Are you the seller? Are you talking about a one-time showing where the real estate agent is bringing a buyer into your home that you are selling For Sale By Owner? Normally, the listing agent and the seller come to agreement on that number prior to listing the property for sale. When the seller is unrepresented and an agent is representing the buyer, the Buyer's Agent negotiates that number with the seller before showing the property. Due to the increased risk as far as Errors & Omissions, as well as the additional work of these types of sales, many agents will charge more than they would in a traditional sale.

Just as a follow up - this is an excerpt from an article discussing the anti-trust laws.........

"Agents and brokers in any setting, business or social, should take great care to never even discuss commission rates in any context. It's much better to be safe than sorry in this case."

Aaron - you are absolutely correct, unfortunately, most agents don't understand that law.
There are other posts here on Trulia that address it, and other agents who have tried to warn others of the perils of these kind of comments.

It is improper to have any discussion among agents in regard to specific commission amounts.

Offering a co-broker fee on your listings or even advertising what commission your company may charge is perfectly legal and allowed......it's the DISCUSSION among agents of what others think is "customary and usual:" or "standard" that can get you into trouble., especailly when offering a specific number or %.

This is a public forum......discuss these issues at your own risk!

Aaron was correct.

Brian -

Feel free to call the Minnesota Association of REALTORS and ask them to review this thread... your answer is stating a specific commission as usual and customary, which I firmly believe is an issue.

Aaron_

Collussion? Violation of antitrust laws?

Please review your statement:
"You (REALTORS) should never quote specific commission rates with other agents from other brokers-"

You don't advertise a Buyer's Broker's Compensation on your MLS listings?

Your sellers' HUD statements don't include total commission paid?

In fairness to all contibutors, collussion/ antitrust = cooperation to fix prices. Not happening here.

_Brian

REALTORS - You should never quote specific commission rates with other agents from other brokers - it could be considered collusion and a violation of antitrust laws. I recommend those agents that did quote a specific rate to remove that from their remarks.

SCG - You've seen several different answers from the agents here and I think the best way to summarize it is to say that commission is often commensurate with the services provided.

At the end of the day if you want net $XXX for the house then as long as the buyer's net offer to you is close or above that amount, then you're likely to sign the Purchase Agreement and sell the house. If it isn't enough, you can certainly negotiate the price or discuss commission again with the agent.

Neither negotiation assures a successful agreement can be made but if the agent elects not to show your house because you are not offering a commission that satisfies them, then you lose all opportunity with that buyer.

Agents, buyers and sellers are all trying to eek out as much as they can in this market... but we all know that we need to make opportunities if we are looking for success... I wouldn't automatically exclude any opportunity.

Scg_

Great question. What is fair? What is not fair? Who says?

I've known agents to brag about charging as much as 7% to less than scrupulous sellers (consider it's the Agent's Buyer who ultimately pays for it) even though what is most predominately practiced is to charge 2.7% of the selling price. Consider that "2.7%" is the most widely represented buyer's broker's compensation offer published (RMLS). To partly answer your question I think most would agree, professional and consumer, that 2.7% is not unfair.

As with most One-Time Showing events, let's not forget that the Agent's obligation is to perform in the Buyer's best interest. For perspective, please keep in mind that most Agents enter into a relationship with most Buyers expecting to be paid 2.7% of the property's selling price (see Exclusive Right to Represent Buyer agreement- MN Association of REALTORS). By agreeing to an amount of 2.7% of sale price, the Buyer and Agent have already mutually defined the terms of 'fairness'.

In that circumstance, what if the Agent attempts to charge the unrepresented Seller an amount that exceeds the 'fair' commission amount? In whose interest is the Agent serving when attempting to charge a higher amount? Could the additional cost to the Seller prohibit the sale at the Buyer's expense?

Something worth considering: You can always hire a Broker or Attorney to Facilitate the matter for you (less than $1,000). The Buyer's Agent would be paid the going rate and your end is covered.

_Brian

SCG
Realtors are paid for the work performed and results achieved. Would you expect a doctor whom you saw when you were out of town on vacation to charge you a different rate than a regular client?

If the property sells, great. It probably won't, but if it does, then negotiate a fair deal.

Scg, the fact is, if the agent is doing the work to represent you and the buyer, they deserve the same compensation they would get if they listed your house. I would expect to charge an amount that fairly reflects the fact that the agent is doing the work for BOTH sides of the transaction, not just one.

The buyers' realtor would be able to receive compensation of 2.7 - 3.15% of sales price on most homes currently for sale. Some sellers are offering additional incentives to attract buyers' realtors to show their homes. If a seller expects any guidance from a realtor with a one time showing contract to get that home through financing and inspection contingencies and through the closing process beyond his/her fiduciary duties to the buyers; that realtor will likely request additional compensation up to a 4-5% total commission.

If it sold then you should be thrilled to pay full price. Comissions don't usually have a time limit, and surely the agent earned their comission.


Good luck!