what are the costs (commissions) of selling a home?

Asked by Andrew Pollack, San Francisco, CA Wed Jul 25, 2007

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California M…, Agent, Oceanside, CA
Mon Jul 30, 2007
Fees are negotiable. There are no set fees charged by Realtors.
Web Reference:  http://delmar.typepad.com/
2 votes
Fred Remick, , San Diego, CA
Thu Jul 26, 2007
What many consumers don't know is that there are no "set" commissions in California. By law they are "negotiable". What has happened (just like any other industry) is that these commissions have settled in at 5 or 6% (depending on the Broker/Office). Another option is a "Flat Fee" service (which I do) where the consumer is paying for the "service" regardless of the price of the home. These types can save you listing commissions, BUT you must be careful to find someone who offers (and executes) FULL SERVICE. This would mean: comping the property, high-quality photos, MLS, full disclosure package, signage, marketing (internet, print, newpapers, quality flyers), negotiating the best price, open houses, taking the entire transaction through the escrow/inspection process. I say this because many consumers don't understand that selling a home is so much more than just the MLS. I hope this helps!
1 vote
The Hagley G…, Agent, Pleasanton, CA
Mon Jul 30, 2007
There agents and flat fee companies that will tell you that they will sell your home far below the other agents that you interview. If it sounds too good to be true - it probably is. I recommend interviewing at least three different agents. They should be prepared with a marketing presentation and comps. The least expensive agent does not always mean they are the best. Ask about their most recent home sales in your neighborhood. Ask for references. Ask them specific questions about marketing. WIll they provide specific inofrmation to you on a weekly basis about website hits, number of showings, follow up comments on those showings, etc? Aske them if tey are a Realtor - a member of the National Association of Realtors. A Realtor is much different than an agent. Ultimatey, you get what you pay for.
Web Reference:  http://www.cindihagley.com
0 votes
Stephen Sul…, Agent, Palm Springs, CA
Fri Jul 27, 2007
hey there- commission is one part of a home sale. If you're selling in SFO you also have Transfer Tax, Title Fees, Pre-sale Inspections etc... Your agent can help you with an Estimated Selling Costs worksheet so that you can have a better understanding of all your expenses... When interviewing agents, be sure to ask for examples of their past mktg efforts; postcards, magazines, newprint & internet. Commission is how we pay for our biz expenses; make certain you're interviewing someone that will be making significant effort on your behalf!!!
0 votes
Keith Sorem, Agent, Glendale, CA
Thu Jul 26, 2007
There are many costs in the sale of a home.
Strictly answering your question, here is an response I posted earlier that exlplains closing costs:
You ask your REALTOR to refer you to an escrow or title company (depending upon who prepares closing documents in your state)
Generally they include:
Principal Balance

Estimate For Termite Report/Completion
Estimate for Home Warranty
Disclosure Source NHD Disclosure
Department of Building & Safety 9A Report
Department of Building & Safety Certificate of Compliance

Owners Title Policy Fee (S) to SELLERS CHOICE
Documentary Transfer Tax
City Transfer Tax

Escrow Fee
Drawing Grant Deed
Notary Fee
Wire fee if any
Total all of all charges:
If the total closing charges exceed the sales price, then the next item will be
Funds required to close (meaning you need to bring a check to the closing table.
If there is a positive number (known as net proceeds), then you receive a check at closing.

The actual amount can be relatively accurately estimated. At the time you consult with a Realtor regarding listing your home for sale you should discuss your estimate of the net proceeds. If he/she does not bring it up, you should.

The single most important factor affecting net profit or proceeds is market time. My research consistently shows that properties that sell within the first three or four weeks net the most. The amount that you net AFTER closing is the number on which to focus.
0 votes
J Lo, Home Buyer, California Glory, Brentwood, CA
Thu Jul 26, 2007
Time is money. I believe that is what Phu is saying in his response.

My broker sets my rate. I agreed to honor this rate when I signed on to his agency. I am a professional and make no apologies for what I believe to be an honest days pay for an honest days work.

In Southern California I sold a home in November 2006 - I offered an additional .5% commission to the selling agent on the suggestion of my realtor. I wanted to be competitive in a market that was starting to slow to a crawl.

I had a fantastic product - I made it a deal worth buying - and we (my agent & I) sold it under the worst of conditions - above all other competition in the subdivision.

What was my cost? Irrelevant to what my "loss" would have been had I not sold when I did....
0 votes
Phu S Nguyen, , Silicon Valley, CA
Thu Jul 26, 2007
While many sellers and agent focus on the commission as the cost of selling the homes, the true cost also include the cost of you keeping the home on the market. It is important to know what the commission will be, but just as important are the services that are included with the commission.

If I was a seller, I would pay more attention to what the services the agent are providing and what the agent track are at selling homes in that area. Commission should be second, because who cares what the commission is if your home are not going to sell anyways.
0 votes
Rebecca Cham…, , Palos Verdes Estates, CA
Thu Jul 26, 2007
As the others have said, it it varies from agent to agent. What you want to find out is what that agent does for the commission, how much do they spend on marketing etc. Also let's say someone charges 6% total commission, half goes to the agent who brings the buyer...so it's 3% per agent. A percentage of that generally goes to the company they work for (sometimes up to half) so that's 1.5% and then consider taxes for an independent contractor (another 50% or so) so, .75% and then all marketing and expenses come out of what is left. Real Estate is a costly business and I often wonder about the agents that take reduced commissions, where they might be cutting corners? Other costs of the sale are Escrow and title fees (usually about 1% of sales price) and transfer taxes which vary from area to area.
0 votes
Artur Urbans…, Agent, Burlingame, CA
Thu Jul 26, 2007
Andrew, prices of agents and broker services vary. Historically, the most popular form of payment were (and still are) commissions. Commissions are always negotiable. It happened that the average commission in California is equal to 5.1% at the present time. There are many, many other options, such as flat fee, etc. I will not get into discussion regarding differences between service levels of different brokers. However, I believe that in the future there will be a clear distinction between agents providing "conventional" transactions services, as in the past, versus real estate consultants. Consultants will be providing services including real estate, mortgage planning, investment panning and support and possibly many others.
Web Reference:  http://www.cimpler.com
0 votes
Michelle Car…, Agent, Coppertino, AL
Wed Jul 25, 2007
Separate from commission, which is always negotiable and costs for repairs/credits, expect to pay about 1% of your price in closing costs (e.g. title insurance, escrow fee, city & country transfer fees, document, reconveyance, recording & document prep fees). As far as commission, many professionals offer a range of service choices - for example, we have 4 different programs for sellers.
0 votes
Irina Netcha…, Agent, San Marino, CA
Wed Jul 25, 2007
Dear Andrew, the costs of commission vary from agent to agent, so do the services that agents offer for the commission charged.

Good luck with the sale of your home.
0 votes
Mario Pinedo,…, Agent, Cupertino, CA
Wed Jul 25, 2007
It depends on the agent that you hire and what you negotiate with them. On average most transactions will be in the 5-6% range for full-service marketing of the property. There are companies and agents that charge less, although services will tend to be less and this will affect the exposure and demand by the buyers. If you want to discuss selling your home in San Francisco, drop me an email through my blog.
0 votes
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