Although commissions are sometimes negotiable, most areas have standard commissions that Realtors charge. For example, Anchorage may differ quite markedly from Chicago, where I practice.
If you want to know what is standard, make some phone calls to local brokerages and/or ask friends how have used Realtors. Then, decide if that is "reasonable" to you. If not, find an agent who is willing to negotiate.
Keep in mind - some won't. There are so many hidden costs involved in marketing a home, not to mention that the final commission an agent is left with after splitting cost with a co-broker, his broker, paying taxes, board fees and MLS fees, is often far less than what you think an agents end up with.
Some agents feel their service is worth every penny. And many clients agree.
In Anchorage it is rare to see a 7% listing commission though they do come up from time to time. The idea is that the extra money will be an incentive for Realtors to show the property more and this may be the case.
5% commissions are most often found on short-sales in the Anchorage market, where the seller is literally in pre-foreclosure if you would and is asking the bank to forgive some debt. This over all may bring the averages down, though it is more typical to see a "full-service" listing in Anchorage at 6%.
One last thought on this one. If when you are interviewing an agent they quickly drop their commission in order to get the listing I would seriously question the negotiating skills of your Realtor. You see, if a Realtor is that quick to give up their own personal money (especially when the average Realtor in Anchorage does only 2-3 transactions per year in Anchorage) then how much quicker will they give up your money when it is on the table.
I would rather you find a great Realtor that you pay perhaps a little more and is much more skilled in negotiating and will potentially save you much more money. Just food for thought.
If you have any other questions let me know. You can check out more local information at our team's site, AlaskaHomeSearch.com.
Keller Williams Realty
Both of these responses are accurate and I am sure you feel it doesn't help you much. Because of laws against "price fixing", "collusion", and "anti-competitive practices" licensed real estate agents have to dance around your question. Luckily, I don't have to.
According to the National Association of Realtors in a letter to 60 Minutes on May 17, 2007:
* * *All real estate commissions are negotiable and the average is 5.1 percent, according to the most recent available data. * * *
But as Patti said, "Anchorage may differ quite markedly." You also may see marked differences in commission percentages for land verses homes and possibly between $100,000 properties verses $10,000,000 properties. I have HEARD that "standard commission" for land is 10%. I've never bought or sold land but I personally do not think that is "reasonable". However, if 19 out of 20 parcels of land are listed in my local MLS (Multiple Listing Service) with a 50% commission split showing 5.5% for the buyer's agent, I would be a fool not to agree to 11% commission so that half of the listing agent's commission can go to the buyer's agent.
So, do as Patti suggested. If the majority are saying 5%, than 5% would be reasonable. The next step is to make sure you know what your are getting for that 5% and WHO is getting it. If the MLS has 19 out of 20 homes showing 2.5% commission shared (co-broke) and your listing is for 5%, you will be at a disadvantage if your agent only shares 2.0%.
Good luck. I'd like to know what you find out. Is everything in Anchorage more expensive?