Home Selling in Cambrian>Question Details

Trulia San J…, Home Buyer in San Jose, CA

Is it standard practice for agents to have a different set of commission rates depending on the type of business the relationship requires.?

Asked by Trulia San Jose, San Jose, CA Fri Mar 15, 2013

(i.e. just selling a home vs. selling and buying a home).

Help the community by answering this question:


Mack McCoy’s answer
I charge more for selling AND buying a home, especially if "we" are going to be looking for houses for several years while hiring architects and getting bids on remodels and second-story jobs.
0 votes Thank Flag Link Mon Apr 1, 2013

Circumstances, more than anything, affect the commission offered to both the selling (buyers) agent and the listing agent. Short sales, for example, are notorious for slicing agent commissions with the precision of a box cutter, so it makes sense to go for the highest possible commission with the knowledge that the bank is going to cut the commission.

Yes, all commissions are negotiable, but many times the larger brokerages do set the commissions that will be charged, and then leave a small bit of discretion for some reduction in commission. For those of us who work for an independent or low cost brokerage, we can afford huge discounts for our buyers and sellers. Lower commissions does not equal less skill, ability, or marketing power, but simply reflects a cost that the agent must cover before making profit.

On the other hand, there is a growing number of us--buyers agents--who give commission rebates to the buyers. So while the commission offered to the selling or buyers agent is set by the listing agent, the buyer also has negotiating power with his/her agent as well.

So yes, commissions due vary based on size of brokerage involved, cost structures for the agent, type of industry (residential versus commercial property) and the job involved. So it's best to find the best combinations for your particular needs and feel free to ask all agents about commission negotiations.

Grace Morioka
Allison James Estates and Homes
1 vote Thank Flag Link Fri Mar 15, 2013
Seriously trulia - come on................why ask such a loaded question?

You should know agents are supposed to refrain from discussing commissions.

There is no "standard practice" when it comes to commissions!!!!

Shame on you........although I must commend everyone here who did refrain from specific responses in regard to their commission structure(s).

The only answer is - all commissions are negotiable.
3 votes Thank Flag Link Fri Mar 15, 2013
You know very well that we are not allowed, BY LAW, to discuss commissions in an open forum:
Why do you do this to us?
3 votes Thank Flag Link Fri Mar 15, 2013
you are right, and I don't understand why trulia is stirring the pot with thi sloaded question!
Flag Fri Mar 15, 2013
First of all there are no standards, period it is that simple, commissions are negotiable.... How Brokerages structure their listing commissions is completely up to them and for the selling public to
agree and accept in each individual case based of course on the various services performed.

Good Luck to you

Sincerely yours,
Edith YourRealtor4Life & Chicago, North Shore & Northern Illinois Expert
Working always in the very BEST interest of her clients, Buyers, Sellers and
Investors alike....And always with a SMILE :)

Covering for @Properties Chicago & suburbs, and with her trusted Partner
Agents US & world wide properties. French, German, some Spanish &more EdithSellsHomes@atproperties.com or EdithSellsHomes@gmail.com
Check out my website at http://tinyurl.com/YourRealtor4Life
Get to know me! Learn about my experience, expertise, services! Read letters
of recommendation! Sign up to search for properties in my expanded service area.
2 votes Thank Flag Link Fri Mar 15, 2013
Ron's response below puzzles me. I will not advertise what I charge but am happy to answer the question. For most Realtors, the commission fee is set by their brokerage. For those who are independent, you have greater flexibility.

I have, at times altered my commission structure, either when dealing with someone in extreme hardship, or a repeat customer.
2 votes Thank Flag Link Fri Mar 15, 2013
As you read, commissions are negotiable. We are prohibited from quoting fees because it could be construed as price fixing. So, no, there is not a STANDARD.

ANY professional business will provide you with a list of their fees.

In real estate this could vary by type of property, such as single family home, land, mobile, etc. It could be by price point. It could be by level of service. It could include a minimum, or flat fee.
Web Reference: http://www.terrivellios.com
1 vote Thank Flag Link Fri Mar 15, 2013
COMMISSIONS ARE ALWAYS NEGOTIABLE!!! REGARDLESS OF BROKERAGE. And yes, even on the same listing a different commission rate may be agreed upon depending on multiple factors. E.g. we usually agree to lower the commissions if a rental property is being purchased by the tenant.
Web Reference: http://talisrealestate.com
1 vote Thank Flag Link Fri Mar 15, 2013
Real estate commissions are always negotiable. Industry standard is 3% for listing and selling each. Talk to your realtor prior to engaging in their professional services.

Amit Singh
0 votes Thank Flag Link Fri Feb 21, 2014
circumstantial, but keep in mind, you get what you pay for.
0 votes Thank Flag Link Sun Feb 2, 2014
Simple answer...yes.

Commission rates are negotiable and can vary depending on many factors...region also being a factor.
Web Reference: http://www.bahiafear.com
0 votes Thank Flag Link Thu Jan 30, 2014
Commissions are negotiable. For instance, for our investor we only charge 1% listing fee when we
re-list and re-sell their home that they have purchased with our for a flip.

Good luck.
0 votes Thank Flag Link Tue Aug 6, 2013
Every business and every person has a target for what they want to achieve. That doesn't completely imply there is a standard practice. Selling your house or buying one for you probably won't be the same as for your neighbor. Different agents will have different strategies. The price for their efforts will be based on what they plan on doing and their perception of the likelihood for success.

I not long ago listed a property for sale and achieved great results for the owner. He told me a little about an offer another top agent had made him if he would list with that agent. With a little thought the offer clearly created a conflict of interest. The agent had a strong incentive to sell the house at a low price. I sold the house for $300,000 more than the other agent thought he would.

The commission rate, though important, isn't the most critical part determining your profits. Be focused on achieving the best results rather than telling the professional how she has to achieve the results.

Juliana Lee
Top 2 agent nationwide at Keller Williams Realty

Over 30 years experience
Over 1,000 homes sold in Santa Clara and San Mateo counties.
Web Reference: http://julianalee.com
0 votes Thank Flag Link Mon Apr 1, 2013
I'll answer your question the way I do business.... Normally I ask for 6% commission working with the Seller. Explaining that as the selling agent I'll get 3% and the buying agent will get 3%. As the market heats up and as warranted I would consider lowering the commission by 1% off the 6% total. Seller need to know that you get what you pay for. Find out what services they are offering to market your property to warrant the commission.

I have in the past double ended deals where I have represented the Seller and Buyer. I requested the permission of both parties (Seller and Buyer) since I have a responsibility #1 to the Seller since I work for them in the listing of their property. Why? Think about it, your the Seller wouldn't you expect the agent to have your best interest in the negotiations be their #1 interest. In these cases I would lower the commission. Should the Seller say no to the double ending of the transaction I refer the Buyer to another competent agent to work with them on the transaction.

Working with the Buyer(s) the commission comes from the Seller and posted in an agreement on the percentage or dollar amount.

One thing to keep in mind, commissions are negotiable. But again as a Seller you get what you pay for. Shop around interview 2 or 3 ask questions.... interview them like they will be interviewing you.

Selling and Buying a property is stressful enough, but having someone working for your best interest can make the process and every little detail stress free as possible.

Hope this answers your question.

Michael Drljaca Realtor Alain Pinel Realtors Los Gatos 408 930 9922
0 votes Thank Flag Link Fri Mar 15, 2013
It's been said below, however another way to think about this is, in the business you are in, does the profitability vary by customer? by bid? Whether it be medicine, building homes, installing computers, repairing a car, etc... profit varies often by assignment for a variety of reasons. Competition, difficulty of task, risk of failure on task, size of total sale, etc...

Real estate is unusual compared to most businesses because #1 we can work on an assignment for months or years and not get paid one penny and #2 we publish a rate as a % of sales price.

I'm not sure your question is clear to me. When you say "depending on the type of business the relationship requires", are you saying selling a commercial property vs. residential? What do you mean by "type of business"?

Stu Carson
0 votes Thank Flag Link Fri Mar 15, 2013
Cindy, that was a very thoughtful and considerate response.
Both Cindy and Edith articulated in their way, that compensation is variable/negotiable based on what the situation requires.

Some use hammer real estate practices...(every situation is a nail and get the one and only solution) while others are free to conform to the circumstances of the moment.

The unfortunate side of this is the confusion this injects into the market as consumers attempt to find the truth. They may hear others repeat the echos they thought they overheard as 'compensation' but they do not hear nor are the capable of finding out if the consumer was buying a KIA or the 'Ultimate Driving Machine'.You will get that for which you pay.
0 votes Thank Flag Link Fri Mar 15, 2013
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2016 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer