Home Selling in Seattle>Question Details

Doug Branch, Both Buyer and Seller in Seattle, WA

What's the current market rate for a listing on a $700k home in Seattle?

Asked by Doug Branch, Seattle, WA Sun Jun 24, 2012

I'm talking about total commission (Buying and selling agent). I've heard anywhere from 3% to 6%. Although I think we all know that 6% is out of the question these days.

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All commissions are negotiable, and nothing is "standard". The 6% would often be the total cost of commissions in many transactions and split between the buyers agent and the sellers agent. Commissions are just one part of the total cost of sale, and that should never be your "determining" factor.
1 vote Thank Flag Link Sun Jun 24, 2012
Doug,
Lots of good comments so far, the most important being that there is no standard fee and 6% may not be out of the question.
Realize that as agents we do our work listing a home up front, no charge to you at all if we don't successfully find you a buyer. If we misjudge our client’s intentions and do a significant amount of work only to discover after staging, photos, marketing materials, printing, open houses etc that you are not truly motivated and willing to participate in whatever is necessary to sell your home, we walk away with 100% of nothing.
A great agent will assess your motivation and your realistic assessment of what it will take to be successful. If they don't, you should reassess whether you have the right agent. If all you get is a sign in your yard, some lousy pictures and a black and white flyer off the copy machine, you are correct, 6% is way too much.
A great agent is worth more than whatever commission they charge. Our job is to put your needs first and help you get top dollar in the least amount of time with the right amount of preparation. A bad agent will cost you more than just a commission, in fact I could point out examples where seller's either didn't take their agent's advice or the agent didn't give them the right advice and tens of thousands of dollars were lost. In this market, which I believe is getting better, don't be penny wise and pound foolish. Commission amount is important, but whatever amount you agree to pay your agent, make certain you get your money's worth or it will cost you time and money.
Best of luck.
1 vote Thank Flag Link Sun Jun 24, 2012
Hi Doug, I agree with Ray Akers about the commission. You will get what you pay for. Reduced commission = reduced service. You may not be aware that the commission you pay does not all go to the broker. For example the listing broker will spend a significant amount of money on marketing your property, paying fees to the MLS, class fees for continuing education, taxes etc. All that it takes to be a broker these days. Then part of their commission goes to their broker at the office that they work for. I for one take my job very seriously, this is how I feed my family. I don't know what you do for a living but I bet you would not like it if your boss asked you to do it for a discounted amount of money. I notice Bonnie Beddal below mentions some of these costs incurred as well.
There are a lot of homes right now that are selling quickly & getting multiple offers. You will need a good broker to handle all & any issues that come up. I think we all know that the general rate is still 6% and is money well spent.
1 vote Thank Flag Link Sun Jun 24, 2012
In a typical listing agreement, a commission is provided for the broker that lists the property, and for the broker that sells the property. So, you're dealing with one listing agreement, which compensates two brokers for their services. It's common for there to be more variation in the listing portion of the commission, compared to the selling portion of the commission. That's because it makes sense to offer an attractive commission to the selling agent. Offering the selling agent a low commission could discourage some agents from showing your listing.

In Washington State, real estate commissions are negotiable. In my experience, I've seen real estate commissions vary by as much as 4% between discount brokers and full-service brokers. Among my own listings, commissions vary from client to client, and from property to property by as much as 3%. It all depends on the circumstances, the property, and the client.

When it comes to hiring a real estate agent, experience makes the difference. Choosing an agent based on how low a commission he or she will accept isn't the best criteria for picking an agent. The best agents are usually not available at a discount rate. That's because they have earned a reputation for excellent service, and their clients are willing to pay more for their services.

(Tip: Talk to family and friends; ask them for the name of an agent with whom they've had a positive experience. An agent that you meet through a personal referral will most likely offer you a fair commission because they value the referral.)
1 vote Thank Flag Link Sun Jun 24, 2012
Keep in mind that due to antitrust laws, commissions are negotiable; there is no set rate. So the great folks answering your question here are talking about what they typically see, not something that is an absolute. What I am actually seeing is less and less discounted or reduced commissions. This is because real estate transactions are now so complex, even more so than just a couple of years ago, there is a much higher level of skill and expertise required to guide people through the sale process. There is a higher number of distressed properties (short sale and bank owned) that have issues, lenders have stricter guidelines, especially with condominiums and if a broker isn't proactive or doesn't keep up with the latest trends and issues, the sale can be derailed. So is 6% out of the question? I don't think so. I have even seen 7% and occasionally higher. With a good broker, the commission is well worth it, saving you time, money and aggravation. If a doctor was going to perform surgery on you, would you ask them to discount their rate? How about an attorney that was to defend you in a lawsuit? It's important that you sit down with a broker that you intend to use, and ask them how they work. Take the time to develop a good business relationship. Ask them to explain to you all the things they do, and where the commission money goes. The commission is split in many different ways, so your broker actually nets far less than you think they do after they pay all of their expenses to get you the highest and best price and terms possible.
1 vote Thank Flag Link Sun Jun 24, 2012
Rates vary by agent and sometimes by firm. There is no "current" rate.

Not sure though why you would think 6% is out of the question.
1 vote Thank Flag Link Sun Jun 24, 2012
The whole process would be made so simple if homes were a commodity; but they aren't. Take a look at the number of $800-900 K homes available on Queen Anne right now and let us know what is out of the question.
1 vote Thank Flag Link Sun Jun 24, 2012
Out of the question? You must be kidding. Maybe if your home has been completely restored and professionally decorated, but to spend weeks or months working with you to get the home market ready, keeping you on top of things while the house in on the market, then fending off the buyer's agent who wants every item on the inspection report attended to AND MORE . . .

I do not cut with the old saw, "You get what you pay for." But I do believe that you can't expect to get MORE than you pay for. Then again, if you can't discern quality, why pay for it?

All the best,
1 vote Thank Flag Link Sun Jun 24, 2012
Just remember get too little in commission on your listing, and no agent will show it, home of that price will take a lot of work to sell, out of pocket expenses by the listing agent, and again buyers agents don't work for nothing. So remember why you use an agent, what they can bring to the process, get one that normally sells that price a home, and reward them for the work they do. Or try selling it yourself and find out what it really takes.

Best to you, I see all prices of homes, in all kinds of markets, and the upper priced homes, it's an art to sell.

HLR
1 vote Thank Flag Link Sun Jun 24, 2012
@Barb Korducki - I agree with your recommendation that home sellers get some education. Someone who says "I think we all know that 6% is out of the question these days", isn't understanding the value behind the commission and may not understand what goes into listing and selling a property. I think there is room in this market for all kinds of commission models. But even if a home goes under contract in only one or two days - does not make it an "easy' transaction for listing or selling broker. There might be many negotiations during the contract period that go on, repair issues to deal with - especially big sewer issues I have seen lately in older Seattle neighborhoods. Getting a home under contract is only a part of the job that listing broker does for seller. One interesting trend popping up lately: a few brokers going to a "bill by the hour" model similar to attorneys. I talked to one agent who does this and she says that it typically works out very similarly to a "full commission model" more often than a "discounted" commission model.
0 votes Thank Flag Link Mon Jul 2, 2012
I don't agree totally with the agents below. I work really hard for my money and in most instances, I charge 3% for the listing side and 3% for the selling side. However, there are some homes that are so well located, presentable and well priced that they will sell in a day or two. A tudor in Bryant, a stylish craftsman in Greenlake.

While there is a lot of expense and planning up front, there needs to be some flexibilty there. If the home is underwater at $700, it requires conversations with the lender prior to listing and an agent who is a certified distressed property expert can help with that and work with the lender to get an approved price and paid at closing.
The Phinney Neighborhood Assn. has classes for future home sellers a few times each year.
Web Reference: http://www.barbkorducki.com
0 votes Thank Flag Link Mon Jul 2, 2012
Here's something for you to consider. I know there are agents out there that are willing to list your home for very low rates. For them it is a business decision to take a loss on your house at that low rate. But, they have their own motivations for doing it. Typically, those motivations are trying to increase their visibility in that market, trying to get more listings in a neighborhood, or more likely just trying to use your listing as leverage to pick up buyers where the buyer isn't going to haggle with them over the buyers agent commission. It's that simple. If they list your house for a low rate and do the cheapest work they can to get it on the market now their motivation is to NOT sell your house because every day it is on the market they can try and pick up a buyer for some other house that will pay them 3%. So, now they have two clients one paying them 1% if it sells and potentially generating additional buyers the longer it stays on the market and one paying them 3% for a close.

I guarantee you in that situation your listing agent is not working to sell your house.
0 votes Thank Flag Link Mon Jun 25, 2012
Typically it's 6% total commission- 3% for listing agent and 3% for the selling agent. Remember that each agent gets a portion of that 3%. Most brokerages take half of that 3%. The seller is responsible for paying commission. If it's a short sale situation, you're still looking at 6% generally, split between a listing agent, selling agent and short sale negotiator. Also, there's 1.78% for excise tax. If you're selling, it would be safe to back out about 8.5% total for escrow, title, recording, etc. to figure your net proceeds. Your agent can probably show you the numbers for your specific house. Good luck!
0 votes Thank Flag Link Sun Jun 24, 2012
Claire, I liked the thoroughness of your reply. Please post your email address/phone if they allow. Thanks!! Linda scribe7777at msn.com
Flag Wed Apr 3, 2013
I am not in Seattle, so I can not speak to the market in your price range, but I suspect that your brokerage choices are similar to what is found in my area. The listing and selling parts of a commission are distinct from one another.

Listing options include:

Entry only - agent lists your property on MLS. You do everything else (stage, photograph, advertise, show, answer questions, negotiate, renegotiate, etc., etc.). Up front fees from $200 (basically data entry only, you provide info to agent who inputs into MLS) to $500 (agent will come out to gather and verify info to put on MLS). Gives you exposure and ability to offer compensation to local agents through MLS and exposure to potential buyers through agent/broker web sites using MLS IDX feed, as well as Realtor.com, Trulia, Zillow, Yahoo, Google, etc. through syndication from MLS.

Flat Fee - listing services offered in pre defined packages or a la carte for set prices, payment can be all or part up front and/or at closing. Widely varying prices. Can find what seem like exceptional deals ($1000 "full service" listing), but need to be aware that some agents will treat these as a loss leader to use as a lead generator for buyers to represent in buying other houses and, as such, it is not necessarily in agent's best interest to see your house sell.

% Commission paid at closing - agent receives % of the sales price paid at closing. Total commission varies depending on services and price of property. Can get essential services around 1%, for 3% in a high price range may include staging, cleaning, home inspection, premium advertising, professional photography, catered open houses, etc. Can also be used as buyer lead generator, but since agent only paid at closing ,incentive is to sell listed property.

Buyer's Agent fee:

In my area, typical buyer agent fees range from 2.4% (largest county due to historic 60/40 split of typical 6% commission in favor of the listing agent) to 3%(the rest of the metro area). A true buyer's agent(emphasis on agent and the fiduciary, best interest of the client meaning that has) will not be swayed by how much is offered, they will have negotiated their fee with their client up front and explain what is offered and how it affects the client if the property is appropriate. A buyer's "salesperson" (whose emphasis is on their self interest and will steer their "client" to the property with the highest commission) definitely will be. I find 2.5% to be a reasonable amount to offer on most properties. If you think it is in your best interest given your local market to entice the salesperson type agent, offer more than the typical amount in your area. With buyers doing so much of their own searching for properties and not relying on agents, overpaying the buyers agent is not as effective as it once was.

The market in my area requires that your property be in good condition, show well and be priced competitively given current comps. Combine that with good exposure (professional photos of de cluttered, well staged home, well written description, attractive virtual tour or web site) on line in places where active buyers are searching (agent/broker web sites, Trulia, Zillow, Realtor.com. Google, Yahoo, etc.) and the ability to evaluate and negotiate offers, inspections, repairs, etc. and you should be able to get your house sold in a reasonable time for a reasonable price. Figure out what services you need, find an agent you feel comfortable dealing with who offers those services for a fair price and reach an agreement that is clear to both sides regarding expectations, incentives and compensation.
0 votes Thank Flag Link Sun Jun 24, 2012
As a buyers agent, I would prefer to show a home where I would make 3% vs 2% or 2.5%. As a seller I would want to sell as quickly as possible, and be willing to pay the 6% at a minimum... You might consider adding a bonus to a 5% commission, that will help, and you might come out less than 6% that way. But your goal is to sell the house, with the way the market is I might be willing to go to 7% to make a quick sale more possible. Most buyer agents I know will avoid showing a house that will only net a possible 2% commission, when the market is saturated already... The question is, how bad do you want to sell?
0 votes Thank Flag Link Sun Jun 24, 2012
Give me a call and lets get your home listed. I am a full time real estate agent and I can meet with you pretty much any day of the week and I always answer my phone. Hope to hear from you soon.

Alain Picard
Better Properties - Fife
5121 Pacific Hwy E Suite E
Fife WA 98424
Ofc: 253-922-6220
Cell: 253-861-7386
apicard88@yahoo.com
0 votes Thank Flag Link Sun Jun 24, 2012
You are getting good advise. Aside from avoiding discounted service, the most important thing is to pick a broker who lives and works near your home. The attention, service, and local knowledge you get is directly related to how close they are.

If you or someone you know would like help with Real Estate, please give me a call.

Brett Frosaker
Designated Broker
Columbia Real Estate Group
http://www.frosaker.com
RBI - Realty Brokers Inc
http://www.rbibrokers.com
206-755-7858

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0 votes Thank Flag Link Sun Jun 24, 2012
Standard is 6% but you can find professionals that will do it for 4.5-5.5%. Most professional agents with good experience will charge 5%-5.5%. Please let me know if you want a dedicated agent that does full service listing at discount.. I have multiple years of experience and this is what I do fulltime. I can elaborate further what my company and I do for a listing if you contact me. Good luck!
0 votes Thank Flag Link Sun Jun 24, 2012
6% is by far and away the most common in Seattle, though there is officially no standard commission percentage. You never want to pay the buyers agent less then 3%. If the sales price is over $1,000,000 you can get away with a little less and still have agents excited to show your home, but like everything in life, you get what you pay for.
0 votes Thank Flag Link Sun Jun 24, 2012
The total commission is indeed still typically 6%. This is then divided between the selling and listing offices, and then between each office and the listing broker and selling broker -- in other words, a 4-way split of the 6%. But yes, the typical commission paid by the seller remains at 6%.
0 votes Thank Flag Link Sun Jun 24, 2012
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