This answer applies in Orange County as well as Alameda County...really...in any California County...and, I suspect in most places across the U. S.
There is no â€œstandardâ€ commission. Commissions are negotiable. Some agents give discounts. The Medford Real Estate Team does not.
Our real estate team has our expectation of the commission that we expect on a listing and we think we are worth it. For a buyer representation, we take what we are paid.
There is more to buying and selling a house that the commission. If that is your only concern, we would probably not do business together. Our commission is our income and we work hard to earn it. We realize that is not true for everyone. We also realize that not all of the public believes that we are worth what we earn. Part of the challenge in our business is convincing our clients that we earn our pay. We are willing to work in an environment in which we have to constantly prove our value. We donâ€™t compete on price alone.
The fact that you are a broker and appear to have a total lack of understanding of what Scott Godzyk made very clear is scary. This is real estate 101, not discussing commissions in a public forum, and I suggest before you state the nonsense you did, in the manner you did, you go back and read your basic real estate book.
Nobody here said anything about full service vs discount/flat fee/buyer rebate or anything like that. They just stated the fact that commissions are negotiable and not to choose agents solely based on commission.
I have no issue with various fee structures, have stated so repeatedly on this forum.
I do have issues with agents, especially brokers who don't understand basic anti-trust laws.
The best thing to do is research a few agents, this is a good place to do that, and then make some appointments and talk to the agents. Talk to them about your specific property and situation. Then ask questions about how they will market your home and definately what they will charge you to do it.
Then you will have the information you need to make a good decision for you. Real estate transactions are more complicated than just sales commission...you need to find an agent that is going to work for you....you family, time tables, schedules AND budget.
I'd love to meet with you and discuss how I work...if you like!
Doing so is contrary to the Sherman Anti-trust laws..........agents in a public forum, or even among themselves, should never state that a commission is "standard" "curtomary" "usual" or " the going rate". The only correct, allowable response is - "all commissions are negitable".
As a consumer, you are free to meet with, and discuss the commission with an agent one on one, and they can then let you know what their commission would be. You will probably find a variety of options.
For agents who are unaware that it's not acceptable to state specific commissions (which can be interpreted as an attempt at price fixing), I suugest they check with their state Real Estate Commission, or even Board of Realtors for clarification.
There is no fixed rate of commission as a seller or a buyer in any state. They are completely negotiable. However, I would highly encourage you to shop for an agent by their skills, experience, references, and reputation rather then what they charge. Especially in this market!
When you are a buyer there is usually a % or a dollar amount built into the listing price agreed to be paid to the buyers agent from the seller.
So why are REALTORS still responding to this question in direct violation of the Antitrust laws?
If you read the article and the link that Duffy posted, there isn't much doubt about the dangerous position that agents are putting themselves in by discussing commissions in a public forum.
Basically, there should be no discussion of commission between competing brokerages, private or public.
This does not mean we can't discuss, as I stated previously, different commisson structures and business models and obviously commission SHOULD be discussed amongst agents and the people who are thinking about hiring them.
With commissions being negotiable, it is not feasible to advertise a set rate, because there is no set rate.
Well......you know how we realtors can be - who can ever remain silent! :)
Duffy, thanks for taking the time to post those lnks. I have often cut and pasted excerpts from those exact articles to use here on Trulia when either defending or simply explaining the pitfalls of discussing precise commission rates in public. So many agents feel it is perfectly fine to say " this is our customary", "usual" or "standard" commission...............it isn't fine to say that!
I will honestly admit that i wasn't aware of that when I first started here on Trulia. One of the things I love about this site is the ability to grow and learn from others (yes, even after 25 years in the bvusiness, I can still learn...... and even retain a few things along the way!!).
For those who want to dig their heels in and remain fervent that their position is the correct one, and it is perfectly fine to discuss specific commission...........go right ahead - defend it all you want - you're still wrong.
My only repsonse to this now..........is........go have a conversation with someone from your state's Real Estate Commission, and see what they say about stating commissions in a public forum.
I rest my case............
Public discussion of commissions can lead to the perception of price-fixing which is why it is not only prohibited but illegal.
I have no problem with discussing different commission structures. I do believe that the real estate industry can only benefit from bringing consumers more choices in services and how they are paid.
I do have a problem with agents thinking its okay to discuss specific rates.
You might believe its overkill, but I think its better to be safe than sorry. Sometimes, its all about perception and I think we need to be very careful about how things are perceived in a public forum.
This forum is to help consumers get a feel for agents and real estate in general. It's critical for our industry that we do so in a professional manner and uphold our Ethics training in the process. You nailed it....
Susan....I hope you have reached the realization that real estate commissions are negotiable the same as home prices. It's too shallow to say "you get what you pay for" because I have often worked very hard on a ver low priced home and been paid very little....but you do need to make sure you have a quality person working on your behalf. That includes someone who knows the rules and plays by them :).
As Debbie and Scott have stated, all commissions are ALWAYS negotiable. Real Estate Practitioners cannot discuss commissions with each other and never in a public forum. Believe it or not, we cannot even discuss commissions with each other when we're together at Real Estate Agent / Broker gatherings, meetings, training sessions, caravans, previews, open houses, etc. It is an Anti-Trust issue. If licensees are discussing commission structure or offerings with other licensees, it can be considered "price fixing" and they should get out of the business becasue they do not understand the laws they must abide by.
Again, commissions are ALWAYS negotiable with each individual Agent / Broker.
Best of luck to you, and remember, you get what you pay for.
Broker / REALTOR
Southern CA and,
The law was to discourage any collusion on the part of agents and their brokerages. The fact that we can all share our varying commission fee structures without being criticized or slammed for not giving professional, full service, if we are discounters, is partial intent of the law. Encouraging competition so no one can corner the market and price fix, or black ball other agents listings or office.
You're misinterpreting the intent of the anti-trust laws.
The law is intended to keep COMPETING BROKERAGES from price fixing. Each individual broker can determine what their own fees are.
Call your real estate attorney... your state dues probably allow you a free conversation so he/she can pound some sense into you.
I can just see it now. Someone over at the bubble gum forum asks, "how much is a pack of Hubba Bubba?"....
1. You can't talk about that!
2. There are anti-trust laws about telling someone what you charge for gum.
3. We should never discuss the cost of gum in a public forum.
4. Gum prices are very private and should only be discussed in a dark closet in a basement or second story room with no windows.
No wonder our industry has a crap reputation.
I'd say the intent to collectively NOT speak of commissions is the far greater risk of violation. Take a peek at:
http://www.justice.gov/atr/public/guidelines/211578.htm where it says:
"Other examples of price-fixing agreements include those to:" ... "Not advertise prices"
In my (very much zero-legal-expertise) opinion, those of you who are lecturing others not to discuss commissions are likely closer to violating laws than those you are lecturing.
If you feel it's best not to discuss commissions - so be it - but I'd be wary about telling others not to discuss commissions. That seems like collusion to me, but I'm no lawyer/legal expert. Just my opinion.
The above was the only thing I had an issue with Brad.
I don't want commissions discussed in a public forum because we're not suppose to. Specifically, commission rates.
However, discussing different types of commission structures is just fine and dandy with me.
I've read the piece Duffy posted and to make the leap that any answer to Susan's original other than "real estate commissions are negotiable" is a violation of Sherman Anti-trust laws is quite a stretch. Let's play nice though.
By Timothy W. Grooms
Williams & Anderson
111 Center Street, Suite 2200 - Little Rock, Arkansas 72201
(EDITOR'S NOTE: This article has more technical information about legal matters than usually found in AREC Newsletter articles . It contains important information which the reader may wish to discuss with an attorney.)
Until recent years, real estate professionals have had little contact with the federal Sherman Antitrust Act (the "Act") However, a 1980 decision rendered by the United States Supreme Court, in addition to numerous lower federal court and state court decisions subsequent to that decision, have made it clear that the actions of real estate professionals and the professional organizations to which they belong are subject to the prohibitions and requirements of the Act. Familiarity with the provisions of the Act are critical in that violations thereof are punishable by both criminal and civil sanctions. A criminal violation of the Act is a felony punishable by imprisonment for up to three years and fines not exceeding $100,000 for individuals and $1,000,000 for corporations. Damages awarded to plaintiffs in civil actions are automatically trebled.
II. THE TEST OF ILLEGALITY
The literal language of the Act prohibits every contract, combination and conspiracy in restraint of trade. While early United States Supreme Court decisions suggested that "every" was to be taken literally, a "rule of reason" now prevails to merely prohibit those concerted actions which cause an "unreasonable restraint of trade." Nevertheless, the courts have held that certain conduct is so anti-competitive that it is not to be judged by the "rule of reason" analysis, but is instead illegal "per se." In the real estate brokerage industry, most civil and criminal litigation has centered around three challenged practices, any of which, if successfully proven, constitute "per se" violations of the Act. The balance of this article will concentrate on these three areas, involving price-fixing, group boycotts and tying arrangements.
Agreements among competing brokers to set commissions is price fixing and hence illegal per se. However, illegal price-fixing is not limited to those cases where a specific fee or commission rate is agreed upon. Rather, the prohibition extends broadly to all agreements which have the effect of raising, depressing, fixing, pegging or stabilizing the price of real estate services. Cases under the Act have not required a showing of an express agreement to adhere to an illegal plan; tacit agreement to such a plan will suffice for a violation of the Act. Real estate professionals are easy targets of price-fixing suits because studies indicate that commission rates have been relatively stable over time. Plaintiffs usually allege that such stability is due to either tacit agreement, express agreement, or other type of collusion among real estate professionals. However, it is equally convincing to this author that the fact of commission rate stability by itself should not establish a conspiracy. Indeed, the historical trend of inflexible rates may be the strongest evidence that the phenomenon is explainable solely by market forces, not by collusion. Arkansas real estate professionals should be extremely cautious to never discuss with other brokers, in any setting, commissions which they are charging to their buyer or seller clients. These discussions, which the author can envision as being potentially "pro-competitive," in that they might cause a broker to realize that he needs to lower his commission schedule to "meet the competition," are so potentially devastating in either civil or criminal proceedings under the Act that they should be avoided in all circumstances.
I SHARE MY COMMISSIONS WITH MY CLIENTS!!!!!
Go ahead and give Eric Holder a call and see if he's interested in prosecuting. Sherman anti-trust laws are all about price fixing and not in it's broadest sense does it prohibit discussions and/or advertisement of discount real estate commissions.
Karen - I'm sure you approve of this answer since you deem it professional to call out another agent in a public forum and question their general knowledge of real estate law.
All the agents who don't want commissions discussed in a public forum are the ones who don't want you to know about discounts on real estate commissions. I've been sharing my commissions with buyers for years and a lot of agents hate it because the "Big Box" real estate business model can't compete.
I do everything full commission agents do except drive you around to a bunch of houses to see if you like the neighborhood. For that difference the typical Orange County single family homes buyer gets back about $7,500 as a rebate from the commission I earn. Don't believe that the commission is free for the buyer. It's built into the price of the home. When you pay for that property it's your money that's actually paying the commission.
I also list homes for a discount and you'll save one to two percent through my services.
If you want more information check my website at http://www.wehelpubuy.com or give me a call at 714-961-8442.
Broker - 01416432
You really need to examine all the pros and cons of discounting commissions.
If you would like more detailed information please drop me a line
First Team Real Estate
One other detail that you seem to be asking "Do real estate agents give discounts on a listing and purchase?"
When you talk with agents, ask about dual commissions. Those only apply when referring to listing and selling your home, not listing your home and then assisting you in buying the replacement home.
I'd be happy to meet with you and discuss all your questions. Check out my web site and give me a call 714-552-2335.
Commission is negotiable. On the buying side you won't be paying the commission unless you have a written agreement stating otherwise. Ususally the seller pays all commission.
You can email directly if you have more questions.
Have a great day Susan! Great questions by the way!