I can tell a few years ago, the national average commission rate as released by the National Association of Realtors was 5.2% and ranged between 5 and 7%. This is probably still true today. You can find an agent who is willing to list your home for 1% and give away 3% -- others who will do it for 2.5% and give the buyer's agent 3%, some will charge 4% and give the buyer's agent 2.5% -- it's all over the board and depends also on the services you want. Some companies charge more than others. Even though some companies typically charge more, it doesn't mean that you can't negotiate with that individual broker to accept less.
I can also tell you that most of the buyers are represented by a real estate agent. Buyers generally work with a buyer's agent and sellers work with a listing agent. When you list a home for sale, you work out the commission you will pay with the listing agent. The listing agent, in turn, offers to share some of this commission with the buyer's agent. It's not always 50/50. Although buyer's agent are required to show all listings to a buyer and cannot discriminate, some of them will not show those that offer a lower commission.
Also, bear in mind that many buyers today sign buyer's broker agreements with their buyer's agent. This agreement says the buyer pays the commission, which confuses some buyers. But if you read the agreement further, you will find a clause stating that if the seller pays the commission, the buyer doesn't have to pay it.
The honest truth is, though, it is always the buyer who pays the commission because it is part of the sales price. But in our world, we pretty it up and say the seller pays it.
In the Northern Cali/Sacramento area the average compensation for the sellers agent (listing agent) and the buyers agent is 3% each. Now that's what I typically see. Keep in mind that these commissions are negotiable by law, but also keep this in mind. If you employ an agent to list your home on the market you obviously want the greatest exposure and the highest price for your home. To get the highest price it would be nice to attract several buyers at the same time to bid on your home. This is done through a good marketing plan.... and this costs your listing agent good money.
If you are trying to attract the most amount of buyers it may be helpful to offer a greater commission to the buyers agent. This gives him/her a greater incentive to show your home to his/her buyers. And what most people don't know is... Buyers agents bring in the buyer to homes a majority of the time.
I know, I know... this sounds kind of bad because it is all based on money, but it is true. But in the long run, most sellers wind up netting more even after these commissions because they fetch a higher price for their home.
Next, if you work with a buyers agent, they are traditionally paid by the seller . it costs you nothing to have a buyers agent to represent you in this case, so why not? You have someone that is looking out for only your best interest.
(To be more specific, if the home seller agrees to list their home for 6%, then usually they agree to pay their listing agent 3% and then any buyers agent 3% if they bring in a buyer)
I hope this answers your question and I hope I was able to shine light on this matter for you.
have a great week.
The seller's agent actually pays the buyers agent (normally), but they pay with part of the money the seller has agreed to pay the seller's agent.
If this might help, the banks that are approving short sales for our office right now are argreeing to cover 5-6% of the sales price for payment to buyer's and seller's agents.
The short answer to your question: Agents can only tell you what they'll charge you for their own services... not what another agent might charge. They also may not come to agreement with other agents/brokers to fix commissions in any way.
Hope this helps!
Real Estate Agent (Broker)
A BBA can be structured on a contingency basis ( so that the agent is paid only after a property is purchased )
Only a few agents and buyers have fully embraced these BBA's yet, The standard is still as Alex described. I only mention the BBA to illuminate that there are alternative choices if a buyer does not like the status quo.