Michael
One of the common misperceptions that home sellers have is that by paying a lower commission they will net more at the close of escrow. Your profile says that you are a home buyer, so I am not sure where your question orginates.

Most top Realtors work for at least market rates. That means that if you are being represented by a great Realtor in the purchase of a home, it is likely that you signed a representation agreement which may include a minimum commission rate for which the Realtor will work.

That means that if a seller is offering a commission lower than the standard for your Realtor, you may be asked to either help out with the commission, or you may be informed by your Realtor that they are going to put the seller on notice that you are interested in a particular property, but because that property is being marketed at less than their commission rate, they are requesting that the seller reconsider the amount of commission, or they may not show you the property.

If this does not answer your question please re-post.

Michael,
You need the cooperation of every buyer's agent out there. This said, offer 2.5% so you do not exclude anyone. half a percent is short money to keep them happy.
All the best,
James Joseph
The R/E maven

Hi Michael,

The commission that a home seller pays is typically divided to two agents -- the listing agent representing the seller, and the buyer's agent. 2.5 to 3.0% to the buyer's agent is competitive. In the higher brackets, $1M+, 2.5% is more common than 3.0%. 2% is not competitive.

The portion going to the listing agent covers all marketing and representation to the seller. Keep in mind that everything that a listing agent spends on your property is "at risk". They don't receive a nickel if your home doesn't sell even if they spend several hundreds/thousands of dollars marketing your property plus their time spent servicing your listing. Agents who spend time and money with a client will only do so if they believe they will eventually be compensated.

So, in a challenging sellers market, I doubt that you'll find a successful, "top tier" agent that would take on a 2% listing. There are definitely agents who will take 2%, however, since the minimum cost required to market a home is pretty low (i.e., just put the home in the MLS). With any agent, note that the standard language in a listing agreement requires that *both* parties must agree to terminate a listing. So, if you aren't happy with your agent after a month or so, then you could be stuck with them for several more months.

Good luck.

Is this for the listing side only? Or overall buyer and sellers agent?

Per side, 2% is very low for a top-teir agency. 2.5-3% per side is more likely. However, agents are more likely to reduce the rate on a higher priced home (over $500,000) and/or when you are buying another home with them.

Commissions are negotiable. In my opinion you need to know what the Realtor will be doing for the commission and the Realtor needs to know what you expect for the commission you will pay. There is an old saying that it is unwise to pay too much for something but it is also unwise to pay too little. You and the Realtor need to decide if it is reasonable based on both of your expectations.

I would say probably not.. I know for myself when listing properties, there are a lot more costs going into the the sale than ever before. Unless you negotiate with them that they only do barebone minimum advertising. But then if you look at your cost savings over the .5-1% and you end up having the house listed for longer and thus ultimately accept a lower sales price, you might see you are not saving anything..
Just something to think about.

Hi Michael,

Commission is negotiable. Most likely, if you are paying 2 %, you are using a "discount" broker. If so, be really careful--unless you have a "discount-type" property, you should speak to a full service broker and compare. With that said--if your property is over $1M, then a 2% commission is not entirely out of the realm of possibility. LDevnew@cbmove.com