Home Buying in Costa Mesa>Question Details

Susan, Home Buyer in Santa Ana, CA

What is the standard commission in Orange County for real estate? Do real estate agents give discounts on a listing and purchase?

Asked by Susan, Santa Ana, CA Thu Mar 11, 2010

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ALL AGENTS PLEASE READ!!! Under no circumstances should a licensed agent or broker ever discuss commissions in a public forum. It includes every state, this is federal.... It is against the law, it violates the Sherman Antitrust Laws and you could face loss of license, fines or jail. An agent can quote commission to a potential seller on the phone, email, fax or in person. But can not discuss what others charge. the correct answer to this question is commissions are negotiable, each office has their own rate and more important what they offer for that rate. Please contact individual offices and simnply ask what they charge. So please review this question w9ith your broker or legal department before discussing commission in an open forum.
Web Reference: http://www.ScottSellsNH.com
4 votes Thank Flag Link Fri Mar 12, 2010
You need to read the Sherman Antitrust law to understand what it means * quit b-s'g people. Get over yourself
Flag Tue Jan 27, 2015
Susan,

This answer applies in Orange County as well as Alameda County...really...in any California County...and, I suspect in most places across the U. S.

There is no “standard” commission. Commissions are negotiable. Some agents give discounts. The Medford Real Estate Team does not.

Our real estate team has our expectation of the commission that we expect on a listing and we think we are worth it. For a buyer representation, we take what we are paid.

There is more to buying and selling a house that the commission. If that is your only concern, we would probably not do business together. Our commission is our income and we work hard to earn it. We realize that is not true for everyone. We also realize that not all of the public believes that we are worth what we earn. Part of the challenge in our business is convincing our clients that we earn our pay. We are willing to work in an environment in which we have to constantly prove our value. We don’t compete on price alone.
3 votes Thank Flag Link Thu Mar 11, 2010
Brad Davidson,
The fact that you are a broker and appear to have a total lack of understanding of what Scott Godzyk made very clear is scary. This is real estate 101, not discussing commissions in a public forum, and I suggest before you state the nonsense you did, in the manner you did, you go back and read your basic real estate book.
Nobody here said anything about full service vs discount/flat fee/buyer rebate or anything like that. They just stated the fact that commissions are negotiable and not to choose agents solely based on commission.
I have no issue with various fee structures, have stated so repeatedly on this forum.
I do have issues with agents, especially brokers who don't understand basic anti-trust laws.
2 votes Thank Flag Link Tue Mar 30, 2010
Hi Susan,

The best thing to do is research a few agents, this is a good place to do that, and then make some appointments and talk to the agents. Talk to them about your specific property and situation. Then ask questions about how they will market your home and definately what they will charge you to do it.

Then you will have the information you need to make a good decision for you. Real estate transactions are more complicated than just sales commission...you need to find an agent that is going to work for you....you family, time tables, schedules AND budget.

I'd love to meet with you and discuss how I work...if you like!

Karen
2 votes Thank Flag Link Fri Mar 12, 2010
Susan - agents who answered your question quoting specific commission rates shouldn't have.
Doing so is contrary to the Sherman Anti-trust laws..........agents in a public forum, or even among themselves, should never state that a commission is "standard" "curtomary" "usual" or " the going rate". The only correct, allowable response is - "all commissions are negitable".
As a consumer, you are free to meet with, and discuss the commission with an agent one on one, and they can then let you know what their commission would be. You will probably find a variety of options.

For agents who are unaware that it's not acceptable to state specific commissions (which can be interpreted as an attempt at price fixing), I suugest they check with their state Real Estate Commission, or even Board of Realtors for clarification.
2 votes Thank Flag Link Fri Mar 12, 2010
Susan,

There is no fixed rate of commission as a seller or a buyer in any state. They are completely negotiable. However, I would highly encourage you to shop for an agent by their skills, experience, references, and reputation rather then what they charge. Especially in this market!

When you are a buyer there is usually a % or a dollar amount built into the listing price agreed to be paid to the buyers agent from the seller.
2 votes Thank Flag Link Thu Mar 11, 2010
To paraphrase Eleanor Roosevelt, kw, nobody can make you feel like a mushroom without your permission.
1 vote Thank Flag Link Wed Feb 20, 2013
Susan,

There is no STANDARD commission for Realtors.

Some agents may reduce their commission under certain conditions.

Kawain Payne
1 vote Thank Flag Link Tue Jun 26, 2012
After reading the postings regarding real estate commissions, my opinion of real estate agencies places you people into the same ranking as car dealers, union heads and attornies.
1 vote Thank Flag Link Fri Jun 22, 2012
Great responses....Scott Godzyk, Joan, and Debbie Rose have said all that needs to be said with Brad's commentary as a good addition...so why is this very question being asked over and over and over again...did you all miss your mandatory CODE OF ETHICS and SHERMAN ANTITRUST CLASS?

So why are REALTORS still responding to this question in direct violation of the Antitrust laws?
1 vote Thank Flag Link Sat Sep 25, 2010
Santarosaguy,
If you read the article and the link that Duffy posted, there isn't much doubt about the dangerous position that agents are putting themselves in by discussing commissions in a public forum.
Basically, there should be no discussion of commission between competing brokerages, private or public.
This does not mean we can't discuss, as I stated previously, different commisson structures and business models and obviously commission SHOULD be discussed amongst agents and the people who are thinking about hiring them.
With commissions being negotiable, it is not feasible to advertise a set rate, because there is no set rate.
1 vote Thank Flag Link Wed Mar 31, 2010
I responded to this question back at the beginning of the thread, and had decided that since I stated my position, I would remain silent.

Well......you know how we realtors can be - who can ever remain silent! :)

Duffy, thanks for taking the time to post those lnks. I have often cut and pasted excerpts from those exact articles to use here on Trulia when either defending or simply explaining the pitfalls of discussing precise commission rates in public. So many agents feel it is perfectly fine to say " this is our customary", "usual" or "standard" commission...............it isn't fine to say that!

I will honestly admit that i wasn't aware of that when I first started here on Trulia. One of the things I love about this site is the ability to grow and learn from others (yes, even after 25 years in the bvusiness, I can still learn...... and even retain a few things along the way!!).

For those who want to dig their heels in and remain fervent that their position is the correct one, and it is perfectly fine to discuss specific commission...........go right ahead - defend it all you want - you're still wrong.

My only repsonse to this now..........is........go have a conversation with someone from your state's Real Estate Commission, and see what they say about stating commissions in a public forum.
I rest my case............
1 vote Thank Flag Link Wed Mar 31, 2010
How funny is this...almost word for word...check it out.
California Real Estate Practice By Kathryn Haupt, Megan Dorsey, CHAPTER 3, PAGE 95.
1 vote Thank Flag Link Tue Mar 30, 2010
I have no issue with you sharing your commission with your client. No reason to yell.
Public discussion of commissions can lead to the perception of price-fixing which is why it is not only prohibited but illegal.
I have no problem with discussing different commission structures. I do believe that the real estate industry can only benefit from bringing consumers more choices in services and how they are paid.
I do have a problem with agents thinking its okay to discuss specific rates.
You might believe its overkill, but I think its better to be safe than sorry. Sometimes, its all about perception and I think we need to be very careful about how things are perceived in a public forum.
1 vote Thank Flag Link Tue Mar 30, 2010
Good job Joan!!!

This forum is to help consumers get a feel for agents and real estate in general. It's critical for our industry that we do so in a professional manner and uphold our Ethics training in the process. You nailed it....

Thanks....

Susan....I hope you have reached the realization that real estate commissions are negotiable the same as home prices. It's too shallow to say "you get what you pay for" because I have often worked very hard on a ver low priced home and been paid very little....but you do need to make sure you have a quality person working on your behalf. That includes someone who knows the rules and plays by them :).

Karen
1 vote Thank Flag Link Tue Mar 30, 2010
Susan,

As Debbie and Scott have stated, all commissions are ALWAYS negotiable. Real Estate Practitioners cannot discuss commissions with each other and never in a public forum. Believe it or not, we cannot even discuss commissions with each other when we're together at Real Estate Agent / Broker gatherings, meetings, training sessions, caravans, previews, open houses, etc. It is an Anti-Trust issue. If licensees are discussing commission structure or offerings with other licensees, it can be considered "price fixing" and they should get out of the business becasue they do not understand the laws they must abide by.

Again, commissions are ALWAYS negotiable with each individual Agent / Broker.

Best of luck to you, and remember, you get what you pay for.

Thom Colby
Broker / REALTOR
Southern CA and,
Southeast Texas
Web Reference: http://www.thomcolby.com
1 vote Thank Flag Link Fri Mar 12, 2010
what is the typical real estate commission charged by real estate agencies?
0 votes Thank Flag Link Fri Jun 22, 2012
Scott, what about the flip side not discussing commissions in a public form or seeking not to allow this discussion in a public form, this may be construed as intent to dissuade a competitive atmosphere in a real estate transaction thus a violation of the Sherman anti-trust law since an action was taken to prevent open and fair competition. I see no problem with agents quoting their rate / business model in regard to this question. Where the problem arises is when agents or brokers collude to prevent competition or to price fix. Advertising your business model or answering specific questions with a specific answer about your fees is not a violation although it may upset other full fee agents. I do agree that answering the question in this form is probably not the best business decision for an agent since there are many other factors which influence the way a contract is prepared.
0 votes Thank Flag Link Sun Sep 11, 2011
Of course you can publicly discuss what you charge for commission. The whole point of the Sherman Act was to encourage competition, and make sure there was no price fixing, when indeed the law was trying to insure that the consumer was aware that commissions are 'negotiable' 'not fixed'. This whole issue came up throughout the years because Brokerages tried to slam discount brokers, and blackball their listings. Also there have been cases were many brokerages joined together to boycott discount brokers, and try to price fix commissions.

The law was to discourage any collusion on the part of agents and their brokerages. The fact that we can all share our varying commission fee structures without being criticized or slammed for not giving professional, full service, if we are discounters, is partial intent of the law. Encouraging competition so no one can corner the market and price fix, or black ball other agents listings or office.
0 votes Thank Flag Link Sat Sep 10, 2011
I would suggest interviewing numerous realtors and mortgage lenders to determine who can benefit you the most by their service and the commission. Remember, both are professional salesmen :)
Web Reference: http://www.AQHomeLoan.com
0 votes Thank Flag Link Fri Dec 3, 2010
Amazing that most of you have no idea what you're talking about... sorry to ruffle your feathers.

You're misinterpreting the intent of the anti-trust laws.

The law is intended to keep COMPETING BROKERAGES from price fixing. Each individual broker can determine what their own fees are.

Call your real estate attorney... your state dues probably allow you a free conversation so he/she can pound some sense into you.


I can just see it now. Someone over at the bubble gum forum asks, "how much is a pack of Hubba Bubba?"....

1. You can't talk about that!
2. There are anti-trust laws about telling someone what you charge for gum.
3. We should never discuss the cost of gum in a public forum.
4. Gum prices are very private and should only be discussed in a dark closet in a basement or second story room with no windows.

No wonder our industry has a crap reputation.
0 votes Thank Flag Link Fri Dec 3, 2010
Well Spoken....................................................
0 votes Thank Flag Link Sat Jun 12, 2010
It would be unwise to discuss commissions privately, amongst yourselves or in a private realtor-only forum. Discussing commissions in a public forum is hardly at risk for conspiracy charges (absent blatant collusion/price agreements).

I'd say the intent to collectively NOT speak of commissions is the far greater risk of violation. Take a peek at:
http://www.justice.gov/atr/public/guidelines/211578.htm where it says:
"Other examples of price-fixing agreements include those to:" ... "Not advertise prices"

In my (very much zero-legal-expertise) opinion, those of you who are lecturing others not to discuss commissions are likely closer to violating laws than those you are lecturing.

If you feel it's best not to discuss commissions - so be it - but I'd be wary about telling others not to discuss commissions. That seems like collusion to me, but I'm no lawyer/legal expert. Just my opinion.
0 votes Thank Flag Link Wed Mar 31, 2010
Hi Thom....glad to see you join us :)

Duffy ...really great post! Thanks for joining us.

K
0 votes Thank Flag Link Tue Mar 30, 2010
Duffy -

Excellent post !

Thank you !!

Thom Colby
Broker & REALTOR
Southern CA
0 votes Thank Flag Link Tue Mar 30, 2010
Thanks Joan, apology accepted.
0 votes Thank Flag Link Tue Mar 30, 2010
This was an answer from an Arkansas professional and if you went to the link, as I couldn't post the entire opinion, his last paragraph was consistent with multiple opinions from many officials from various states. In other words, don't pet the dog if you know the dog bites. ;-)
0 votes Thank Flag Link Tue Mar 30, 2010
"All the agents who don't want commissions discussed in a public forum are the ones who don't want you to know about discounts on real estate commissions."

The above was the only thing I had an issue with Brad.
I don't want commissions discussed in a public forum because we're not suppose to. Specifically, commission rates.
However, discussing different types of commission structures is just fine and dandy with me.
0 votes Thank Flag Link Tue Mar 30, 2010
Joan, I'm happy to engage in a civil discussion about any issue. However, if someone characterizes one of my posts as "nonsense" or having "a total lack of understanding" then they'll get an appropriate response.

I've read the piece Duffy posted and to make the leap that any answer to Susan's original other than "real estate commissions are negotiable" is a violation of Sherman Anti-trust laws is quite a stretch. Let's play nice though.
0 votes Thank Flag Link Tue Mar 30, 2010
Thank you Duffy.
Dang, 25 character requirement.
0 votes Thank Flag Link Tue Mar 30, 2010
REAL ESTATE BROKERS AND ANTITRUST LAWS
By Timothy W. Grooms
Williams & Anderson
111 Center Street, Suite 2200 - Little Rock, Arkansas 72201
(501) 372-0800

(EDITOR'S NOTE: This article has more technical information about legal matters than usually found in AREC Newsletter articles . It contains important information which the reader may wish to discuss with an attorney.)

I. INTRODUCTION
Until recent years, real estate professionals have had little contact with the federal Sherman Antitrust Act (the "Act")[1] However, a 1980 decision rendered by the United States Supreme Court,[2] in addition to numerous lower federal court and state court decisions subsequent to that decision, have made it clear that the actions of real estate professionals and the professional organizations to which they belong are subject to the prohibitions and requirements of the Act. Familiarity with the provisions of the Act are critical in that violations thereof are punishable by both criminal and civil sanctions. A criminal violation of the Act is a felony punishable by imprisonment for up to three years and fines not exceeding $100,000 for individuals and $1,000,000 for corporations. Damages awarded to plaintiffs in civil actions are automatically trebled.

II. THE TEST OF ILLEGALITY
The literal language of the Act prohibits every contract, combination and conspiracy in restraint of trade. While early United States Supreme Court decisions suggested that "every" was to be taken literally, a "rule of reason" now prevails to merely prohibit those concerted actions which cause an "unreasonable restraint of trade."[3] Nevertheless, the courts have held that certain conduct is so anti-competitive that it is not to be judged by the "rule of reason" analysis, but is instead illegal "per se." In the real estate brokerage industry, most civil and criminal litigation has centered around three challenged practices, any of which, if successfully proven, constitute "per se" violations of the Act. The balance of this article will concentrate on these three areas, involving price-fixing, group boycotts and tying arrangements.

III. PRICE-FIXING
Agreements among competing brokers to set commissions is price fixing and hence illegal per se.[4] However, illegal price-fixing is not limited to those cases where a specific fee or commission rate is agreed upon. Rather, the prohibition extends broadly to all agreements which have the effect of raising, depressing, fixing, pegging or stabilizing the price of real estate services. Cases under the Act have not required a showing of an express agreement to adhere to an illegal plan; tacit agreement to such a plan will suffice for a violation of the Act.[5] Real estate professionals are easy targets of price-fixing suits because studies indicate that commission rates have been relatively stable over time.[6] Plaintiffs usually allege that such stability is due to either tacit agreement, express agreement, or other type of collusion among real estate professionals. However, it is equally convincing to this author that the fact of commission rate stability by itself should not establish a conspiracy. Indeed, the historical trend of inflexible rates may be the strongest evidence that the phenomenon is explainable solely by market forces, not by collusion. Arkansas real estate professionals should be extremely cautious to never discuss with other brokers, in any setting, commissions which they are charging to their buyer or seller clients. These discussions, which the author can envision as being potentially "pro-competitive," in that they might cause a broker to realize that he needs to lower his commission schedule to "meet the competition," are so potentially devastating in either civil or criminal proceedings under the Act that they should be avoided in all circumstances.
0 votes Thank Flag Link Tue Mar 30, 2010
Joan -

I SHARE MY COMMISSIONS WITH MY CLIENTS!!!!!

Go ahead and give Eric Holder a call and see if he's interested in prosecuting. Sherman anti-trust laws are all about price fixing and not in it's broadest sense does it prohibit discussions and/or advertisement of discount real estate commissions.

Karen - I'm sure you approve of this answer since you deem it professional to call out another agent in a public forum and question their general knowledge of real estate law.
0 votes Thank Flag Link Tue Mar 30, 2010
Hire a top agent and dont worry about commission, he/she will net you more than an average agent..... in real estate you get what you pay for.... a top agent will get you more money for your property and will negotiate better and get you a lowe price for your homes.... not all agents are the same, as a matter of fact only 2-3% are very successful....i can point you teh right way if needed.....btw im not from california...im from ny
0 votes Thank Flag Link Sun Mar 14, 2010
Susan,

All the agents who don't want commissions discussed in a public forum are the ones who don't want you to know about discounts on real estate commissions. I've been sharing my commissions with buyers for years and a lot of agents hate it because the "Big Box" real estate business model can't compete.

I do everything full commission agents do except drive you around to a bunch of houses to see if you like the neighborhood. For that difference the typical Orange County single family homes buyer gets back about $7,500 as a rebate from the commission I earn. Don't believe that the commission is free for the buyer. It's built into the price of the home. When you pay for that property it's your money that's actually paying the commission.

I also list homes for a discount and you'll save one to two percent through my services.

If you want more information check my website at http://www.wehelpubuy.com or give me a call at 714-961-8442.

Brad Davidson
Broker - 01416432
714-961-8442
Web Reference: http://www.wehelpubuy.com
0 votes Thank Flag Link Sun Mar 14, 2010
Hi there Susan. all commisions are negiotable. It depens on whether you are lsiting or buying.
You really need to examine all the pros and cons of discounting commissions.

If you would like more detailed information please drop me a line

Kind Regards
Michael Barron
Realtor/MBA/REO specialist
First Team Real Estate
(714) 552-6817
0 votes Thank Flag Link Sat Mar 13, 2010
Susan,

One other detail that you seem to be asking "Do real estate agents give discounts on a listing and purchase?"

When you talk with agents, ask about dual commissions. Those only apply when referring to listing and selling your home, not listing your home and then assisting you in buying the replacement home.

I'd be happy to meet with you and discuss all your questions. Check out my web site and give me a call 714-552-2335.
Web Reference: http://www.TimKunze.com
0 votes Thank Flag Link Fri Mar 12, 2010
Hi Susan,
Commission is negotiable. On the buying side you won't be paying the commission unless you have a written agreement stating otherwise. Ususally the seller pays all commission.

You can email directly if you have more questions.

Have a great day Susan! Great questions by the way!
Web Reference: http://aaronzapatablog.com
0 votes Thank Flag Link Fri Mar 12, 2010
Standard commissions do not legally exist. Most realtors will charge very close to the same amount unless they are listed as discount or one price realtor services. Up here on place used to advertise sell your house for $995. I think I saw one recently for $2,995. If you get a full service or flat rate it could be different. No matter what is asked for you can always bargain and insist on a lower (or higher) rate.
0 votes Thank Flag Link Fri Mar 12, 2010
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