What is a good agent commission percentage for the San Jose Ca area? 6% SEEMS HIGH IN THIS MARKET.

Asked by Kurbanoo, San Jose, CA Sun Sep 30, 2007

We are looking to see our place and upgrade. 2 agents have quoted us 6%, but I have heard that others are 4-5% . What should 6% really buy me? I have some fixing up in my place before I sell. Should I go with the agent's recomended guy for that?

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32
Jeff K, Home Buyer, Bristol, PA
Sat Dec 5, 2009
6% is high for sure. the only people that would disagree with this are agents who are financially motivated by telling you that 6 or even 7% is what you should pay. What would you expect as an answer from a web site with real estate agents?

Assuming that you wish for normal representation, you should be able to get this from a top agent for about 5%. There are only so many top agents in any area, and it won't be hard to find those in San Jose.

You may wish to consider, given your very specific location, if Redfin could be a good solution for you. It's useless here in PA but can be possibly very effective in the broader bay area. You could certainly try it for Jan-March, and change to a normal agent afterwards if you like.

Is there anything that you can't really fix up yourself? Things that major? You can certainly get cheap help via Craigslist who are skilled and easy on your wallet if you need some extra hands. Make sure you prep and stage your home, and de-clutter - so that your product / home - is very presentable.

Please find below my quick list of staging 101:

1. Rent a storage unit and get Everything unneeded out of your house - giving it a bigger appearance. This is a good opportunity to throw loads of stuff out, and donate other stuff also. This also means packing up all clothing that you won't need for a few months - it'll make those closets nice and roomy! Some of this may be done as he may not be living there anymore?
2. Eliminate ALL clutter and Clean everything - make your house spotless
3. Paint all rooms that need painting. If you have rooms that are not neutral, consider re-painting them as such (this also can mean painting ceilings a nice flat white if they are not already. And don't leave the cans in some closet afterwards - as evidence that you just did it - put them in storage too or hidden in boxes. If you have a room with nasty stained carpet - replace the carpet. If your basement is unfinished, paint all walls white - preferably with dry-lock or similar. Please pay a lot of attention to the kitchen and bathrooms - even the grout needs to be fresh and clean.
4. Do any and all simple repairs (outside trim for example)
5. Make sure you have really good "front door appeal" - if needed, repaint all trim, the entire front door, and polish the door knob.
6. Put down a layer of fresh much in the front by the bushes. Weed the beds.

In short - avoid any "possible objection" that a potential buyer might have to buying your home. You never know what little thing will set someone off - to either not buy - or ... offer you LESS. Make it easier for your agent, whomever he/she is - give them a very good product to sell.

I've been looking at properties since last July and just went to contract a month ago. You might be shocked at the number of sellers that don't bother to properly stage - and by doing so - leave thousands of dollars on the table - and lengthen their sales cycle.

House staging isn't rocket science - everything you need to do is free info on the 'net - my list above will keep you busy enough anyway. You shouldn't need "a pro" to help with it - but a good realtor will help with honest feedback.

Get a good understanding of SOLD prices for comparable homes - and your house needs to be priced accordingly - not too far above these numbers (unless you have really amazing upgrades to your home).
2 votes
David Blockh…, Agent, Los Altos, CA
Tue Nov 6, 2007
Kurbanoo,

Pay what you feel is correct based upon the level of service that you are looking for. If you are somewhat experienced and willing to put in some work to make it go, then maybe a fee for service agent is best for you. If you're a novice or don't have the time, then a "full service" agent should be who your working with. Note: some "full service" agents don't provide the level of service to be called full service....they should be checked out and compared based on the level of service they provide and their success rate (list price vs sales price - compare to board averages and other ways etc.).

I would go back to these agents and compare their marketing plans for your home (they should have a specific marketing plan for your home). The bare minimum is placing the home on the MLS. How are they recommending pricing your home? Are they helping in getting the home staged? Are you having pre-listing inspections done and by whom? What is their web presence? Most importantly, what is their level of experience? Do they have references? Did they just get into the market during the last upswing? Have they been through a downturn? Do they know how to market a home in a downturn? These are some of the questions you should be asking. You might also ask if you pay 6% on the sell side, would they give you a break on the buy side? If so, put it in the listing agreement?

If you have a trusted repair person and they are reasonably priced, I would use yours. If you don't, most good agents have repair people that they use. Most use the same repair person so they have formed a relationship where if the repair person screws up he/she knows that they not only lose that agent's business but also future business from other agents. Almost as important is that good agents know who not to use based on past experience.

Its a tough decision but remember you need to be as informed as possible about the sale of your home. If you and the agent don't match personality wise, go elswhere.
2 votes
Jeff K, Home Buyer, Bristol, PA
Sun Dec 6, 2009
Heck, if I were selling my house the first thing I would ask myself is what would motivate ME to sell something. If I were paid more to sell item A than item B, it would certainly motivate me.
~~~~~~~~~~~~
I don't think that sellers spend much time considering the motivations of the agent, but are far more interested in the level of service that they might receive for the agreed-to commission, whether it's 4-6%. Choosing the right representation is the most important thing. If any agent wants to insist that they are worth the full 6% commission then shouldn't they also have a phenomenal track record to back that up? What if they don't? Why then should they be able to demand the same premium in compensation for a non-premium service?

When I sold my last place I negotiated 5% with a top agent and got great service. But to your point - the "extra 1%" is not 1%, it's usually only .25% to the agent/Realtor, as you well know. That's not a huge difference...
1 vote
John Sacktig, Agent, New Jersey, NJ
Mon Nov 2, 2009
One more note... I am seeing more and more 7% listings coming on the market.

Agents have to work harder and pay for more to get your home in the hands of buyers. Homes take longer to sell and need to be afdvertised.

What did you settle on? Did you list your home?
1 vote
John Sacktig, Agent, New Jersey, NJ
Tue Dec 18, 2007
All commission are negotiable. But, like anything else.. you get what you pay for.

Don't expect a Mercedes from a KIA dealer.
1 vote
Jason, , 94043
Mon Oct 1, 2007
Hmm...so if I am a buyer I should be aware that my agent will be 'baited' into showing certain properties based on how much the seller is being asked to pay by their agent. Fun game. I see why so many people are hesitant of trusting agents and think they earn to much, especially with prices out here so high! All these comments about 'earning that 6%' doesn't make sense if I ask how much more work you do here vs. homes in the midwest that sell for a fraction of these prices. I don't think you work harder, I think you just earn more. That being said, an agent you can trust is worth more than an agent you question, and as for the need of any agent, that just depends on how much you know and how much time you have to do it...
1 vote
#1, , San Francisco Bay Area
Sun Sep 30, 2007
Go with your gut.

Homes are not selling like they were 2 years ago.

You want an agent that will take your listing for 4% BECAUSE THEY NEED A SALE SO BAD THEY CAN'T MAKE THEIR OWN HOUSE PAYMENTS?

How much will that agent spend on marketing your home?

6% is a bargain. I would even suggest 7-8% to offer a bonus to the selling agent to assist in the marketing of your home. I'll list a home for 8% and offer 5% to the selling agent to make my clients home stand out above the rest.

You want to list your home or sell your home?!?
1 vote
#1, , San Francisco Bay Area
Sun Sep 30, 2007
Go to Redfin and you will get what you pay for. But yes, that is an option. Read the posts here regarding Redfin... and others... and then make a decision. The SELLER pays the commission and it will be the same commission whether you are represented by Redfin or not. The Seller already agreed to it.

Because homes are not selling in this market it is not uncommon for seller paid commissions to be between 6% and 10%. It has absolutely no impact on a Buyer because the seller has agreed to pay it.

You need to be concerned with getting the best deal. A full service agent will ensure that. A Redfin agent will just do the paperwork and does not care whether you get a great deal or not. They just want their 1% You do all the work, you find the house on your own.

What is wrong with this picture?!?
1 vote
Tisza Major-…, Agent, Upland, CA
Sun Sep 30, 2007
Hi Shehz,

First you have to remember that there is no such thing as a "regular" or "standard" commission. All commissions are arrived at after you negotiate with the agent you choose to represent your interests. It is a violation of the anti-trust and fair trade laws to "fix" a commission at any set rate.

So, there is no such thing as a regular comission rate. As for what you should be looking for or expecting from the agent you choose to work with? Knowledge, a comprehensive marketing strategy with an emphasis on Internet marketing, a well-produced Virtual Tour of your home, photographs that accurately show your homes best features, flyers - color is best, accurate information about the market and how to determine your homes market value and the willingness to educate you so that you can make the best informed decisions about your home's sale and about your future home purchase.

If you are interested, and you haven't made a decision about who you would like to work with, allow me to toss the name of a great agent who is a good friend of mine and who works in your area into the ring. Mary Pope-Handy who is based in Los Gatos is someone you should give a call to at (408) 204-7673. Be sure to tell her Tisza sent you.

Take care and have a wonderful day!

Tisza
Web Reference:  http://Route66Living.com
1 vote
Dot Chance, Agent, Burbank, CA
Sun Sep 30, 2007
Shehz, I am in the Los Angeles area but I can tell you that the rates are increasing because of this market. I have one listing that is 6% right now and a couple at 5% still. Not only are the fees going up but our listing agreements are getting longer.

If you haven't already settled on an agent, I know a great team in San Jose that you would be happy with.

Agents usually have contractors and handymen that they have worked with and can recommend. If you are not comfortable with the one that your agent recommends then you should shop around. Remember to check references for any contractor work you have done.

In response to Jose's reply, Jose obviously does not understand what agents do. We are the ones that take a risk and pay high fees for our E&O insurance for each transaction AND we negotiate for you as well as advise you about needed repairs and SO MUCH MORE!! Cheaper is not always better - remember you usually get what you pay for.
Web Reference:  http://www.DotChance.com
1 vote
Jose Lopez, Home Buyer, San Jose, CA
Sun Sep 30, 2007
Go to redfin.com and don't wate your money on an agent. 3% for a buyer's realtor in this market is a waste of money. What do they really do? You can do all the research yourself and just pay 1% to have the paper work filled out.
1 vote
Patti Philli…, , Carlsbad, CA
Sun Sep 30, 2007
Shehz, On the contrary- this is exactly the market where agents should be asking 6%! Homes are taking longer to sell, agents are spending much more $ in marketing to get them sold. When homes went on the market and sold in hours or days at the most, many people might argue that agents "didn't deserve" 6%. (That's another discussion for another day). There was a link here a few weeks back about agent's commissions. A full service agent will take care of your needs.

We have to be careful discussing commissions- as they can't be "set"- but in our area (San Diego) many agents are now charging above 6%- offering incentives to both buyers and buyer's agents!

I always wonder what services you AREN'T getting from the agents who don't charge what many agents are charging? There IS a cost to doing business- and somewhere things will be cut. The biggest cut? Might be in that if an agent can't negotiate their own commission- how good of a job are they going to do when negotiating for you?

As far as the fixing up- get a few bids and see who you think will do the best job for the money.

Good luck with selling your home for the best price possible!

Patti Phillips
800-680-9133
1 vote
Mark Wilson, Agent, Pebble Beach, CA
Wed Mar 9, 2016
On the open market asking Agents to submit commission bids we are seeing the bulk of those bids come in between 4% and 5%. https://www.ListingBidder.com
0 votes
Bradley Wils…, Agent, San Jose, CA
Thu Jul 5, 2012
Low Listing Commission
AmiciRealEstate.com
3.5% Premium Service!
0 votes
Anna M Brocco, Agent, Williston Park, NY
Mon Dec 7, 2009
Commission is always negotiable--
0 votes
J R, , New York, NY
Mon Dec 7, 2009
I don't think that sellers spend much time considering the motivations of the agent, but are far more interested in the level of service that they might receive for the agreed-to commission, whether it's 4-6%. Choosing the right representation is the most important thing. If any agent wants to insist that they are worth the full 6% commission then shouldn't they also have a phenomenal track record to back that up? What if they don't? Why then should they be able to demand the same premium in compensation for a non-premium service?

When I sold my last place I negotiated 5% with a top agent and got great service. But to your point - the "extra 1%" is not 1%, it's usually only .25% to the agent/Realtor, as you well know. That's not a huge difference...
~~~~~~~~~~~
I think sellers are more concerned with their "net", from my experience. .25 may not be a huge difference on one sale, but it over many sales it is a difference. The OP is asking about 4-5%. At 4% is it is a bigger differnce.
0 votes
J R, , New York, NY
Sun Dec 6, 2009
the only people that would disagree with this are agents who are financially motivated
~~~~~~~~~~~~

Heck, if I were selling my house the first thing I would ask myself is what would motivate ME to sell something. If I were paid more to sell item A than item B, it would certainly motivate me.
0 votes
Mack McCoy, Agent, Seattle, WA
Sat Dec 5, 2009
David Ogilvy, the father of modern print advertising, wrote that if you wanted superb service from the best agencies, offer to pay them 16% instead of 15% - you won't miss the point, and it doubles their margins, making you twice as important a customer as they were before.

But, that was the sixties.

Anyway: One of the ways we add value to the transaction is to refer trusted service providers to our clients. While they probably won't charge you more, the way this relates to the opening paragraph is that these providers see We The Agents as their real customer, so they have added incentive to Keep Us Satisfied, which means, satisfying you.

On the other hand, it can be annoying spending our "goodwill capital" on people who are disposed to being non-appreciative. The client who won't be satisfied translates into an unhappy service provider who is less likely to go out on the next call. So many of us tend to be judicious with our referrals.

I'm thinking if you're trying to clip the agent's fee, that maybe you can compensate that agent by being a good customer for the service provider, work with them instead of against them, and pay them in full and on time.
0 votes
Joe Salcedo, , San Jose, CA
Sun Nov 1, 2009
Good Morning,

Actually the commission is negotiable it depends on the agent you dealing
with, there are many kinds of agent we have 1.Part time Agent 2, Full Time
Agent 3. Agent who specialize in the Area 4.Agent work with Buyers only. Again
if you are going to interview those agent be sure to interview all of them in
get a feeling who deliver or provide a realible sources of services like
CMA , how to sell your home, advertising , referral, door knocking, many things,
etc.Besure to get a testimonial letter from the previous clients....
0 votes
Andrea Wince…, Agent, Milpitas, CA
Wed Jul 16, 2008
In our area, when you buy real estate, you do not pay your agent a commission because as a seller of real estate, you pay both your listing agent and also the agent who brings you a buyer. So the commission you pay as a seller will be for 2 agents, however per the listing contract, it is all paid to the listing agent who then splits with the buyers agent usually 50/50. Make sure that your listing agent is paying the buyers agent at least half (if not more than) what he/she is getting. It helps to motivate the buyers agents to bring you a buyer. This should be spelled out clearly on your listing contract. Read all your contracts carefully before signing. It is against Trulia policy to discuss specifics of listing commissions in this forum so please feel free to call me and I can explain in more detail.
0 votes
Christopher…, Agent, Hemet, CA
Wed Nov 7, 2007
For agents earger and willing to discuss this issue at length:

Read Trulia's guidelines with regard to this:
DO NOT POST
n. That discuss the pricing of brokerage services of any real estate brokerage firm.
0 votes
Sponnie, Both Buyer And Seller, 94607
Wed Nov 7, 2007
There's been a lot of good discussion on this thread, but I thought I'd just add my $0.02 from my perspective as another seller...

On the surface, 6% seems high in this market given that we're close to the end of the year, so not as many people are listing their homes for sale. Logically this kinda makes you think (as a seller) that real estate agents should be hungry for your business and willing to take a lower commission on the sale. Plus you keep hearing in the news that "home sales" are down - but when you really look at the numbers compared to last year, the number of houses for sale is about the same in a lot of areas, it's just taking a lot longer to sell those homes. That's really scary for us sellers!

So when I really started to think about it (i.e. interviewing agents myself)- I started to think that the 6% (or 3% that the listing agent gets) could be very much worth it. Let's face it, regardless of the number of listings on the market, properties aren't selling as fast as they used to. So if I'm going to put in all the effort required to prepare my house for sale in this challenging market, I want the best possible representation for my house on the selling side. I want an agent with great marketing and negotiation skills and I EXPECT them to work hard to sell my home. The average listing in my neighborhood takes about 2 months to sell, and I want my agent to sell my house in less than the average time!

Either way, I think it's good to think about what your 6% is buying you... You want to be sure that you get what you're paying for! For me, this means assurance of a strong internet presence for my home, exposure to the right mix of agents/brokers, and most importantly a good strategy for pricing my home. When I met with the agent I eventually decided to sign with, I contemplated trying to negotiate her fee - but honestly, if she does everything she promises to do to help me prepare, stage, and market my home, she will definitely be worth every penny!

On the surface, 6% of my home's selling price sounds like a lot of money. But for me - selling my home is a huge deal and I'm willing to pay the right person to make sure the job is done right, the first time... Anyway, I hope you find someone that you feel really good about working with, at a commission rate that you feel is fair.

Best of luck! I know this is a scary time to list your house!!!
0 votes
Michael Robe…, Agent, San Ramon, CA
Wed Nov 7, 2007
Kurbanoo, Dave hit this one out of the park. I couldn't agree more. Hope you take his advice.
Good Luck!

Michael
http://www.MichaelRobertsHomes.com
0 votes
Brian Fortune, , San Jose, CA
Thu Oct 11, 2007
Your agent should be able to justify their commission whatever you negotiate with them, if they cannot do not hire them! It should be based on what they believe it will take to sell your home, whether that is the marketing or the incentive to the Buyer's agent, not what they need to live on!
Your agent should also advise you as to whether you will recoup the cost of your repairs in the sale.
As to using agent's recommended guy for repairs, it depends. Make sure he is licensed and get references just as you would if you were looking for someone, and get two other quotes.
Web Reference:  http://www.rwwindsor.com
0 votes
Dot Chance, Agent, Burbank, CA
Mon Oct 1, 2007
Jason, it is true that we probably do the same amount of work as an agent in an area where prices are lower. However, just like everyone else that lives on the West Coast our expenses are higher, our cost of living is higher.

Yes, you do need an agent you can trust. And, yes, SOME agents are not as inclined to show a property that is paying less than a like property that will pay them more.

There is so much more to selling a house than just advertising in the newspaper or even just listing it on the MLS. Realtors have contacts, a database of buyers, marketing plan(s), a group of professionals that are needed to complete the transaction in a timely manner and to know what disclosures and other paperwork are mandatory to a transaction.

Comments about not needing an agent or that agents get paid too much are usually made by people who really have no clue as to what our job really entails. Some of the biggest obstacles I have to overcome with buyers and some sellers usually come from the fact that they listen to the advice of non-professionals who steer them in the wrong direction or at best give them misinformation.
Web Reference:  http://www.DotChance.com
0 votes
Jean Powers, Agent, Castro Valley, CA
Mon Oct 1, 2007
Everyone in California needs to remember that commissions are negotiable. By law we cannot fix the commission rate. Find a good Realtor and negotiate. I do have to say that if you want nickel and dime your agent you will not get the best representation, price and terms for your home.
0 votes
Sasha, Agent, WA,
Mon Oct 1, 2007
Shehz, redfin.com will sell your home for a 3k-4k flat fee regardless of price. Be prepared to do a lot of the work yourself. They will help you price it and do all the paperwork, but you will have to develop your own marketing strategy, take the pics, make the fancy fliers, do the mailings, and host the open houses yourself. Some sellers are really into that and the huge cost savings they get is worth it. Other people, not so much - they need more support from a real estate agent. Your choice. Ziprealty.com is also a discount broker and gives you a rebate back, and they are actually full-service. Should you use an agent, make sure you ask what percentage he/she keeps and what percentage would go to the buyer's agent. On a six percent deal, for example, does he/she take 4.5 and give 2.5 to the buyer's broker? B/c many buyer's agents might be more incentivized (is that a word?) to show your home if they are making 3 percent. (I said many, not all, so please agents, don't take offense). Also, a lot of the big RE agencies charge a $200+ fee ON TOP of the commission - it is slipped in at closing, so look out for that and try to negotiate it out. BTW, I am not a RE agent. Good luck!
0 votes
Theresa Well…, , San Jose, CA
Mon Oct 1, 2007
As the below pros are saying, a slower market actually lends to higher commission rates so that you can essentially attract more interest to your home. The idea is always to get as many buyers to take a look at your home as possible and with San Jose inventory over 4700 its a buyer's market, so you have to do all you can to attract the most buyers amongst that immense competition. As a comparision, when the market was HOT in this area 2004, 2005, inventory was around 2000 homes and sales were 2-3 times higher than they are today.

With these statistics in mind, I would recommend a minimum of 6% commission. If you pay over that, the excess should go the buyer's agent side so that your home stands out above the rest. A good solid professional agent can market your home professionally for 3% listing commission, but you have to be sure and add the additional 3-4% buyers agent commission. Please contact me if you have more questions, I live in 95130 and work in West San Jose, Campbell areas 90% of the time.

Theresa Wellman
408-839-4196
http://www.homeownerexperience.com
0 votes
Amir Shahkar…, Agent, Cupertino, CA
Mon Oct 1, 2007
I am not a cut rate Realtor. I definetly make sure the house is sold. Come companies even advertise in their name "help to" or "assist to". But I go much further than that. I actually go out, get the buyer and get the house sold, gauranteed.
0 votes
#1, , San Francisco Bay Area
Sun Sep 30, 2007
SO AMir... are you agreeing with me or disagreeing with me? Are you a cut rate broker?
0 votes
Amir Shahkar…, Agent, Cupertino, CA
Sun Sep 30, 2007
It all depends on what value you are getting for your money. Some agents charge very small amount but do almost nothing to get you a buyer. Some of these cut rate agents have lots of listings all over in South Bay, Penninsula, East Bay, Sacramento, etc.
0 votes
Michelle Car…, Agent, Coppertino, AL
Sun Sep 30, 2007
All commissions are negotiable-for example, we have 4-6 different programs & strategies for sellers. Were the agents you interviewed referred to you by people you know? People you've seen post SOLD signs in your n'hood on a regular basis. That's a good place to start.

Did you ask whether any agents would be negotiable? Before you go straight to Redfin, do a little more research--because in a difficult market, RESULTS/ Closed Sales are the most important criteria--1% of nothing = nothing for you, plus you'll have blown your first, best chance to market vs. 5% for them and a sale for you is your goal.

However, talk to a few people who HAVEN'T sold and ask them what they'd be willing to pay.
0 votes
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