Are we realtors demanding too much commission?

Asked by Brian Halstead, Miami, FL Sat Oct 30, 2010

Stand out through value-added selling, Real estate pros not willing to match bargain basement prices must show why their services are worth more money.

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John Walin, Agent, Libertyville, IL
Mon Nov 1, 2010
I have news for you all, our services are totally free until closing. We are paid a success fee, if the property isn't marketed well, priced right and staged show ready it won't sell for top dollar, if at all. Incremental commission savings is a joke. Some seller wanting to save 1/2 percent on 400k house by choosing one agent over another is only $2,000. A good active agent can get that $2k back in the seller's pocket by negotiating and getting a bigger pool of buyers and finding the buyer that likes your home and is willing to gay the most for it.
As for gross commissions, I offer a rate, I wont disclose here and tell the seller that I recommend he add half a percent to that to give the buyer agent added incentive. So in effect the seller is paying a 3% co-op instead of a 2.5% co-op and it doesn't come out of the listing side.
Pull-eeze, a few agents here need to lighten up big time! Brian is not in foul territory, no collusionary intent practices, or effect in this dialog.
2 votes
Brian Halste…, Agent, Miami, FL
Mon Nov 1, 2010
As far as all those realtors saying this question is a violation of the Anti-trust Act wake up, What about our first amendments right Freedom of speech.........
As far as the Anti Trust Act goes no one is implying a fix rate for commission as that what the law is against. Are we demanding too much is quite relative, from one realtor to another, what is too much? As you know realtors are free to charge whatever commission they deem necessary for their services as long as the clients are willing to pay it . So no one is fixing commission price here for the industry, just expressing our FREEDOM OF SPEECH rights.

I really like Suzanne answer except the part about not to have a discussion notably after she fully expressed herself, this country is built on the foundation of peoples right to express themselves on whatever subject this does not exclude murder or on a much lighter note commissions.

Brian Halstead
License real estate broker
Halstead Homes Realty
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1 vote
Suzanne MacD…, Agent, Succasunna, NJ
Sun Oct 31, 2010
We all know that realtor's commissions are always negotiable. So the answer to your question is, it depends on the realtor. And there are a lot of options out there for homeowners. There are plenty of transaction brokers who will simply put their home on the local MLS for a fee and then do absolutely nothing else to market the home. And there are full service realtors who will expend time, money and expertise to market the home aggressively.

I agree with Brenda we shouldn't even be discussing commission. And not just becuase we could be violating Sherman Anti-Trust. The real reason is this, commission is not the issue. The issue is what are the seller's goals and how can we, as realtors, help them achieve those goals.
1 vote
Alma Kee, Agent, Tampa, FL
Sun Oct 31, 2010
It depends.

Some agents that give up half of their commissions to a Broker that does next to nothing for that agent then unfortunately that agent must demand a higher commission. Not sure if you would be wise to have that type of agent representing you because that agent is either a rookie or not smart enough to work for a Broker that affords them a signficantly higher split! Also I've seen Realtor listings on that are not "enhanced" because either the agent is not "smart" enough to pay the minimal extra fee or does but doesn't update the listing with extra images, virtual tour, customized description. This is crucial in "pre selling" the listing. Also I see horrible photos included in the MLS. Sellers usually need staging advice.

Now if all of the Realtors would band together and unionize we could protect ourselves from greedy brokers and abusive buyers and sellers and wasteful Realtor Boards and MLS and Lockbox fees. With today's technology there's no reason why we shouldn't have one MLS and one Realtor Board per State.
1 vote
Mack McCoy, Agent, Seattle, WA
Sat Oct 30, 2010
And, Brian, that's always true.

Agents have to demonstrate value in order to be hired, which is important to the agent. More importantly, in my mind, is that clients - buyers and sellers - know how to evaluate Realtors(r) and determine which agent will provide the most value.

Buying cheap is a cop-out, a mindless way of doing things.

Smart people determine value: whether it is in paying real estate commissions, buying homes, or any other commercial endeavor.
1 vote
Rudolf, Home Seller, Gaithersburg, MD
Tue Feb 28, 2012
As a seller with a home worth $450000, a $27000 commission seems obscenely high. Can any Realtor justify that cost to me?

As I understand it, the broker gets 1% or $4500 (for income and office expenses), the seller's agent gets 2% or $9000, and the buyer's agent gets 2.5% to 3% or $11250 to $13500.
Of course the seller's agent has the time and expense of driving the buyer around to show homes, but why should I pay for them to show homes other than mine?

What costs are involved?
What services are rendered?
How do I know?

Perhaps if Realtors were more open with sellers about their profit and expenses, like most other business contracts, sellers wont feel like they are being gouged by the Realtor's commission. From my experience, Realtor's have about the same ethics (despite the pretense of the NAR) as used car sales persons, or maybe even less.
0 votes
Anna M Brocco, Agent, Williston Park, NY
Sun Oct 31, 2010
Commission discussions really don't belong on a public forum--Federal Laws restrict such a discussion and the penalties for doing so are hefty.
0 votes
Brenda Feria, Agent, Richmond, VA
Sun Oct 31, 2010
Anyone remember the Sherman Antitrust Act? I will not be a party to this discussion. I don't think orange is anyone's best color.
0 votes
Richard Rawd…, Agent, Southampton, NY
Sun Oct 31, 2010
No Way.....Definitely not......

We as Realtors,Brokers and Agents work really hard to Close Deals in these turbulent and current market conditions. Times are tough right now, so the last thing you want to do as a real estate professional, is drop your commission. This part of my answer is directed to Carli P. in Florida. You need a much better mind set to answer "It's OK to to lower Your commission". That is a very weak approach to a difficult market. I don't know about you, I have developed new ways of Selling real estate in today's Volatile market conditions. I Re-Invented myself in 2009 and experienced the best year I ever had in Real Estate. In 2010, I am 72% above my 2009 gross commission income year to date. Stand strong a prove to everyone that We Deserve Every Penny We Work For. Prove your worth, distinguish yourself from the competition. I will not accept any commisssion lower than 5%, and most of my Exclusive listings are at 6%.

When you change the way you think...You will change the results.
0 votes
Jessica Park…, Agent, Bryan, OH
Sun Oct 31, 2010
I definetly don't think that we are demanding too much commission because after all the splits we are not left with much. Especially with the cost of living being so high, don't we need to survive as well?
0 votes
Carli Parrish, Agent, Clearwater, FL
Sun Oct 31, 2010
I personally think that if we want a pay check in this market, we have to be willing to negotiate our commission!


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0 votes
Bill Eckler, Agent, Venice, FL
Sun Oct 31, 2010
Definitely not.....

No one is holding the seller's feet to the fire, forcing them to pay a higher rate. It's all about the services that specific agents provide. A higher level of service warrants a higher level of compensation.

Injustices arise when people provide lower levels of service for the higher price point. Shouldn't it always be up to the consumer to have a choice....perhaps the issue becomes one of making sure the consumer is educated and understands there there are levels of service and that not all companies and/or agents provide the same product.


0 votes
Dp2, , Virginia
Sat Oct 30, 2010
Many agents/brokers state that commissions are negotiable. However, several of them have ruthlessly attacked buyers/sellers who posted comments/questions here who attempted to negotiate on the commission. Don't get me wrong: I'm not suggesting that all of them aren't worth their commissions. Some are, and some aren't.

Yet, I will suggest that some agents/brokers are having a hard time articulating how they add value to the buying/selling process.
0 votes
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