Home Selling in Rochester>Question Details

Laura Thomas, Home Seller in Rochester, MN

We are selling our house, what % should we give our realtor & are the buyer's realtors paid out of that too?

Asked by Laura Thomas, Rochester, MN Tue Jul 1, 2008

What about all the other fees? We don't have a ton of equity...

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Thomas McGiveron’s answer

One thing to keep in mind - a "BUYERS AGENT" works for the buyer. They charge their own fee. To keep this simple - if your agent and yourself negotiate a 5% commission - split 2.5% / 2.5% - paying "in" to the listing broker (your realtor) and "out" to a selling agent (the one who brings you the buyer). This occurs most frequently in the business.

Anyhow - with a "BUYERS AGENT" - their fee for service may be higher than 2.5% - and most likely will be 3%. This 3% is paid within the transaction. So keep in mind that the 5% you negotiate with your real estate agent, may turn out to be 5.5%, because a BUYERS AGENT's fee may be more than 2.5%.

Now agents will tell you that it is the buyers responsibility to pay their own agent - this is true - HOWEVER - there's no need to "panic" or get upset about this fee. The fee is built into their offer - just make sure that the "extra" fee is built into what you accept as an offer.

Asking Price $100,000

Offer Price $80,000

Buyer Agent Fee = 3%

You negotiated with your listing agent for a 5% fee (split 2.5% to each broker) - thus an "extra .5% or $400 in this case - So you don't want to have that come out of your pocket - so your counter offer should be "X" PLUS $500 or so built into the deal. So ultimately the buyer IS paying their BUYER AGENT fee. Simple.

Your listing agent only has control over what he is getting paid ultimately. In the case of "broker agency" - an agent BY LAW is supposed to be working for YOU - so they will receive whatever your listing agent is "paying out".

Hope this doesn't complicate things for you. Just be prepared in this market for anything.
Buyer agency is very popular in this market.
Web Reference: http://www.tommcgiveron.com
1 vote Thank Flag Link Tue Jul 1, 2008
Whatever you give your Realtor, it should be shared in some way with any other Reatlor involved in the transaction. Make sure your Realtor explains how much she/he is keeping and how much is being given to any other contributing Realtor.

Every Realtor charges what they perceive their value to be. Ask to see a written Marketing Plan to know exactly what they are going to do to market your home. As powerful as MLS is, there are literally dozens and dozens of other internet locations in which to market your home and all should be utilized to get the best exposure.

And don't forget, the Realtor you choose should be taking not only photos, but a full virtual tour and all should be posted on every website possible.

In the current market, if you do not have to sell, don't. If you do have to, price it right to sell; you will never get what you need, but only what the market can bear.
Web Reference: http://GailGladstone.com
1 vote Thank Flag Link Tue Jul 1, 2008
Laura, Thank you for the question. The percentage is negotiable and for the most part is 6% and split between the selling and buying brokers. Advertising becomes why the the percentage is generally at 6 and some have now gone to 7%. If I may be of assistance feel free to contact me.
Thank you, Ray
0 votes Thank Flag Link Tue Jul 1, 2008

You should interview 3 Realtors and negotiate commission with them. The total commission you pay to your agent is split between the broker they work for, the buyer's agent, and the buyer's broker. So, you only pay one commission. Your other fees will be your closing costs. When you are interviewing Realtors you can ask for a seller's net sheet which will help you figure out how much you will need to close, based on a specific selling price.

Good luck!
0 votes Thank Flag Link Tue Jul 1, 2008
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