Home Selling in San Jose>Question Details

Bay_area_ll, Home Buyer in Oakland, CA

how much will agents negotiate commission?

Asked by Bay_area_ll, Oakland, CA Wed Feb 11, 2009

Since I'm nearly underwater and all the equity will be eaten up in realtor commision.

Help the community by answering this question:


If you are looking for full service you can expect to pay between 1% - 3% (listing side only). Often times independent agents (small offices) can afford to charge less because of overhead. Larger offices have to make up for institutional advertising which, in my opinion, do not sell houses.
We do see a lot of "regular" listings (as opposed to foreclosure or short sales) offering bonuses or higher commissions to the "selling" or buyers agent as an incentive. I don't necessarily agree with this. I believe that you have to have common sense when pricing your property. Even if your property in not in foreclosure or short sale you are still competing with these distressed properties therefore you must price your home accordingly. If you house is priced right you may even see multiple offers which can bring a few more dollars to the table.
Commissions or agents do not sell houses. You sell the house the Agents market your property and represent you through the process and should have a working knowledge of your area to help you price it right.
There are also companies that will market your house by listing it in the multiple listing services and some additional web sites. This can be okay if you really know what you are doing. Otherwise, I suggest full service representation. Put a small add on Craig’s list or in the paper and watch the offers you get from "listing" agents or call and interview a few and go with your gut...good luck

Jeff and Cheryl Fox

Properties Plus
818-995-9108 Office
800-917-8080 Toll Free
818-207-2013 Cell
Email: mail@jeffandcherylfox.com
Webstie: http://www.jeffandcherylfox.com

16133 Ventura Blvd. 7th Floor
Encino, CA 91436
0 votes Thank Flag Link Wed Feb 11, 2009
Rebekah how is it my fault that property values have plunged and we are in the worst economic downturn since the great depression. Sure that's my fault that I "screwed up"

If you havent noticed everyone taking a pay cut these days including real estate agents.

Good luck trying to charge your clients top dollar in this market.
3 votes Thank Flag Link Wed Feb 11, 2009
"they do not get paid
until a loyal client closes with them on a property "

This part is obvious my last agent was on me like a rabid dog trying to get me to buy a house. This was a buyers agent I might add who was supposedly looking out for my best interests.

I'm not blaming anyone else for me overpaying but he sure did his part in creating a "sense of urgency"
2 votes Thank Flag Link Wed Feb 11, 2009
"Interesting question. SO, you want the Realtor to work for free because you screwed up."

No where in Bay_area_II's question did I see a request for an agent to work for free. With a response like yours, no wonder many people have a bad opinion of agents and end up going FSBO.


Below are two links to blogs. The first may help in obtaining a agent and the second has info on doing a FSBO. Good luck on whatever you decide. BTW, by law agents aren't supposed to discuss commissions in an open forum.


2 votes Thank Flag Link Wed Feb 11, 2009
Apparently you're going to get a lot of "You are lucky we only charge you this much!" Fees are negotiable.

Many agents, not much business. You are the employer. They are looking for work, you are hiring.

Start talking to agents in your area and see what you find out.

Good luck, Dunes
1 vote Thank Flag Link Wed Feb 11, 2009
This questions is asked quite often of us and is always difficult to answer. Most Realtors are full time,career
oriented salesmen and real estate is their livelyhood. Just as a doctor, attorney or any other professional gets paid, we too deserve to be paid. What makes our career different is that we do not get paid unless we deliver results. We can spend endless hours , and considerable money marketing your home and unless we take it all the way to settlement, we do not get paid. We are independent contractors that supply all their own advertising, marketing tools, etc. and also have an agreement to pay the broker a fee or split.
If you put all of this together, you can see every transaction is important to us and we do not want to see them fail. We will be glad to further discuss this if you would like to contact us @ http://www.Maconhomes.com
Web Reference: http://www.Maconhomes.com
1 vote Thank Flag Link Wed Feb 11, 2009
Everything in real estate is negotiable! Remember too that you get what you pay for. It's like this, ever buy the store brand of cereal only to have no one in your house like it? It goes stale and you eventually throw it out two months later. You go to the grocery store next time and buy the name brand because everyone will eat it! Good agents are like the name brand cereal. Pay them well and ask lots of questions, take their advise the first time they give it and you will save money in the long run!!! No one complains about the service or quality of Nordstrom.
1 vote Thank Flag Link Wed Feb 11, 2009

Each agent can negotiate with you.

In the buyer market we are presently in, I recommend a straight 3 percent to the agent who brings the offer. The listing agent negotiates the commission for the "buyer's agent" and for herself (or himself) as part of the listing contract. You can also create a complicated arrangement where commission will shift based on the sale price of your home.

As for a listing agent, I would focus more on a quality person who knows the market, who markets your home well, who gets the power of his or her website promotions (my last listing received a documented 4,500+ hits on its website, http://www.1278Parkington.com and sold within a week despite its classification as a short sale).

Then, you want to like and feel a sense of trust about the person because they will have in their hands negotiations around something you feel strongly and precious about.

I normally negotiate the listing commissions following the meeting where we talk about the house, its selling points, the expectations of the seller (some sellers think their home is worth more than the market will bear) and whether we have a good operational understanding of the process. I also always price competitively to bring in as many people as possible and test the market as quickly as possible. Time in a declining market is not your friend. Each month, foreclosed and short sale listings are driving prices down in our county.

First, I want to know if we want to work together anyhow. When something is a fit (like, my services for their home sale) that matters more to me, first.

Then, commission negotiation is usually pretty easy.

You can also go for a flat rate agent who advertises squeaky low commissions. My experience with agents who charge really low prices is to be careful about the services and the quality. You want the best quality for the $$$$s.

So, happy negotiations! Good luck on your home sale. And since you are also buying a home, your agent will need to be good at negotiating for the best price for you on that end, as well. I suggest you focus on the right person who can do the best job and then work on price.

Finally, some brokerages have minimum standards for commission negotiation "below which" need to be approved by brokers. Other brokerages have agents who can determine their own commissions.

Erica M Nelson http://www.EricaNelsonEstates.com
1 vote Thank Flag Link Wed Feb 11, 2009
It varies. Our company saves clients about 50% compared to traditional listing commission rates while still providing full service catered to our client's needs. There are others that charge much higher commissions for the same services because they spend much more on ineffective advertising for the company or themselves out of what you pay them.

Be a strong negotiator and see what will work. If you have to go the short sale route, the commission is paid by the bank.
Web Reference: http://www.atlistings.com
0 votes Thank Flag Link Tue Apr 13, 2010
Hi bay area,
If you are going Short-Sale the commitssion rate is usually lower then normal. I've seen some very low commission rates for agents on Short Sales. Just be open with whoever you choose to work with. In this market you shouldn't have much trouble finding an experienced short sale agent.
Best of luck to you
0 votes Thank Flag Link Wed Jul 15, 2009
How much an agent will negotiate depends on the agent you higher. In this slow market you should be able to find agents that are willing to work for a smaller amount of commission. If you don't have the success you want with negotiating you can always choose a discount realtor. Some of them are fantastic and they offer real value.
0 votes Thank Flag Link Fri Apr 17, 2009
Hello and thanks for your question.

As real estate professionals, we must all emphasize that commissions are completely negotiable between the Agent and the Client. This means that you and your agent of choice must work cooperatively to determine the best commission rate for you. As another real estate colleague pointed out, agents from larger companies will have higher commissions to cover overhead and the split between the broker and the agent. Agents from smaller companies can afford to be more cost effective due to less overhead and a more favorable split between the broker and agent.

Agents from larger brokerage firms may be willing to negotiate a fee of as low as 1 percent of the sales price to be paid to the listing agent, while other firms may have agents who are willing to be paid on even lower percentage or a flat-fee basis. Keep in mind, however, that the this is only 1 part of the commission that is paid on the sale--a second commission is paid to the agent who brings a buyer for your home. At present, the fee paid to the buyer's agent can be between 2-3 percent. So, as an example, a fee of 1percent to your listing agent, and a fee of 2 percent to the buyer's agent will mean a total of 3 percent (1+2) as the commission to sell your home.

To determine what fee structure would work best for you, talk with several agents to see who can best help you. Good luck and happy house hunting!!

Grace Morioka, SRES, e-Pro
Area Pro Realty
0 votes Thank Flag Link Thu Apr 16, 2009
Below is a list of things that an agent should do for you.
Here are a few tasks performed by your broker:

Visiting your house and preparing a comparative market analysis;
Filling out and photocopying all of the legal documents to make sure you are protected by law or taking the steps to obtain them;
Preparing a detailed sheet of your property and updating it as required;
Preparing strategies to stimulate sales (e.g. internet placement, open houses, advertisements and other marketing tools);
Assisting you during negotiations so that you make a decision that you are happy with;
Reviewing with you the offer to purchase and its attachments, preparing a counter-proposal;
Following up on the fulfillment of various conditions by preparing and obtaining the required documents;
Following up Escrow that all is being done on time.
Being available during; inspection of property, appraisal of property and when repairs are made.
Submitting all legal documents to the notary and accompanying you for the signing of the deed.
What is the compensation for?
The compensation paid to the listing broker is carefully divided. If a selling broker participated in the sale, he or she is entitled to a share of the compensation, and the brokerage firm also gets a share. However, your broker must use that amount to cover several expenses (advertising, photos, office costs, photocopies, assistances, etc...).

As a self-employed worker, he or she must also deduct expenses (car, gas, insurance, etc.) and set money aside for income taxes and retirement planning. Finally, the broker has professional liability insurance.

As you can see, your broker must work hard to earn his or her compensation.

What would you do if your boss came to you and aksed you cut your pay but do the same amount of work and be happy to do it? Yes, we do cut the % and try to work with our clients. Usually if my commission is at the full % and it has been an easy sale I'll give back part to the seller. Sometimes help the buyer be able to purchase, the full commission leave me wiggle room to make the deal close.
0 votes Thank Flag Link Wed Feb 18, 2009
Dear Bay
Many homeowners are in the same boat as you. It is not really a question of your equity being "eaten up by commission". The truth is that declining homes values are simply the law of supply and demand, so blaming your problems on the cost of selling your home will probably not be helpful.

What you need are some solutions and some options, right?

My recommendation is because so many people are having similar issues, rather than post a question to a group of professionals who don't know anything about your situation, try a different approach.

First, you are not committing yourself to working with a Realtor when you simply ask them to analyze your situation.
Second, not every Realtor will want to spend time with you. Some Realtors prefer to simply not get involved in a complicated sale. Most professionals know that even if a listing looks like it will be a normal sale, it is possible that due to changing market conditions it good turn into a short sale.

I think you can find some competent Realtors who will be willing to sit down with you and look at your personal situation. Let me give you an example:
I was approached by a lady who's company was going out of business. She was going to have to sell because she was not longer getting a pay check.
First she told me how much she owed. She she told me about her Home Equity Line of Credit. Then looking at the Average Sale Price decline and it was about 28% from the time she bought her home in 2007.

Then I evaluated her home, which needed some work to get it ready to go on the market. We also identified the listings with which she would compete when her home hit the market. We walked inside just like buyers and compared her home to the others. It turned out that because most of those homes were short sales and REOs they had a lot of what we call "deferred maintenance".

The reason that is important is that we were able to develop a plan that would enable her to put her home in a showing condition that would be much better than the competition with just a little work. A little painting, re-organizing, and some staging, her home would look so much better, she might even get MORE than we thought.

So I invested about five hours on the front end, without event having a listing contract signed, because this lady needed help. By the time we finished our work she knew that she would walk out with a couple thousand dollars, but at least she would not owe any money, which was her big fear. She thanked me for helping her see that her position was not as bad as she thought.

Wouldn't something like this help you?

In the end she showed the Seller's Estimate of Net Proceeds to her company, explained what she was going through, and then her boy friend and her company decided to help her so she is not going to have to move for a year. Hopefully the market will improve between now and then. Plus she knows what work needs to be completed so when she does sell, it's ready to go.

I hope that his example will give you some hope. If you would like a Realtor to help you, let me know and I will refer a professional that can do the same for you..The bottom line is that if this sale had turned into a short sale, I told her that I would take care of that too. I was in this process to help her, not walk away when the going gets tough.

Good luck.
0 votes Thank Flag Link Wed Feb 11, 2009
Keith Sorem, Real Estate Pro in Glendale, CA

Your question always sparks a great deal of commentary. In my opinon, your selection of an agent should not be based only on price. I always try to make my large financial decisions based upon value. I do not necessarily choose the lowest contractor bid when I am hiring someone to do a project at my home. Price plays a role in that decision but so does their reputation, quality of their product, and their approach.

Yes, commissions are negotiable. Talk to a few agents and see what they can or will provide at various pricing scenarios. Open communication and dialogue are important from the onset. Have the discussion with a view agents, make a decision and set the rules of engagement with your chosen agent.

Best of Luck!
Web Reference: http://www.AprilTavares.com
0 votes Thank Flag Link Wed Feb 11, 2009
Hello Bay_area_II

This is a tough market and your Realtor will earn every penny once (s)he sells your home. There are discount brokers and there are full service brokers. The decision of whom you go with is yours and as mentioned before you WILL get what you pay for.
Best wishes,
Ali Moein
0 votes Thank Flag Link Wed Feb 11, 2009
I have to quickly answer to your comment about the agent who well how should I say it "Was pushy....."
You know let me just clarify something, I wish I could tell you that all doctors are the same, detail oriented, honest, take their time with you no matter what, only take on as many patients as they can truly spend enough time with,answer all your questions, kind, helpful, concerned, charge the same fee for same service, you can always reach them when you have questions and you trust him and her with your life!

Well, you can answer that question, and how about attorneys taking care of your problems .....

I think the same goes for any profession, some are more into the deal, getting the deal done and getting paid and others are more into serving their clients right, taking the Code of Ethics of the Realtors very seriously and abide by it strictly, which includes advising the client with professionalism and expertise every step of the way..... Pressuring the buyer to make an offer is not one of them, giving the buyer all the information pros and cons and then the buyer will be able to make an educated decision with the Realtor's guidance, the buyer at the end is the one spending his or her money.

Just as you select your trusted dentist, doctor, or attorney you work with a Realtor you can tell takes his or her time, does never mind explaining things to you, puts all the information about a property in front of you,
including a cma that shows what has recently sold similar to the property YOU intend to buy, and hopefully your Realtor (and some are trained with a designation to particularly work with buyers!!!! ABR !) has shown you a lot of similar properties on the market so that you were at the time of making an offer a well educated buyer...
That's the way it is supposed to be done. Sorry you had a bad experience....
Take care!
Edith YourChicagoConnection and Northern Illinois Expert
0 votes Thank Flag Link Wed Feb 11, 2009
You have to understand that a Realtor's commission does NOT go 100 % in their pocket....
a) your Realtor/Listing Agent has to share his part with his own brokerage company
b) and the other part will go to the agent who brings the buyer and he/she will share part of that with
his or her own brokerage company they are associated with

c) all Agents are independent contractors, which means all their expenses (office expenses, marketing, advertising, car, computer, phone etc. etc.) comes out of their own pocket and they do not get paid
until a loyal client closes with them on a property

So there is very little wiggle room so to speak!
In today's market you really need the expertise and marketing assistance of a Realtor who can more effectively promote your property on the internet, to the real estate communities, he can do reverse prospecting etc. etc. And assist you along the way!
You should connect with an experienced Realtor and discuss all your options, including the commission.
Good Luck to you!
0 votes Thank Flag Link Wed Feb 11, 2009
Contact me if you want to discuss your situation. You have yourself listed as a buyer/seller. It may very well be worth discussing your exact circumstances to see what strategies might work.
Web Reference: http://www.TalkToCJ.com
0 votes Thank Flag Link Wed Feb 11, 2009

Interesting question. SO, you want the Realtor to work for free because you screwed up. Interesting perspective.


Just like everything, you get what you pay for. If you want the best, you'll need to pay for it. That also means you'll work with an agent that knows how to put more money in your pocket and keep you out of court.

Good Luck!

0 votes Thank Flag Link Wed Feb 11, 2009
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