Home Selling in 60137>Question Details

hyott, Home Seller in Glen Ellyn, IL

What is the commission rate for realtors?

Asked by hyott, Glen Ellyn, IL Sun Mar 10, 2013

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In my area of TN, 6% is usual but the house prices can be a lot lower than other areas of the country. I agree that the lower the commission you seek and agree to, the lower the service will be. Don't forget that usually, any marketing a listing agent does on your property is paid by the agent so they are making a huge investment in selling your home and if the house doesn't sell for whatever reason, the agent loses not just all their marketing dollars but do not earn a commission.
In saying all of this, you can negotiate the commission rate with your Realtor.
0 votes Thank Flag Link Mon Mar 11, 2013
Ron brings up a great point. While there is no "standard" commission, you also need to keep in mind that if you are selling a property, the charge you are paying, first of all is usually split between the sellers broker and the buyers broker (this should be spelled out in your listing agreement, and is not always a 50/50 split, as Gregory points out).

In addition, the agent who is listing your home for sale will have to split that commission with their office broker. On top of that, the agent will have to pay self employment tax (at 15%) and state and federal and state income tax (varies depending on your state, but averages somewhere around 30%).

So yes, the commission may be a large number but only a fraction of that ends up compensating the agent for his or her time.

Keep in mind that you get what you pay for, and if you only shop for the lowest price, you will probably get the lowest level of service, and that may be ok for what you are trying to accomplish. However, if your goal is to sell the house quickly and net yourself the most $$, interview the agents and find out what they will do to earn their commission.

Lastly, for the record, I'm exclusively a buyers agent, so I'm not soliciting your business.
0 votes Thank Flag Link Sun Mar 10, 2013
I can only speak for myself. I charge 5% total commission on the average listing to be split equally between the listing and buying real estate companies. Sometimes I get the seller to agree to 5.5% and offer the buyers agent 3% at closing of course. Most times you will get much more activity when you offer a higher commission. I wouldn't select a Realtor because of the commission rate. So many things are more important than the commission such as what separates your home from the comps in your area, are home selling and how long it takes to receive an acceptable offer, how solid are the buyers those are just a few concerns there are many many more. The most important number is what you will walk away with at closing.
0 votes Thank Flag Link Sun Mar 10, 2013
Commission is always negotiable between you and your agent, there are no set standards as it would go against federal laws; therefore interview a few agents from different realty companies, then choose the one you like best and who has the most to offer. Choose your agent with care and not by commission alone.
0 votes Thank Flag Link Sun Mar 10, 2013
Often it is 1/4 of the total commission, by the time it is divided 4 ways.
We cannot comment of the agreed commission; the Government considers it collusion and restraint of trade for Agents to discuss it openly. (or some such violation.)
Attorneys cannot discuss it either.
0 votes Thank Flag Link Sun Mar 10, 2013
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