Yes it may hurt the sale. Most buyers have a buyer agent representing them and showing them the homes. If a realtor is showing property to a buyer and the commission is lower that agent might not show that property. Instead he or she will show the properties that pay full commission. Realtors have double the work load now and aren't making half the commissions they were a few years ago.

The commission set by the seller is completely between the seller and their agent. Just like any other service, you can always find someone for less but are you really looking to find the agent that will list your house for the least commission handling that responsibility? Why would they be willing to do so? Are their services so substandard that they're willing to accept substandard compensation?

On the flip side, ethical buyers agents show homes that would best suit their clients needs, as per the fiduciary duty we all have to our clients. The commission rate SHOULD never come into the equation. However, the reality is that not all agents will follow the higher ground which usually results in fewer showings.

OK David, you're hired.........see....scripts do work!

Hey......get out there and play some golf, swim or catch a fish.........too nice to be rebutting an agent's repsonse on Trulia!

Have a happy day!!
Debbie

ps it's probably too hot to go anywhere in Fl today - so hot here in NJ, too !

Angelia, you could have just copied and pasted your answer from NAR Q&A, that will save you some time.

http://www.realtor.org/archives/feat2200702

4. “Someone else will do it for less.”

You: Yes, you can probably always find someone who will take your listing for less money. However, the amount of money you pay is directly related to the marketing services provided to get your home sold quickly and for the highest value. Is that your goal?

Seller: I guess so. It’s how much I net from the sale that matters most to me.

You: Of course. Your net matters greatly to me too. I have a lot of experience selling homes in this neighborhood, and I believe that my marketing strategy and negotiation skills will lead to a selling price that will make you very happy.

Seller: But if other companies are willing to do it for less, I would save money.

You: I encourage you to take a close look at what the other companies are going to do for the fee. Usually a lower fee translates into less marketing dollars to promote your home, which isn’t a good plan in this market.

In the end, you’re not saving money when you pay a lower commission. You’re actually missing out on market exposure. And that’s the one thing that is going to get your property sold right now.

Seller: What will it take to get my property sold?

You: It will take more than simply adding the home listing to the MLS. I am prepared to handle all the details, from suggesting simple home improvements that will impress potential buyers, to hosting open houses, and crafting an online marketing plan that is customized to this property. My goal is the same as yours: attract serious buyers and sell this home for the highest dollar value.

Personally, I have a list of job responsibilities that I carry out for my clients when listing their homes. If you ask an agent to cut their commission, be sure to tell them what part of effectively marketing your house you want them to leave out. There are agents who are not worth 1%, the put a sign in your yard and you never see them again. But those of us who work our rear ends off to get your house sold, deserve the commission we set.

This thread provides valuable insight into the thinking of agents as explained by agents. It absolutely contains pertinent and valuable insight into a question often asked by consumers.

Ask yourself the Question? And decide though a listing agent may cut his or her commissions on the Listing side of the transaction if they then split that negotiated commissions with the Buyer’s Agent, it would be an injustice to you.

Example: 300k home at 4% and rather than give a full commission to the Buyer’s Agent the Listing Agent decides to offer only 2% to the Buyer’s Agent vs the 3% your neighbor is willing to pay him. Do you think this will have an effect on the sale of your Home?

I don’t know it is 3,000 dollars difference and the listing agent still has you as a buyer so the only one really potently giving anything up on their commissions would be the buyers’ agent and/or the buyer, cause he is probably under a contract with their agent to pay them a full 3% but remember that everything is negotiable sometimes with a good out come and sometimes not.

So if your agent turn to you and said this home is a beautiful home and has everything you want. However you do realize that this home will cost you an additional $3000.00 Cause the seller is not willing to pay my full commission! What Would You Do? Pay the additional money? or Find another home? Or just get mad at your agent for asking you to pay something that the seller is typically willing to pay!

But it is the decision of both you and your realtor as to who will get paid what? And I would not allow the Listing Agent to Negotiate the Buyers Agents Commissions as it will have an effect on the out come of the sell of your home.

I don't see how it would hurt your sale but you'll definitely get a lot more viewers if it was at least on par with what is the average offered in the area, the more you offer may catch the eye of a salesperson wanting to make more money and may go out of their way to check if they have a client that may be interested in looking at your property.

Hurting your sale, NO but offering more sure can help.

I'm sensing a little agent anomosity from Dunes, could that be what is expected to come for any agents that answer here?

Then let's allow the consumer to have another chance to read the comments of agents on this topic!

FYI guys and gals, be wary about stomping all over other agents answering very stupidly by first looking to see if they have a complete trulia profile or disclose what brokerage they are with. I've noticed a new trend of the real estate haters creating profiles now representing themselves as agents or brokers when they are not in order to stir things up a bit and to make us look bad.

Haven't been here in a while, boy this thread has quite a few amusing comments. I've enjoyed reading many of them, some funny, some good answers and some I'm still scratching my head over.

This is exactly the kind of Thread/Question every consumer thinking of hiring the services of an agent should read...........................
~~~~~~~~~

Yes they should. And they would discover that they DO get what they pay for.

The question posted was not about whether or not YOU personally would not show a home with a lower commission-but whether that would hurt their potential sale at large if I am reading it correctly

Any good agent will put their buyer's needs first and like most agent- I have sold for sale by owner homes and regular listings that offered a lower than ' typical' co op fee.

But- I am not the agent community at large.
All sellers hoping to max return would want to expose their home to as many potential buyers as possible- in order to achieve that goal.

That being said- a low commission offered by a seller to a buyer agent or co op agents could reduce showings- thus reducing potential offers.
Human nature is to get a reasonable return for their time and efforts in their work. Just ask anybody who works in a convential industry. They don't work at a job out of the goodness of their hearts. Agents are asked to ' give' at every turn. Next time you are at a restaurant- ask the waiter to give up his tip and see what happens to your service. Or - ask your attorney to discount his costs to create your will, or ask the grocery store to discount your grocery bill. I can bet you won't see it happen on a regular basis.

Of course those of us who have truly care about our clients will do what it takes and most of us have taken a reduced commission to get the right home for our buyers. But there are agents who won't.
This isn't about an agent based issue.

It's human nature.. not agent nature.

Steve came back and stated his opinion about this thread just a few comments ago Walter.

This thread provides valuable insight into the thinking of agents as explained by agents.

This is exactly the kind of Thread/Question every consumer thinking of hiring the services of an agent should read...........................

I believe it was Fred who wrote,

"Amazing how many agents first thoughts are about "their commission" vs. the "right home" for their buyer."

There's plenty of amazing things to be found in these 719 "answers" to a question that was asked nearly six weeks ago. I suspect the seller has made his decision.

It is sort of interesting how many of us would argue that the seller's opinion of the value of his home is not a valid factor in the market value. But now we are going to argue that how much we want to earn is a valid factor in the commission rate charged.

While forums such as this may not improve the reputation of our industry much, they do provide an opportunity for buyers and sellers to listen to prospective agent's thinking. I rather suspect there are a few who have lost business as a result of their "honesty" here. Vivia the Internet!

This growing "transparency" is one of the more positive outcomes of the web... as at least one other person has pointed out, internet buyers will request information about properties they find on the market based on their needs--not the commission. It would be professional if we all did the same, focused on finding them properties that suit their needs. (One of the biggest complaints I hear from buyers is that the agent they've BEEN working with hasn't listened to their needs.)

Thankfully, we are "killing" the old model wherein the seller pays the buyer's side commission -- it's just dying a slow and painful death. In the interim, sign up your buyer clients at the commission rate you "want" and make them pay the difference. Then prove to them that the laborer is worthy of the hire. That approach negates the need to criticise listing agents for not charging and splitting enough commission. So instead of debating the wrong question we can go out into the field and sell some property.

Sorry, Debbie Rose... I should have been more clear...

I was referring to:
Debbie Walalce-Yaney
Century21 Doug Anderson
661 916-1906
Email: c21valerie@hotmail.com

Hi, Debbie Wallace

Alan is correct.

Making statements about "the regular commission", etc. may be a violation of Federal Anti-Trust Laws.

May I politely and respectfully suggest that you DELETE your post?

------------------------
Best wishes,
Fred
----------------------

Good Alan, now consumers know who not to do business with. If deceit is needed for a simple question imagine how she conducts business.

Alan - so there is no confusion, I am not the Debbie you were referring to......for a minute, I thought I was!! (oh, a mind is a terrible thing to lose!)

... although it does go a long way to explain why Debbie has changed her name...

she WAS posting earlier in this thread as:
~~~~~~~~~~~~~~~~~~~~~
Here is my contact information
Valerie Ong
Century21 Doug Anderson
661 755 3018
Email: c21valerie@hotmail.com

Debbie says: "first of all typically 6% is regular commission ,3% for both sides..."
~~~~~~~~~~~
apparently we don't pay much attention to the "anti-trust" portion of our training, either.

Making a statement like the one Debbie made (especially in writing and on a national website), is a clear violation of Sherman Anti-Trust laws. There is no "typical" or "regular" commission... period. Commission is totally negotiable... nationwide... by law.

It will hurt the sale first of all typically 6% is regular commission ,3% for both sides, if you list any lower than 3% other agents will not show the property, and therefore that will keep the home from getting showings. Also once we get our 3% there are also alot office fees that are taken out of check, therefore when all said and done we really dont make that much money for all the work we do.

Dan, this one doesn't seem to fall under the "you get what you pay for" category, so much as it falls under the "if you bribe the buyer's agent, they will convince their client to buy it" heading.

oh, wait... it doesn't appear to be working.... my bad!

Alan,
Maybe if they offered a 15% commssion to the buyer's agent? And if that doesn't work take it up to 25%. After all, we all know you always "get what you pay for"!!!!

update on that townhome in Evanston... here, 5 days later.. they're still offering 6% co-op commission (only valid t'ill the end of the month)...

and the property still remains unsold.

hmm... increased commission seems ineffective... therefore the opposite....?

I recall answering this question previously, as well. Anything can potentially hurt a sale. On the other side of the coin- would offering a bonus or higher commission help your sale- the jury is out on this question. ANYTHING can help or hurt a possible sale.

Unfortunately, it has become painfully obvious that what once was a simple question from Steve has evolved into a platform for agents to argue the age-old issue of commission. I have already answered the gentleman's question, and would appreciate it if my peers would stick to the point. This began as a Seller looking for professional advice, so can we get the train back on the tracks folks?

I am not a Buyer's agent but after 31 years in this business I know how they work...They don't like to show homes that show a low commission. Therefore I rarely reduce the buyer agent's side of the commission.

@Gladys - Your comment is exactly the reason the public perception of Realtors is poor. By making that statement you give the impression that we are greedy sales people only thinking about our wallets.

Do you really believe that buyers agents only think about selling a home with the highest commission? What about the buyers needs? You are supposed to be working for them right?

Yes, Buyers agents will show the homes that pay the most.

Roy - don't you think listing the property in the MLS - and getting it world wide exposure to buyers thru the MLS sold the property - not the commission -

Roy,
That's amazing. You were really able to sell the house for 575k when your friend the cashier at Target couldn't get it sold at 490k. All because you offered the buyers agent 3%. There has to be more to the story than that.

Dear STEVE
What if your employer or your income source told you that they would LIKE to lower your income to something below what others in your field are getting paid. ?

THE ANSWER IS YES ( depending on how low )
I recently had a sale here in San Diego, prior to listing it my client AND FREIND ! tried to sell the house her self for about $490,000 with no luck due to the fact SHES not a realtor and works at Target as a Cashier.
SHE offered the buyers agent 1.6% (meaning this agent would have to represent her and the buyer) so I KNEW that she would be calling me soon.

I LIED THE HOME home for $575,000 over what she wanted and OFFERD THE BUYERS AGENT 3% of my 6% and it SOLD in less that 2 months we had 15 offers in less than 2 weeks and TO TOP IT OFF she came out a head $22,000 more than she thought WITH the realtors commissions

Theres a house down the street for sale by owner from where I live, hes been sitting on it for almost 2 years and refuses to pay more than 2% and just has a sign in the yard, in the mean time this FSBO that I will get one day is sitting there, no agent shows it and if they do its rare he says, and he just cant figure out why, BEAUTIFUL HOME and for sale on the market no buyers

I SAY when you realize your making more in Mortgage Payments then the realtor commisions its time yo udo the math and hire a PRO

GOOD LUCK!

I am still amazed at the answers agents are offering for this question. Like these statements...

"Some times low commissions houses are very difficult to sell, because if the seller is too greedy to pay commissions, they are also very difficult to negociate with a buyer"
~~~~~~~~~~~~~~
"If you work only for commissions for sure You will always look for the high commissions. "
~~~~~~~~~~~~~~
"Realtors when searching for listings tend to choose properties that have a standard or a better commission rate for the listing. If the commission is to low, buyers realtors tend to leave the property for last choice when showing it to their client."
~~~~~~~~~~~~~~
"The Realtors look at many details and one is to see if they are going to be compensated. All Realtors know what they consider to be fair, and customary. Whether they choose to present a home offered for sale to the customer is up to each individual agent."


Amazing how many agents first thoughts are about "their commission" vs. the "right home" for their buyer.

First of all - all commissions are negotiable. That being said- everyone wants to be paid a fair wage for their work.
As a seller- would you work at your job for less money than a co worker? And if you did agree to accept a lower wage- would you be as motivated to do your ' best' job for that amount- knowing other co workers earn more?

If you cannot afford to pay a full commisssion- consider hiring an agent will offer limited service and allow you to pay for all advertising and marketing. Don't cut the commission to a co op or buyer agent- but absorb the costs of ads and marketing materials on your end. Expect to feel the sting- as sellers don't always realize the costs involved to truly expose a home to a broad market.

My listings are staged, marketing materials created that are fully detailed, a direct mailing campaign is established and we use both print and internet to expose our listings. Time and effort do cost something and if you have an agent working for you that has proven to be successful at selling- you may make up that commission cost by not having to carry the mortgage for months while you try to sell without using all the tools that can help get your home sold.

Consider your options carefully, make sure that you are well represented in your sale and ask for references as to the type of marketing your home will get.

Make sure to compensate the buyer/co op agent with a fair and reasonable commission for your area. Any agent worth their salt- will bring you a buyer. And if you cannot afford to pay a listing agent- consider the option above where you pay for all marketing and hire someone who will provide limited service to you as a seller.
While it's not the best option since selling a home requires a knowedgable and skilled professional- it may allow you to sell if you are in financial trouble and cannot afford to pay for the expertise you need..

Yes It can hurt your sale, The commissions are always negociable, but since every realtor or real estate agent work for commissions, usually the houses with more commissions and bonus are the one's who sells fast. If you work only for commissions for sure You will always look for the high commissions.

Some times low commissions houses are very difficult to sell, because if the seller is too greedy to pay commissions, they are also very difficult to negociate with a buyer, And in this Buyer's market it is more difficult to sell. At the end if you want to save commissions, but you will be in a house for more longer time (paying more mortgage, more HOA and more taxes too) it is like to paying more commissions, than paying at least 3% for each side but selling faster, You will have more money in your pocket. And you can move on faster. Anyway in this market every location is a different story.

Good Luck with Your sale.

MLSes often provide their member/subscribers with statistics about buyer agent compensation and status. If your agent subscribes to http://RealtyMarketUpdate.com they may be able to provide you with a "Status by Buyer Agent Comp" chart for your community. It can be really "eye-opening!" If you want to see a sample of some of their charts check out my blog here on Trulia.

So what's the answer to this question?

Yes, No, Maybe, Sometimes, Depends, Standard %, To many expenses, Need to pay more, FSBO and Flat Fees are the Devils Domain, A good agent would never, A good agent would always.

Glad your still around Steve and hope you are getting as much from your question as the many other consumers who have undoubtedly viewed it.

Thanks for posting it and returning to comment.

NAR was on the right track when it started the requirement of all member taking ethics training every four years. From reading this thread - it looks like the body of REALTORS need it at least every two years - and maybe every year. Article 1 of the REALTOR code prohibits you from putting personal gain above your clients needs -
Also read Standards of Practice 1-13 and Article 15. Steves agent should have disclosed his commission to him.

Now Steve be real - you have computer - did your agent ever refuse to show you house you wanted to see?

Now do lower commission hurt sales NO, NO, NO There are only three things that impact sales Location, Condition and PRICE. If I have a low coop commission I may take grumbles from buyers agent - but the deals still happen.

I don't know what rock you guys are living under but the days of a customer walking into my office and saying this is my criteria show me houses - I pick 5 - they buy one - are long over. Look at sites like this and Twitter

My relationships usually start on the phone or internet about 3 months before they need to buy - Thru the mircle of the internet and IDX - they have access to all active listings on our MLS - they use my website and conversations with me to learn about the buying process, the neighborhood pricing - market conditions - how to get a loan etc. mean while they are narrowing down the pack themselves with drive bys - Once they decide on the neighborhood - we look at EVERY SINGLE LISTING in there INCLUDING FSBOs.

In my 12 years of practice - I have NEVER looked at my compensation until I went over the HUD - or if negotiations were tight - buyer had given all they could - seller have given all they could I and my fellow REALTOR have given up some and in some cases most of our commission to make a deal happen. Because is was the RIGHT thing to do.

I have never lost a deal because of my commission. - and you all need to take a good look a commission and not be so gready. Our industry has tried to get 4-6% sincce the beginning of time. Houses in the 70s went for 20,000 - now even in economically depressed areas they go for over 200K. Think about it.

Here's the perfect "converse" example to answer your question.

There's a townhome in Evanston (where I do business) that is bank owned. The bank decided to listen to many of you who insist that a higher co-op commission will attract more agents, and therefore they will convince their buyer clients to view the townhome, which will result in a faster sale (because after all, Realtors are "human", and "greed" is human.

So they changed the co-op fee from 2.5% on this $217,500 property ($4,350.00 commission to the buyer's side) and increased it to a whopping 6% ($13,050.00)... Certainly that HIGHER commission will help the sale... right?

Well, it has been on for 3 weeks at this new highly attractive commission, has created quite a "buzz" among the local agents, and they have seen zero difference in the number of showings they are getting... zero difference in the number of hits online... zero difference in the number of appointments made through agents.

Zero difference, and it remains unsold.

Put incentives where there work... in the hands of the buyers. Incentives such as "reduced prices", "cash back bonuses toward closing costs... where legal", "credits toward decorating, new appliances, new roof"... incentives to buyers work. Incentives to agents, don't. (in my humble opinion).

I tell my seller No its not in your best interest for me to do that because Realtors sell houses and Let me ask you if the Realtor can sell the house down the street and make $3,000 or sell yours and make 1,500 (or somewhere in between) which would you sell MR. Seller? They get the picture.
Also as David Knox says if you will plan today I'M NOT TAKING ANY CUT COMMISSION LISTSINGS! MAKE A COMMITTENT TO THAT, IT WILL BE EASY TO SAY NO! JUST LIKE IF YOUR SELLER ASK YOU TO DO SOMETHING ILLEGAL, YOU KNOW RIGHT NOW WHAT YOUR ANSEWER WOULD BE, RIGHT, WITHOUT ANY HESATATION. SO MAKE UP YOUR MIND AND STICK WITH IT!

YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES

Pat

I am still here reading all the threads on this topic and want to thank everyone for their input. I'm able to see two (more like 100) sides to the argument. There seems to be much more to the behind-the-scenes of this business than I was aware of. It's an interesting and complicated business and I give credit to the hard working agents out there. Don't care much for the slick ones.

Unfortunately, Fred is right, & I agree with Ralph & Tricia, too. There are many agents who "shop" listings to show prospects by criteria such as commission offered & selling agent bonuses...I'm not a believer in selling agent bonus - why not give it to the buyer(s) to off set expenses? I do believe sellers/listing agents may jeopardize the saleability of the subject property by offering lower fees & splits.

Yes it does. There is not enough exposure from buyers realtors due to the low amount of commission offered. Realtors when searching for listings tend to choose properties that have a standard or a better commission rate for the listing. If the commission is to low, buyers realtors tend to leave the property for last choice when showing it to their client. The average commission to sale a property is 6%, 3% for buyers agent and 3% for the listing agent. Anything below standard commission can hurt the listing and consequently hurt the sale.

I agree with Ralph & Tricia of AZ; I always offer 3 % CSB regardless of what I negotiated with the seller.

I recently sold a condo in a 55+ community where there are hundreds of identical units for sale. I got the listing after another real estate agent had it for 6 months and was unable to sell it. I got it sold in one week. The seller and I discussed the list price and after I showed him comparables he agreed that it was best to lower the price to be one of the lower priced condos and also took my advice in offering a higher commission. Initially, he didn't understand the reason for doing this, but when I explained to him that there were hundreds of other identical units for sale the thing that would make his unit stand a part from the others would be the higher commission. He may have paid a little more at closing, but he saved himself almost $400 a month in condo fees. At that point, he already spent $2,400 in condo fees from the previous 6 month listing. Sale prices are continuing to go lower so my advice is to sell as quickly as you can. That means good pricing and great commission. Take a look at my website for more information and you can also contact me through it - http://www.BuySellBoca.com. Good luck!

The thread that never ends. A lot has said about buyers agents that shy away from lower than "normal" commission splits. What I haven't seen is any comments about listing agents that take discounted listings and then expect the buyers agent to absorb their lack of backbone. If I take listing below 6% I still offer a 3% co-broke and I absorb the lower commission. To put a listing out there at 2 or 2 1/2% is doing a disservice to my client.
I wonder how many clients are aware of the fact that their agent is low balling the buyers agents and thus hurting their chances to get a sale. Http://ralphandtricia.com

I agree with Fred. Here in CT you can also set criteria for buyer broker commission on the MLS search.

It's a shame that agents do that, but I am sure it happens frequently... It's human nature to want to make more money right?

I am a flat fee broker and encourage all my CT sellers to offer competitive co-broke commission. Some even offer more than 3%. I want to see them succeed and can't control what other agents do. I have nothing to gain in advising them to offer a high co-broke because we don't sell the homes we list, we only list.

One of the MLS Systems that I belong to, has a Search Box for Realtors that includes these choices:

Search by:

- Buyer Brokerage Commission

- Transaction Brokerage Commission

- Non-Representative Brokerage Commission

-----------

Whether people think that it is unethical, immoral, unfair, or unprofessional does not matter.

The Fact is, many Real Estate Agents will skewer their Showing List based on the cooperating co-brokerage commission split that is offered to the Selling Office.



SELLERS must be certain that the Listing Broker is offering an acceptable split in the MLS.
If that amount is not equal to or greater than "the going rate", there may be Real Estate Agents who will pass over that property.



-----------
Best wishes to you,
Fred
---------------

The buyer looks at the price of the home and the properties details, when viewing the home offered for sale. The Realtors look at many details and one is to see if they are going to be compensated. All Realtors know what they consider to be fair, and customary. Whether they choose to present a home offered for sale to the customer is up to each individual agent. But if a buyer finds a home they want to see and present it to their Realtor, you bet they are going to show it.