Is there such a thing as a real estate commission that decreases wtih price?

Asked by sdreyer28, Austin, TX Fri Jan 11, 2013

I'm facing the first sale of my home in the Austin area. I'm an attorney, and so I really feel like I could figure out the FSBO process if I put my mind to it. The bottom line though, is that I want to get a certain price for my home (after comission) that I believe is fair. Agents that I've interviewed have told me that they believe they can get more than my target price. So my question -- is it possible to hire a real estate agent with a decreasing % commission based upon the purchase price? If they get the full amount that they are estimating, then they would get the full commission and I would still get my target price. If they don't get the full amount that they tell me they think they can get, then thier commission would decrease so that I still get my target price. Any thoughts?

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Guy Gimenez’s answer
Guy Gimenez, Agent, Austin, TX
Fri Jan 11, 2013
You're absolutely right Mac. Most brokers I know do not allow their agents to take net listings...and for good reason. My brokerage policy makes it very clear that net listings CANNOT be taken...PERIOD. With the never ending increase in E/O insurance costs and continual increase in litigation, there's simply no valid reason to consider such an option.
1 vote
Steve Johnson, Agent, Austin, TX
Fri Jan 11, 2013
There is something called a "Net Listing", if your really content with the price and your agent is confident they can sell it for a higher price, then they can put their money where your mouth is. The way a net listing works is that you set the bottom line price (include closing costs and the buyers commission) and the sellers agent retains any amount above that price as his commission.

The best approach however is to find an agent that is knowledgeable and trustworthy, give him the listing and sell the property for the highest price the market will command.

If you want a cut rate agent, that is what exactly what you are going to get. If your agent can't keep you from hammering him on his/her commission then how is he going to keep the buyers agent from hammering you on the sales price.

If your interested in speaking with an agent who is both knowledgeable and honest and will list your property for 3%, I would love to talk.
1 vote
Josh Barnett, Agent, Chandler, OK
Sat Jan 19, 2013
As an attorney, you can check if your state allows a "Net Listing agreement" and this will ensure your target price is hit. Some states do not allow "Net Listing Agreements," from my understanding, but I am not an attorney, wink.

1. Every transaction should be a win-win, if one party feels that the other party is trying to short change them, the work will not be 100% and there may be a waste of efforts on either party.
2. Treat everyone fairly, if one feels that they are being used, they will not fully enjoy their work and the end result may not flourish for the owner or the agent.

Best of Luck,

Josh Barnett, Realtor
Metro First Realty
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0 votes
Dorene Slavi…, Agent, Torrance, CA
Sat Jan 19, 2013
Dear Sdreyer,

In my state (California) there are brokerage rules for this type of listing (called "net listing".) Most brokerages would not accept it, but it's "possible" there would be one that would in your area.

It is the buyer (not the listing agent) who determines the worth of the property. In other words, no matter what anyone thinks they can get for the home, it's only worth what someone is willing to pay for it.
0 votes
Bruce Lynn, Agent, Coppell, TX
Sat Jan 19, 2013
Certainly possible....anything is possible....

You know what they say though in the legal world about representing yourself.
I would also think about your business and how fees are perhaps negotiated.
If I thought a lawsuit was work X, but you thought you could get Y, would you take a reduced fee if you couldn't get it?

Some probably would, some wouldn't.
0 votes
Jerry Hunter…, Agent, Austin, TX
Mon Jan 14, 2013
By Texas Law Real Estate Commissions are not fixed. I would be happy to meet with you if you have not yet listed and help you with a good solution.
Jerry Hunter, Broker/Owner/REALTOR
0 votes
Claire McInt…, Agent, Austin, TX
Sun Jan 13, 2013
Real estate commissions are negotiable. However, as Texas is a non-disclosure state it is difficult for an Owner to accurately value property without pricing history available only to Realtors. The online valuation websites are notoriously inaccurate. The property tax sites are way off on the market values. Remember that the tax appraisal values are set for the purpose of accessing taxes. Not to actually value property.

You need not only pricing history but sales trend in the neighborhood.

Yes, you can sell your home yourself. I'll help you do that.

Claire McIntyre, Architect / Broker-Realtor / Property Manager / Builder
MMI McIntyre Associates
0 votes
Bill Austin, Agent, Austin, TX
Sat Jan 12, 2013
Of course a commission schedule can be set with variables. Great that you have interviewed a few agents. Not so great that the ones you have interviewed can't think outside the box they live in. I'd be happy to discuss options with you.
Bill ~ 512-709-6343
0 votes
Mack McCoy, Agent, Seattle, WA
Fri Jan 11, 2013
Texas is one of the few states that allow "net listings" and every net listing is a lawsuit waiting to happen.

Generally speaking, states want real estate brokers to be able to do business and for property owners to not get fleeced by them. The "net listing" is an opportunity for fleecing, because it allows a broker to prospect for sellers who undervalue their property and allows them to keep the difference.

In most states, the objective is that the broker works to get the property owner the highest price. Do you see a difference?
0 votes
Theresa Bast…, Agent, Austin, TX
Fri Jan 11, 2013
I appreciate your questions. After 15 years in real estate, we've certainly heard this before and your question really has merit, especially in a hot real estate market like ours. My brokerage offers a few unique variable commission programs that would likely interest you. One is our Pricing Promise, which we designed to protect sellers from inflated or lowball pricing. Here's how it works: if you decide to list your home for MORE than the price we recommend, we will only earn commission on the amount we projected your home would sell for. If your home sells for LESS than our recommended price, we'll reduce our total commission by TWICE the percentage of the difference. We also have a Quick Sale Clause that dramatically reduces our commission of the home sells within 14 days of hitting the market. Message me if you'd like me to send you more information, or we can meet to review the details of course. On your timeline...
Theresa Bastian
Broker, Keep Austin Weird Homes
0 votes
Ron Thomas, Agent, Fresno, CA
Fri Jan 11, 2013
When they are making a %, it is decreasing with the price.

Do your clients ask you to reduce your charges too?
0 votes
Marge Bennett, Agent, Fort Myers, FL
Fri Jan 11, 2013
when a commission is a %, then of course it goes down when the price goes down. That prompts us to get the highest possible price for your home.
Like someone else said, do your professional fees go down when your client doesn't achieve their desired results?
0 votes
Steven Nusin…, Agent, Austin, TX
Fri Jan 11, 2013
All commissions are negotiable. I would love to have the opportunity to discuss your home off line and discuss a structure that works for you.

We offer a great listing program,(please feel free to visit my webpage to learn more) and the market is such where good listings aren't lasting long.

Please feel free to contact me anytime.

Steve Nusinow
0 votes
JOSEPH E JAR…, Agent, Austin, TX
Fri Jan 11, 2013
S Dryer, as you have already heard, commissions are completely negotiable. Depending on your price range, I'd be happy to discuss listing your house on a sliding scale. Please give me a call at your earliest convenience and I will let you know what I can do to assist you.

I happen to be one of the top listing agents in Austin, am Master Instructor who specializes in Listing and marketing Homes, and have a lifetime total of $900 million in closed volume! Feel free to click on my name and review my Credentials and Client Testimonials as well. Trulia just did a migration so a lot of my testimonials did not come across for some reason, but you will get a good idea of my expertise, experience, and most importantly to you… Results.

Joe Jarusinsky Realtor/Master Instructor Keller Williams Realty, Austin's #1 Real Estate Company, Ranked #1 by Buyers and Sellers (JD Power & Assoc. 2012)
Call 512-261-4415
0 votes
Because of government cut backs I found myself in early retirement from the government. I am looking at becoming a real estate agent and wondering if this is a good thing at this time and also how hard will it be to get on with an agency.
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Miekeba Jones, Agent, Silver Spring, MD
Fri Jan 11, 2013
Yes it is possible. Commissions are negotiable. Some commissions can be set to be a percentage of the sales price. This type of agreement will decrease and increase according to the final sales price. Have you found a Realtor, because I can help you find one?
0 votes
Guy Gimenez, Agent, Austin, TX
Fri Jan 11, 2013
1. Agents will often tell you they can get a higher price for your home than you's called "buying a listing" and it's a common practice.

2. Commissions in Texas are always negotiable, so there is no problem proposing your commission plan to the agent. I think you'll quickly find out if the agent is trying to "buy" your listing or if they really believe strongly in their assessment of value. If they don't buy off on it, then you will have your answer and can move on to the next agent.

Guy E. Gimenez ABR, CRS, GRI
Broker / Owner / Investor
The PowerHouse Group
0 votes
Dallas Texas, Agent, Dallas, TN
Fri Jan 11, 2013
Well ENJOY my answer ......

does that apply to attorney's regarding fees.

IF client does NOT have out come in your representation do you REDUCE your professional fees?

Lynn911 Dallas Realtor & Consultant, Credit Repair Advisor
Multimillion Dollar Sales Producer

Follow me on Facebook
0 votes
Margaret Jol…, Agent, Austin, TX
Fri Jan 11, 2013
Commission agreements are between the agent and the client, can be custom tailored to any situation. I once offered a discounted commission if my client would list at my recommended price, or a higher commission to list it where he originally wanted to, a little higher than I recommended. (He chose the lower priced option.)

If you need another opinion, give me a call and I'd be happy to come take a look at your home.

Best wishes for a speedy sale!

Margaret Jolly
Keller Williams Realty
0 votes
John Crowe, Agent, Austin, TX
Fri Jan 11, 2013
Absolutely possible. Commission is not a set amount and buyers and sellers can negotiate the same way terms and price are negotiated with a sale of a home.

Good luck!
0 votes
Michael Cheng, Agent, San Jose, CA
Fri Jan 11, 2013
Sure, you can make any commission arrangement that you and the listing agent can agree to. If they're so confident, let them prove themselves.

Since you're an attorney, you're in the ideal position to put in the exact legal language for performance on the listing.
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0 votes
Alan May, Agent, Evanston, IL
Fri Jan 11, 2013
You can pitch the idea to any agent you like, and if they're agreeable.. then yes, you can have your decreasing commission.
0 votes
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