Home Selling in Rhinelander>Question Details

Angela, Home Buyer in Wisconsin

8% commission?

Asked by Angela, Wisconsin Sun Oct 9, 2011

I saw a realtor on this site post that commission was 3% but I have been quoted 8% in my area. Is this something that is negotiable or region specific?

We will be selling/listing our house in the next month (moving). We have only owned it for 3 years and you all know what the market has done in that time so there is very little equity. We don't need to make money on the house at all, just remove the financial obligation. I have been thinking that an 8% commission would prevent us from have a super competitive price.

If commission is negotiable, how do you find out and go about negotiating that? Because at 8% we are FSBO...

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12
Kathy Dolch’s answer
Commission does vary. The typical is 6% and half goes to the selling agent. However, if the property is very inexpensive, there is sometimes a minimum a brokerage could charge, which sometimes could be up to 10%. Commission can be negotiated if there is good reasoning. It is always best to express concerns up front and be open and honest. Most listing agents, if they have a good business model, often invest quite a bit of money into advertising and marketing their listings and their business. For most properties however 6% is about the norm. If the property is vacant land, commercial, or pretty inexpensive, sometimes that may not be the case.
0 votes Thank Flag Link Thu Feb 23, 2012
Hi Angela, it would be 3% for the seller's agent and 3$ contributed toward the selling agent, so you're likely to see 6%, and in a very competitive market it may be preferable to go up to 7% split instead, to entice agents to show your home.

Have you found a more reasonable agent yet?


Mark Fleysher

http://www.jackconleyrealty.com
0 votes Thank Flag Link Fri Oct 14, 2011
Wow, 8% is very high related to commission! There are lots of good and competent agents out there who would bend over backwards to assist you at a reasonable commission rate, plus offer short sale option assistance if needed and if you qualify. Simply, interview agents and tell them what you will offer as a reasonable commission. A 6% commission split equally between seller agent and buyer agent makes sense given your financial situation with the house. Good luck!
0 votes Thank Flag Link Tue Oct 11, 2011
Hello Angela
I, as a realtor, think that 8% is high. It is negotiable in this market. I would say that 6% is he normal. From that everyone gets paid. Your listing agent pays the buyers agent from the agreed amount. Make sure you ask what they are doing for that commission. Often times when you hire a discount you get exactly that. Somebody who is going to advertise online, locally, and take the time to hold opens and brokers tours is earning their keep. Advertising comes out of our pocket and we don't get paid until the house closes. Their are a lot of good answers here! I hope you have enough information to make a good decision! Good luck!
Heather
0 votes Thank Flag Link Sun Oct 9, 2011
How do you find out whether commissions are negotiable?

Answer: Commissions are negotiable. That's how you find out: By asking.

How do you negotiate a commission? The same way you negotiate anything else. You offer something of value in return for something you want. In this case, the thing of value is the agent's opportunity to list your home. You say: "I've got a real nice house, and I'm a 'good' seller--I keep the house in good condition, I'm flexible about when potential buyers can view the property." And so on. "In return, I would like to pay a commission of less than 8%."

As for 3%--go for it. Honestly, most agents I know (and most of their brokers) wouldn't go that low. Some will. If you really want 3%, you may have to trade off some of the aspects of full service that you'd find with other agents. Just recognize that. And just because commissions are negotiable doesn't mean an agent has to go that low. An agent can just say no--just as if, for instance, your home were listed at $100,000 and someone offered you $25,000. It's all negotiable.

If you're FSBO, then it can make sense to offer the buyer's agent something in the range of 3%. It's totally your decision. I can't imagine a FSBO offering a buyer's agent 8%.

One final comment. And please don't take this the wrong way. But if you're selling FSBO, you really owe it to yourself to become more knowledgeable about real estate transactions and negotiations than you currently are. You'll have no support or advice, while the buyer (if working with an agent) will have lots of support and advice.

Hope that helps.
0 votes Thank Flag Link Sun Oct 9, 2011
Don Tepper, Real Estate Pro in Burke, VA
MVP'08
Contact
Angela,
As others have stated, the listing agreement you make with your real estate agent is fully negotiable. If the agent you are speaking with indicates they can not negotiate, set up an appointment with another agent perhaps with a different franchise.

It is understandable that 8% is higher than you expect.
What would your reaction be if an agent indicated they would list your home for 0%?
Seriously, do you expect your home will be SOLD for 0%?
That is actually the key, your goal of getting your home sold. Yep, you can get a lower negotiated rate, but what have you saved after six months and your home has not sold? Keep your attention on the goal of getting your home sold. In the long run, focusing on your goal of getting your home sold will prove to be less costly.

Instead of focusing on the compensation ask about:
1. how many transactions (buyer and seller) has the agent completed this year (buyer and seller) Agent national average for ReMax is 17 transactions annually. None of the glossy material presented matter. If they are not closing deals, their stuff is not working.
2. how may listings do they currently have (30+ listings means your home will be delegated to someone else) You may want to research how many listing you think an agent can handle at one time?
3. What market share does the agents brokerage have
4. how many sales has the agent completed in YOUR area
5. How may listings does the agent currently have in YOUR area? Will any of these listing be competing with your home?
6. What are the termination of listing contract conditions. This is EXTREMELY important. You don't want to get STUCK in a contract that is not working.

As you know, time may not be working to your advantage. Know what your goals are in selling your home, make them clear to the agents you interview and using common sense, and the results they have experienced, choose the agent best prepared to meet your goals. Please, don't sabotage your success by padding the price or failing to prepare your home as agreed.

Best of success in the sale of your home.
0 votes Thank Flag Link Sun Oct 9, 2011
If you want 3% at closing just visit my website and call at your convenience for an appointment. We serve the entire state of Wisconsin and have hundreds of satisfied clients. You can also tune in to AM1130-WISN on Saturday mornings between 9am-10am to listen to my live radio show - "The Badgerland Realtors Home Show". Every week we discuss the 6% commission myth, "Full Services" vs "Limited Service", and take live calls. Talk to you soon!

Bo Tarantino, President
(262) 732-5802
0 votes Thank Flag Link Sun Oct 9, 2011
Commissions are always negotiable between you and your agent, there are no set standards as it would be against Federal Laws, in particular the Sherman/ Clayton antitrust act; therefore if looking to sell, interview a few local agents from different realty companies, then choose the one you like best and who has the most to offer; choose your agent with care....
0 votes Thank Flag Link Sun Oct 9, 2011
By law, commission is negotiable. And by law there is no industry norm, standard, regular, usual, typical, common or average commission. Only the one that you negotiate with your agent.

As the agents who've quoted you 8%, how the money breaks down. How much are they offering to the buyer's agent who brings the buyer. Is that a competitive number, based on other listings. For example, if they're charging you 8%, and only offering 2% to the buyer's agency... and other listings are offering 2.5-3%... where is the other 6% going.

What services are you getting for your money? It's very possible that 8% is a good deal, but you won't know unless you interview several agents in your area, and ask the tough questions.
0 votes Thank Flag Link Sun Oct 9, 2011
Alan May, Real Estate Pro in Evanston, IL
MVP'08
Contact
I think you will find that 6% is the industry norm. Where that starts to be negotiated downward is on listings over $1M (certain markets) and on foreclosures where a bank/lein holder is bring mass quantities of homes to the individual agents. Raw land is a situation where commission rates rise above the norm and can reach 10% (which is the high end) and in some you will find a fee based agency arrangement where you can have your home on the MLS for as little as $500.

When selling your home you should do some research and determine what is the best fit for you. Ask friends, your banker or your insurance agent who they might recommend. From there, vet out the individual agents and make a selection that feels most comfortable.

But, based on what you have indicated about pricing the home competitively and your equity position, I would definitely include an agent that has some short sale experience in case your transaction transitions into one.

Best of Luck.
0 votes Thank Flag Link Sun Oct 9, 2011
Angela commission are nogitaible. No agent can discuss what another agent charges as it is against federal law. Call different agents ask what they charge and more important what you get for what they charge. list with has the most to offer, just remember with a discount broker, you get discount services. I have soem agents in my referal network from your area, if you would like to email, i can refer some names to you
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Sun Oct 9, 2011
The commission is totally negotiable and no one can say otherwise.
0 votes Thank Flag Link Sun Oct 9, 2011
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