How much can a realtor make on a lease agreement versus a sale of a home?

Asked by HDV, Austin, TX Wed Jul 14, 2010

I am thinking of having some of my properties managed and want to know in general how much a Realtor who would find someone to lease my house versus sell my house make in commission?

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12
Bill Austin, Agent, Austin, TX
Wed Jul 14, 2010
BEST ANSWER
HDV,
The short answer is all Realtor commissions & fees are negotiable. Here is what I typically offer a client.
Lease of a Home: 75% TO 100% of 1 month's rent. Depending on the amount of the rent.
Property management: 8% to 10% of gross rent. (I do not do this myself but have referrals)
Listing a Home : 6% of sale price which is split with a buyers agent.

If you'd like I have spread sheet that helps analyze lease homes fincially over time. I'd be happy to meet you and share a copy. Contact me directly phone, text, or email.

Best Wishes!
Bill
2 votes
Angela Foley, Agent, Arlington, TX
Tue Jun 5, 2012
I feel compelled to remind my fellow REALTOR's that a discussion of commissions charged, especially "common", "usual", etc., may fall under Sherman AntiTrust Laws and could cost you money and/or your license. Please be careful when talking commissions. My understanding is that you can say what you charge, but not what someone else does.

According to: Fillmore W. Galaty, Wellington J. Allaway, Robert C. Kyle (2006). Modern Real Estate Practice. Dearborn Real Estate Education, (Chicago, Ill).

"Price-Fixing - Price-fixing is the practice of setting prices for products or services rather than letting competition in the open market establish those prices. In real estate, price-fixing occurs when competing brokers agree to set sales commissions, fees, or management rates. Price-fixing is illegal. Brokers must independently determine commission rates or fees for their own firms only. These decisions must be based on a broker’s business judgment and revenue requirements without input from other brokers.

Multiple-listing organizations, boards of REALTORS, and other professional organizations may not set fees or commission splits. Nor can they deny membership to brokers based on the fees the brokers charge. Either practice could lead the public to believe that the industry not only sanctions the unethical practice of withholding corporation from certain brokers but also encourages the illegal practice of restricting open-market competition.

The broker’s, and agent’s, challenge is to avoid even the impression of price-fixing. Hinting to prospective clients that there is a “going rate” of commission or a “normal” fee implies that rates are, indeed, standardized. The broker must make it clear to clients that the rate stated is only what his or her firm charges."
1 vote
Lady you're so wrong it's funny. TALKING ABOUT COMMISSIONS BREAKS ANTI-TRUST LAWS? REALLY?! YOU should lose your license for saying that publicly.

SHHHHHH, don't talk about commissions, it breaks anti-trust laws. I WILL REPRESENT YOU FOR FREE if this lady has convinced you that talking about commissions breaks anti-trust laws... TAKE THAT TO THE BANK AND CASH IT!
Flag Fri Mar 31, 2017
F U ANGELA
Flag Tue Mar 21, 2017
I bet you're real fun at parties Angela.
Flag Fri Mar 17, 2017
Hmmmm, when an organization doesnt puts restrictions on talking about commissions, it makes me VERY apprehensive. I am in Financial Services and am happy to share my fees and commissions for services.
Flag Thu Feb 2, 2017
1st Zero-Emi…, , Austin, TX
Wed Jul 14, 2010
HPV,

That is between you and your Realtor, based on either what you are willing to pay your Realtor or what your select Realtor charges you.

Common commissions for a residential lease of a home can be either:
-one months rent for every 12 month lease
-10% of all rent throughout duration of lease
-Flat Fee
Again, it all depends on the Realtor's services though.

Keep in mind, the Realtor you hire will typically offer other Realtors half of that fee to bring one of their tenants to the table to rent your propety. This is an important question to ask your Realtor that you are hiring, because you would want to know if you Realtor offers less than half and how they may or may not play a role in the marketability of your property.

Commissions for selling a home can be anywhere from 3%-9%, and 6% is commonly seen.
Similar style split structures are seen with sales commissions as well.

Surely you are not deciding on whether you should rent or sell a property based on what a Realtor makes.

If you are trying to get a true accurate vision of what the Realtor would make, you should take a close look at the expenses involved as well.
More importantly though, in your decision making process, I encourage to consider your bottom line and your lifestyle of property ownership and how it relates to your personal and financial freedom.

Good luck out there.
1 vote
Christine An…, Renter, Bronxville, NY
Thu May 16, 2013
i paid a realtor a months rent of $2000 BUT it was a month to month rental and I was only there for 4 months! Am I eligible for a refund of the difference??
0 votes
Condo Joe, , Austin, TX
Thu Jul 15, 2010
The difference is considerale and oddly enough, leases take longer to get paid on for the most part. We change 80% of one month's rent for a lease and split 50/50 with the other agent's company. On a sale we charge a 6% brokerage fee and split that 50/50. So on a $1,000 lease, we make $400. On a $100,000 sale we (the company) makes $3,000.

Are you contemplating selling and/or leasing a property? I can give you an accurate analysis of what you might get for each. Send me an email with some info on the property and I can prepare a report for you.

Joe Bryson
Real Estate Alliance, Inc.
(512)451-0711 office
(512)203-4100 cell
jbryson@re-al.com
0 votes
Charles Whee…, Agent, Austin, TX
Wed Jul 14, 2010
I work in Hyde Park/North Campus and we charge 100% of one months rent. Just make sure that whoever represents the renters gets paid at least 40%. Anything less and your property will rent slower and for less money.
Web Reference:  http://praustin.com
0 votes
Bill Austin, Agent, Austin, TX
Wed Jul 14, 2010
HDV,
The short answer is all Realtor commissions & fees are negotiable. Here is what I typically offer a client.
Lease of a Home: 75% TO 100% of 1 month's rent. Depending on the amount of the rent.
Property management: 8% to 10% of gross rent. (I do not do this myself but have referrals)
Listing a Home : 6% of sale price which is split with a buyers agent.

If you'd like I have spread sheet that helps analyze lease homes fincially over time. I'd be happy to meet you and share a copy. Contact me directly phone, text, or email.

Best Wishes!
Bill
0 votes
Bruce Lynn, Agent, Coppell, TX
Wed Jul 14, 2010
Very little....normally we charge one month rent to get it leased. This would typically be split between Property managers then charge often 10% a month if you want them to manage the property. This also could depend on the amount of the rent. Small rent might command higher fees....high rent $4000-$5000/month might command lower fees.
Web Reference:  http://www.teamlynn.com
0 votes
Pamela Peck, Agent, Austin, TX
Wed Jul 14, 2010
Hi there,

To answer your question, a typical selling commission on a home is around 6%. To lease a home out for you, the Realtor's commission usually will be from 70%-80% of one months rent. A property management company usually charges 10% of each months rent to manage the property for you. I hope that is helpful! If I can answer any further questions for you please send me an e-mail at pamela@kw.com.

Have a wonderful day!

Pamela Peck
Realtor
Keller Williams Realty
pamela@kw.com
512-609-9877
0 votes
Moe Paknia, Agent, Austin, TX
Wed Jul 14, 2010
To locate a tenant for your rental property, commissions are anywhere between 70% to 100% of one month lease that will be split between two agents (comparing to a sale of a property 6% of the purchase price). In addition if you are looking for a property manager there is a charge of 7 to 10% of the monthly rent. I agree with others that you should interview few Property manger companies. If you have less than 10 properties a property manager/ Realtor can manage those for you. I work with many Investors that they have rental portfolio. We locate undervalued rental property for them, find a suitable tenant and mange their properties every month. If you have any question you can email or call me at 512-468-8788
0 votes
Jay Ferguson, , Austin, TX
Wed Jul 14, 2010
I normally charge 70% or 35%/35% for each side of one months rent. Compare to 6% of the total sales price if sold you are talking about a big difference in commissions paid. Management fees would be in addition to commission paid on leasing your properties. I would suggest you interview several property management companies to understand how they work and the associated fees, many can handle the lease listing as well as the property management. Good luck!
0 votes
Perry Hender…, Agent, Austin, TX
Wed Jul 14, 2010
80% - 100% of 1 months rent is what some people charge. They split that amount with any other agent involved.
0 votes
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