactly what sites they are on, and why. A marketing plan should be custom, and tailored specifically to you property, and the type of buyers it will attract. Your agent should have an answer for every aspect of their marketing program - and why it's included in your plan. Spending hundreds of dollars in newspaper ads, and postcards that are sent out to people who 99.9% of which aren't in the market to buy a home - simply doesn't work today. Your agent should know "how" buyers search for homes today, and be able to explain everything to you in detail.

As far as the commission goes - everything is negotiable.
0 votes Thank Flag Link Thu Feb 28, 2013
They vary from company to company. Keep in mind you get what you pay for and what you DON'T pay for.

0 votes Thank Flag Link Thu Feb 28, 2013
You as an individual negotiate what commission you pay. There is no average or minimum commission! Each real estate company is free to set its own fee schedule and to negotiate various rates with individual buyers and sellers. Any agreement between two different firms to set standard rates, however, is a serious violation of antitrust laws. Violations occur when competing firms agree to act together this is what the US Justice Department calls restraint of trade. There is no set fee, fees are negotiable.
0 votes Thank Flag Link Thu Feb 28, 2013
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