If they sold the house these days it might sell for $130,000 and at 6% commission they now have about $1823 after taxes, so we did take a reduction in commissions would you not agree?
Why is the sales commission considered high when if home prices are down so is the commission of the sell . Keep in mind all commissions are negotiable, but if your home doesn't sell what is the value of fighting for a low commission.
And, as noted, if home prices go down, so does the absolute dollar amount of the commission. A $200,000 home, using your 6% example, would generate a commission of $12,000. If the value of the home drops to $100,000, the commission in turn drops to $6,000.
Finally, it could be argued (and I'd make the argument) that in tougher times for sellers, agents are working harder to find buyers and so, if anything, deserve HIGHER commissions. In a hot market, once an agent has snagged a listing, a lot of that agent's work is done. (There's behind-the-scenes stuff, of course. I'm talking about marketing.) But in a slow market, the agent may have to work a lot harder to sell the property.
Hope that helps.
All three of the previous answer are correct and great answers. Here this is another thought also. In this day of ever increasing cost for everything that you have to buy from food, paper products to insurance and Doctor visits to gasoline to tires or oil changes; one could assume that the commmission being charged to perform the work to sell your property is a bargin as it has not also increased.
Just this year alone in our local industry charges for E&O insurance, Board of Realtor dues, State licensing fees have increased by over 25% this does not even take into account increased cost for office supplies, maintaining websites, office space, fuel & car expense, employees and health care.
One thing that the previous answers did not mention is that in reality the percentage charged and then earned at the recording of the sale(or under special circumstances at another time) is really split between two cooperating brokerages (sometimes just one) and the licensee who actually listed your property, did all the right things to get it sold will actually only receive a portion of that split that was received by the managing Broker.
All in while the licensee has spent a termendous amount of money based on the hope the property will sell in a timely manner. If the property never sells the licensee is without a pay check and has spent alot of money that will not be recovered.
Yes we feel the sellers pain and we do try to work with the seller by negoiating commissions.
If you would like face to face answers to this question you should visit one of the many fine brokerages in the Wasilla - Palmer Area.
All commissions are negotiable. However, most are in the range of 5%-6% of the selling price. That said...commissions are lower. Since the selling price is lower, the commission is too. The Realtor still has to do the same amount of work - even if the selling price is lower. And, the Realtor still has the same amount of legal liability - that hasn't decreased just because home prices have.