Home Buying in Fort Myers>Question Details

tdscm1, Home Buyer in Fort Myers, FL

6% or 7% commission?

Asked by tdscm1, Fort Myers, FL Wed Mar 6, 2013

We're getting ready to list our home & have talked to a couple of realtors. They both came up with the same asking price, but one wants 7% - claiming we will get more showings.
We only want fully qualified potential buyers, not a parade of lookers. Is there any proof that paying 7% commission will get us what we want?

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Answers

26
Agreed with Alan!

Agent bonuses are a total waste. The premise of an agent bonus is that you are basically saying: "If I dangle a bigger carrot out there, buyer's agents will try harder to sell my property".

If your agent is "pushing" a particular property on you because he/she is getting paid more, instead of ensuring that you are truly getting a home that is the best fit for your needs, and that you are getting the best deal - then they are doing you a massive disservice and it's time to find a new agent.

I don't really care whether I'm getting 1, 2, 3, or 6% - my focus is on an exceptional customer experience, a hassle-free home purchase, and getting my clients an outstanding deal & a property that they can actually sell 10 years down the road. Focusing on "what you are paid" will get you a few deals, and a bad reputation. Focus on service and you'll build lifelong clients, unbreakable trust, and lots of references - the money & success will inevitably follow.
3 votes Thank Flag Link Fri Mar 8, 2013
Agents who DO NOT LOOK AT THE AGENT COMPENSATION data for a home that is shown for sale are allowing their buyer to walk on a land mine. Discount and limited service brokers DO place homes for sale in the local MLS with $1 (One WHOLE DOLLAR) compensation to the agent representing the buyer.
Either you look at the compensation field or you are destined to induce unnecessary 'crisis' into an already emotional and stressful situation.

Don't believe for a moment that business folks are not motivated by incentives. To say otherwise is to act in defiance of what the free enterprise system is all about. Don't believe it for a moment. If you need to sell your home...use the same resources and tools that persuade you to buy the things you need.
1 vote Thank Flag Link Sat Mar 16, 2013
It shouldn't matter what the commission is. If a Real Estate Agent is working for their buyer they should put their buyers interest first. When I pick properties out to show my buyers I never look at what they are paying out. I don't believe I can sell a property to somebody just because it pays a higher commission unless they are absolutely in love with that property. However, there are some agents out there that will show the higher commission properties first before they show the others. But these days, buyers have already done their property search online and have picked out all of the properties they want to see. So whether it's paying out 6% or 7% it's still going to get shown!
1 vote Thank Flag Link Fri Mar 8, 2013
6-7% commission is normal! I recommend choosing the realtor that you feel most comfortable, trusting and confident that they know the area and will work hard to sell your home! Don't just choose an agent because the commission is 1% lower! We work very hard !

Alexis Hansen
Market America Realty Network
863-673-6027
Alexis.c.hansen@gmail.com
1 vote Thank Flag Link Thu Mar 7, 2013
"Is there any proof that paying 7% commission will get us what we want?"

NO, there isn't

Don't worry about a "parade of lookers" - welcome them - welcome all buyers who are brought through your home........ as one of them might very well buy your home!
The agent will make sure they'e qualified.

Aggressive marketing and an agent who knows the area and has a track record listing homes and getting them sold will get you "what you want".
Pricing your home competitively will help you get what you want - a qualified buyer!

Did you receive a written marketing plan from both agents?
I hope you did.

If you didn't - ask for one.

If you did, compare and contrast what is going to be done on your behalf.
Ask to see samples of the agent's marketing materials - look at other listings they have online to see how wel they are presented - if you were a buyer, how impressed would you be by that home's online presence? - are the photos professional, clear and flattering to the home? Is there a virtual tour? Does the home have it's own domain address? What helps distinguishe the home from other listings? is the verbiage used to describe the home inviting to a buyer?
All of the above is what will help buyers take note of your home.

A slightly higher commission might impress an agent but it's not going to impress a buyer........and any agent who doesn't show a home because the commission might be slightly less is a fool, imo, because more than likely the buyer will find out about that house - as most buyers are already looking online. How will an agent not lose credibility in the eyes of their buyer if they skipped over a home because they didn't like the commission? How will they explain why that home was left off the list of showings?

Review what each agent offered to do for you.....then make an informed decision!! It need not be based on a higher commission.

And......honestly - if you're inclined to offer an incentive - offer it to the buyer!

Good luck!
1 vote Thank Flag Link Wed Mar 6, 2013
Debbie, I love your no nonsense answers. You are my favorite colleague on this site.
Flag Thu Mar 7, 2013
It's good to have options, the question is, can they deliver what they say they can? What proof have they shown you that back their claims? I produce a spreadsheet for my clients that show what I've listed, how fast it sold and how close to list price they got. It's produced live from my MLS so there is no monkey business. I do have some adjustments due to taking over listings from other agents and removing their days on the market, but other than that my numbers speak for themselves.
If one or both of these agents can back up their claims, base your decision on the results. The commission will take care of itself.
1 vote Thank Flag Link Wed Mar 6, 2013
I am flattered, as I think your advice is always top notch and it is clear you know what you're doing and are a top professional - you're on my list of agents I'd refer a client to if I had the opportunity! Thanks!
Flag Thu Mar 7, 2013
Commissions are negotiable,using the number one question you need to ask each is what do i get for the fee i will pay. Paying more only as an incentive to bring more buyers is not warranted to pay more then. You want an agent who will guide you through each step of the selling process and one who will provide ample marketing and advertising right from the start. Ask who they think the potential buyer is and how they will reach thes epotential buyers. NOW any agent who typed in an actual commission amount had violated the federal anti trust law for commissions. You can ask what they charge and what you get for what you pay but NO agent can discuss what any other agent charges.
0 votes Thank Flag Link Fri Mar 22, 2013
I think you have done well to interview a couple of Realtors before settling on one.I think what you find challenging is how to choose the best Realtor to sell your home.

Asking for a higher commission than the norm is not a good sign for me.Here are some more tips on what questions to ask a Realtor.

All the best.
0 votes Thank Flag Link Sat Mar 16, 2013
tdscm,
Since the conversation has shifted into a discussion about possible bonuses, I'll provide another viewpoint on this. While many of the great agents here say they will not be influenced by a higher commission, I think this is great. I do however believe that enough would find reason to point out any faults if the commission offered to the buyer's agent wasn't competitive with what others were offering.
Regardless of what you agree to pay your agent, make sure you are not putting your home at a disadvantage by offering a lower commission. I took over a listing last year that backed up to a busy street. It was going to be a tough sell due to the location. On top of this my processor had offered a lower selling office commission than other better located similarly priced homes were offering. When I interviewed for the listing, I pointed this out right away. Any agent worried about the reduced rate didn't need to bring it up. They only needed to point out the busy road to discourage their clients from making an offer on the home. After addressing this and doing some better staging we had a great offer in no time.
0 votes Thank Flag Link Fri Mar 8, 2013
While I agree, that I'd like a co-op commission that's competitive with other listings... that doesn't mean it has to match. I have shown properties with a commission as low as $100.00. That's right, $100.00. Did I hold my breath, and pray that my buyer wouldn't like the property? You bet I did... but I showed the property anyway...
Flag Sat Mar 9, 2013
Hello,
The local area average listing commission is 6%. The listing agent generally splits the amount with the selling agent in half. However, sometimes other circumstances come into play such as: The seller plans on using the listing broker to purchase their next home. Now the listing broker has a potential commission of 6% on the listing if sold by the listing broker + 3% on the purchase of another property. When that happens then I have room to adjust the listing commission to sometimes 4.5 - 5%. If your home is appropriately priced then the rest will fall into place.

As far as qualified buyers are concerned, Realtors typically will not show properties to buyers that do not have a pre-approval letter from their mortgage company or a bank statement that proves they have the money it takes to buy the home.

Most Realtors should be qualified to assist you with your listing when it comes to marketing because most of us use the MLS services to advertise along with other search engines that buyers are using today. Where some Realtors fail is in their ability to physically market the property such as with open houses, email marketing and direct mail.

I am happy to help you anyway you allow me to. Please call me for a private conversation and a free comparable market analysis on your property. Thanks again for your question.

Sarah Garrett, Realtor
ALLIANCE REALTY GROUP
"Chosen Best in Client Satisfaction 2006-2012" by Gulfshore Life Magazine
Cell: 239-464-8620
Email: sarahgarrett@argfl.com
Website: http://www.flrealestatebuysell.com
Web Access to MLS:
0 votes Thank Flag Link Thu Mar 7, 2013
you might want to read up on the federal anti trust laws - agents should never discuss specific commissions or refer to commissions as: typical, common, usual, average, expected, etc - the only correct response to a commission question is: ALL commissions are negotiable - interview agents and let them discuss what their specific plans are"
Flag Fri Mar 8, 2013
tdscm1 - let's assume, for the moment, that the Realtor who suggested the higher commission is going to offer the full 1% difference to the buyer's agent (and that's a heck of an assumption). He's tugging on your wallet by suggesting that a 1% higher commission to the buyer's agent WILL bring you more views.

I can only speak directly from my experience, but here's how I do it when working as a buyer's agent. I don't show properties to my buyers based in ANY part of what you're paying as a co-op fee. In fact, I don't even look at that number. I input my client's needs into the MLS, and any homes that fit their parameters pop-up, and are sent to them automatically. Commission is not one of the criteria used in the search.

Then, once they've viewed the homes, they tell me which ones they'd like to see... and I, of course show them to them.

So, while I'd love to get 1% extra... it doesn't have any impact whatsoever, on whether I'll show your property at all... so in my mind, it's a total waste of money. I feel the same way about agent bonuses...(it's not the agent buying your home, it's the buyer... ).

Save your money... or reduce the price of the home an additional 1%. Listing price DOES attract buyers... and the more viewers attracted to your property, the more likely you are to find the buyer.
0 votes Thank Flag Link Thu Mar 7, 2013
Alan May, Real Estate Pro in Evanston, IL
MVP'08
Contact
You need to see what they offer in terms of Marketing. Everyone is different. I'd be glad to share our marketing strategy with you. Let me know if we can help.

jessemcgreevy@gmail.com
239-898-5329
http://www.Domain-RealtyGroup.com
0 votes Thank Flag Link Thu Mar 7, 2013
=
-

If I were selling a 300k home and was to "get what I paid for" in giving away $18,000 of my Tax Free home equity= $24,000 of pre taxed gross income, I had better get a lot more than a song and dance from a realtor blowing sunshine north to get me to sign a 6 month (you're all mine for 1/2 yr) listing contract for entering it into the MENU called the MLS! Then going MIA on me and hoping a Buyer's Agent sells the home!

Again....
As a Florida Mortgage Broker, I believe that I can give you some ideas as to how to sell your house quicker and how to get top dollar too!

You need to step outside the box and consider doing things differently. Before you sign a 1/2 yr listing contract, just try it this way with a realtor for 3 months and see.

Example: $300,000 only using 6% commission not 7%

The old way...
3% Commission = $9,000 to the Listing Agent
3% Commission = $9,000 to the Buyer’s /Selling Agent

---------OR…

The New way that works much faster!
1% Commission = $3,000 to the Listing Agent
5% commission = $15,000 to the Buyer’s/ Selling Agent


http://www.youtube.com/watch?v=-NWF23PvKCo&feature=related

FACT: The likelihood of Listing Agents selling their own listing is rare as many follow the "set it and forget it" strategy. They want to list homes and let other agents sell them.

The vast majority of homes are sold by Buyer’s agents who sell other agent’s listings. Therefore, offering a 5% or even 7% commission (vs. dropping the sales price which shows desperation) to any Buyer’s Agent can Greatly increase traffic on your home and the chances it will sell quickly and for a higher price!

It’s only human nature if you think about it, a Buyer's Agent reading the MLS in your area for homes to show their buyers see homes paying 2%, 2.5% and 3%, but then suddenly your listing grabs their attention paying 5% = $15,000! You can bet that Realtor will make DARN sure your home will be on the list to show their buyers! And I bet there will be a lot more positive things said about your home…ya think?

There are Realtors who will list your home for as low as 1% allowing you to offer 5% to the Buyer’s Agent to sell your home quickly and if they can sell your home, then more power to them as they can get paid the whole 6% for finding a buyer!

Steve McRory

Pro Option Mortgage/Florida
http://www.pro-option.com

steve@pro-option.com

Ph: 888 662 4404

Prior Service U.S. Marine Corps
===
0 votes Thank Flag Link Thu Mar 7, 2013
To answer your question more specifically - a higher commission does NOT correlate to a better result. You'll hear the "you always get what you pay for" rationale - however it is simply not always true unfortunately.

Regardless of what is charged - pricing your home effectively, and the amount/quality of targeted marketing you do, does.
0 votes Thank Flag Link Thu Mar 7, 2013
Commissions are always negotiable so you could run into 5 different agents that will all quote you a different percentage. The only advantage I can see to the 7% would be if the listing agent was only going to take 3% and offer the buyers agent 4% as some agents would work harder to find buyers offering such a nice co-broke fee but even that is no guarantee of more qualified buyers viewing your property.

You need to give serious consideration to how the agents you interview will market your home. What websites where your home appear on is critical as most buyers do search online. I would even recommend you view some of their listings online and see if the marketing comments are detailed and well thought out to grab the buyers attention. I would also see how many photos they posted in their listings. I see numerous listings where the only picture is the front of the home. Quality photos of both the interior and exterior are extremely important.

Feel free to contact me if you are still interviewing agents and I will be more than happy to discuss how I would market your home to accomplish getting from "for sale" to "sold".

Terry McCarley, Realtor®, CDPE
Email: leecountyrealtor@earthlink.net
Phone: 239-707-4575
0 votes Thank Flag Link Thu Mar 7, 2013
Lots of conflicting information here...

The truth is - commission is negotiable. Any agent who tries telling you that a certain percentage of commission is "standard", is A. lying, and B. it could be argued that they are engaging in "price-fixing", which is illegal for licensed agents to do.

There are a variety of ways you can go about selling your home. You can:

1. Do it yourself - you get no support here. You pay for everything yourself, and it's completely up to you to market the property. You also pay the least.

2. List it with a "flat-fee" MLS service. You pay a small commission out to a buyer's agent, and a small upfront fee to listing company. You get on the MLS, may get some marketing, and signs. You pay a small fee here - plus a smaller percentage "out" to a buyers agent.

3. Hire a licensed agent. Here you get 100% support start to finish, pay nothing unless the property sells - but for this you will pay more. How much more is negotiable and depends on the agent.

At the end of the day - if you want the advantage of real estate agents bringing their buyer clients to you - you'll have the dangle the "carrot" in the form of a small percentage of the purchase price in front of them somehow. You can do this FSBO, through a flat fee service, or with a real estate company. The bottom line is how much support you want on the selling side. If you have the expertise to price your home accurately, can coordinate all of the showing and marketing yourself, and are well-versed with the paperwork, etc. - then by all means go for it.

If you don't have that kind of time, desire, and know-how to do so - you might be more comfortable letting a professional handle it for you.
0 votes Thank Flag Link Thu Mar 7, 2013
You pose a great question. Your listing agent has a fiduciary duty to use any and all legal and ethical means to best represent you in procuring a ready, willing and able buyer for your property. That includes using any and all means to cast the widest net possible to obtain offers.

As a Realtor, you take an oath to promote your client's needs above your own (commission in this response). But not all real estate agents are Realtors. So each agent make a mental choice to either abide by the code of ethics or not with each transaction.

Now if you take whatever you deem an appropriate number or percentage of agents that will place THEIR needs above their clients needs, they have buyers too that they represent.

So if you list at 7%, they see that BEFORE they show your property and a subtle hint or comment to their buyer may be just enough to tilt the scales into that buyer making an offer on your property instead of another. So, didnt your listing agent do thier job for you? He/she took advantage of a wider means of offering your property and it resulted in an offer to you FIRST.

Now lets look at this in real numbers. We have 5 homes for sale in the same area, same size and same condition. All listed for $100,000. Realize that virtually every seller has wiggle room, its just a fact of life.

So the buyer's agenta arranges to show all 5 and sees the last one offers 3.5% commission and all others are at 3.0%. The agent suggests that the last property offers the best value even though they are all pretty much the same. The buyers agree. They make an offer of $100,000 and the seller accepts, the deal closes.

Now- the seller paid $1,000 more in commission than the other 4 offered. But this house is the one that sold, the other 4 are still on the market

Now would any of the other 4 sellers have accepted $99,000? Probably all would have. After a property has been on the market a while, the seller's usually reduce the list price and probably more than $1,000.

So, the seller paid $1,000 more in commission, stoped paying taxes, insurance, utilities and upkeep on his property sooner than the others did. That probably saved the $1000 "extra" commission all by itself.

You could have always lowered the price to what $95,000, $97,000?

So the buyer is happy, the seller is happy, the listing agent did his job above the other 4 listing agents and took advantage of ALL the agents out in the market place, ethical and unethical and completed his task ethically and successfully for his client. The property was sold first.

Sellers need to realize that they are either working with their agent or against them. You can't expect something for nothing, and be disappointed when you "get what you pay for".

If this were an easy job, everybody would do it. Its being successful that makes you good at what you do. Learning people, knowing how to take advantage of the market is what everybody wants an edge in, but only a few realize how to do it.

It matters not if the property is priced correctly or not in this question. While it needs to be in order to actually sell for lost of other reasons, we assumed it WAS priced correctly and the other 4 were as well.

I have 15 years experience and with 640 sides closed, I have a fairly successful resume. Consider that average agent sells about 8 homes a year.

There are plenty of agents that take the easy road, offer to "work" for a lower commission, overprice the property and hope someone else sells it or wait until the price comes down to market value and then it sells.

But that is only part of the puzzle. You need to pick an agent your gut tells you is the right one for you. Look untilou find them.

Cheers

Kevin Cloutier, Commercial & Residential REALTOR
A HouseSOLD Name
0 votes Thank Flag Link Thu Mar 7, 2013
Russ, you can disagree but don't call me a liar. Not very professional. When was the last time you listed and sold a home in Fort Myers?
0 votes Thank Flag Link Thu Mar 7, 2013
There is no proof that 7% commission will get you more showings. Nice, properly priced homes and an aggressive marketing plan and a competitive commission will get the job done.
0 votes Thank Flag Link Thu Mar 7, 2013
Commissions are always negotiable. It depends on many factors when organizing a plan to market your home. Steve offers a unique approach which may hold some merit. Factors to consider include: condition of home, comps in the area, current inventory in the area, price point of your home relative to others in the area, location, location, location, floor plan of your home, staging of your home, current market conditions ect… The bottom line is there is no turnkey approach to listing a home and every home is different. Considerations: interview at least 5 Realtors® who have turned at least 15 transactions last year & are LOCAL to your area. If they don’t fit this criteria don’t hire them! Tour every house on the market in your area with your agent (10-15) & take notes before you price your home, this will help give you a base line of realistic expectations of market conditions. PRICE YOUR HOME CORRECTLY!!! Don’t overprice your home and have a pre-inspection done!
0 votes Thank Flag Link Thu Mar 7, 2013
Absolutely none and the suggestion that by doing this you'd get more showings is not only misleading it's a reflection of the agent you spoke with and in my mind it shows their sleazy and thier appealing to other sleazeballs like themselves. The only one focused on the commission rate is the agent not the buyer and the best agents don't even look at the commission rate until thier client is ready to make an offer.
0 votes Thank Flag Link Thu Mar 7, 2013
Here's the deal....buyers typically don't even see the fee for professional services associated with a property so there would be no difference in interest based on this perspective.

However, it would be only the agents involved that both knew of this difference and appreciated what the specific difference would mean to them.

So any difference..if one truely exists, would stem directly from agent involvement and my hope is that this would not enter the picture.....

Hope this is helpful.

Bill
0 votes Thank Flag Link Thu Mar 7, 2013
Don't believe him. Just because commission is more that more showings will be forth coming. You will get the same amount of showings if the agents are doing their job and marketing your home. Base your decision on their market plans, past sales history (how houses a year do they sell), do they respond and communicate well with you. Those are just a few prerequisites of good agents.
0 votes Thank Flag Link Thu Mar 7, 2013
Fully qualified potential buyers are the buyer's agent responsibility. In our market, Lee County, the higher commission gets more attention and your home sells faster. One caveat...price it true market value or commission is moot.
0 votes Thank Flag Link Thu Mar 7, 2013
Commission is negotiable. I agree with Keith below that a listing offering 3.5% gets more showings than one at 3%. And those at 2.5% get shown last. However, if you are in a market where there is lots of competition after the homes and you are priced at market value, there should be enought buyers iregardless of the commission. And no matter what amount you agree to pay; you can still spell in bold in your listing "will only consider offers that are cash or conventional" or "must be qualified by such and such lender before we will consider your offer". Personally I would only pay the extra commission if the agent is doing things above the competing agents (video tour, private websites, etc) or if it still a buyers market in your area. Was this answer helpful? If so please click on the "green thumbs up" or the "best answer".

Tony Vega
La Rosa Realty
0 votes Thank Flag Link Wed Mar 6, 2013
Typically if split correctly, a 7% commission will make you look more desirable than the competition. Ethically a real estate agent is not supposed to look at commission first when deciding what to show a client, but people are people and it happens sometimes. With a 3.5% offering, you look VERY intriguing to ALL agents. The proper split should be giving out 3.5% to buyers agent and sellers agent keeping 3.5%. I hope this answers your question. Just ask what the split is before you sign the contract. Here in NJ it is BOLD on our contracts so you can not miss it, but I am not sure how it is in Florida. Best of luck!
0 votes Thank Flag Link Wed Mar 6, 2013
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