WHAT is normal commission rate for realtors in Minnesota?

Asked by Robbie, Mendota Heights, MN Thu Feb 3, 2011

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11
Susan McArdle, Agent,
Thu Feb 3, 2011
Robbie
In Minnesota, the buyers commission to the selling agent is paid by the Seller. Typically this commission is between 6-7% of the sales price. Out of that amount the commission is divided between buyers agent and their respective broker, and the sellers broker and their broker. So, approximately 4 ways. Heavy marketing sometimes dictates a higher commission, or raw land and travel typically is 10%. Hope that helps.
1 vote
Edina Realty is top shelf on charges, low tier performance and delivery. I have used them a couple of times - ALWAYS disappointing, over charged and they are just about useless. . I think Realtors have become lazy wit the internet and expect you to do much of the work - they are borderline car salespeople now ==
Flag Thu Sep 1, 2016
Pcassone49, Home Buyer, Mendota Heights, MN
Tue Jul 4, 2017
WHAT IS COMMISSION RATE IN UPTOWN MINNEAPOLIS
0 votes
Naughty_lil_…, Home Buyer, Mendota Heights, MN
Mon Jul 3, 2017
We are buying a mobile home first time buying one we are in Minnesota the Real estate company are representing the seller and us . Do they take it out of the money that we pay say like 35,800.00 or does it go beyond that .I don't even know the percentage rate that they get from the commission . I was wondering if it would be as high as 12% I looked on the internet and it has like 3 % of the total payment so i was just wondering so i don't get a huge shock.
0 votes
Mark Wilson, Agent, Pebble Beach, CA
Tue Apr 5, 2016
ListingBidder.com has recent historical data for listing proposals from real estate agents all across North America. This data shows that on the open market, where Realtors compete by submitting their marketing proposal and real estate commission fee rate, the total commission ask ranges from 3.0% to 6.0%. These commission rates vary by zip code and almost show a perfect bell curve with the bulk of these proposals falling around 4.75% nationally. Whether you are looking for the average commission rate in Minnesota or the average rate in Virginia, we have found the rate varies by zip code because the ask rate tends to drop as the home values increase. We would love to help you find a realtor: https://www.ListingBidder.com

Note: These figures represent the total commission rate which is usually split between the Listing agent and the Buying agent.
0 votes
Cameron Piper, Agent, Forest Lake, MN
Thu Aug 29, 2013
newka08,

The answer to your question really is a matter of semantics. Some will argue that the buyer pays the commission because the seller adds it to what they are willing (or able) to part with the home for. In other words, the buyer finances the commission because it is added on top of the seller's lowest sale price.

Others will argue the more practical side of the business and say that the seller pays the commission. In the vast majority of real estate transactions, the listing company (broker), the listing agent, the selling company (broker), and the selling agent are all paid from the same pool of money When a seller signs a listing agreement they agree to pay a certain amount for the real estate services they are provided. In turn, when the listing agent puts that property in the MLS they agree to share a portion of that money with the selling agent and the selling agent's company.

Cameron Piper
Keller Williams Premier Realty
612-839-4202
Web Reference:  http://www.CamPiper.com
0 votes
newka08, , Mendota Heights, MN
Wed Aug 28, 2013
Who normally pays the commission the buyer or the seller?
0 votes
Cameron Piper, Agent, Forest Lake, MN
Sun Feb 6, 2011
Robbie,

The largest misnomer in all of real estate is that all agents and companies are the same and can and will produce the same results. If that were true it would follow that you should hire the least expensive company to complete the task.

We as agents will all wholeheartedly disagree that all agents and results are the same and then proceed to tell you why we are better. But if we can all agree that our services are better than everyone else’s (and if we don’t, why would you work with us individually), then we should be able to agree that there is no such thing as a standard rate. If we all provide different services and levels of customer service and in the end we all produce individually unique results, I think we should all be able to agree that there shouldn’t be a standard rate for real estate commissions.

Financially you need to focus on the bottom line. I have yet to work with a single seller who when pushed on the topic was more concerned about how much they paid my broker than they were about how large the check was at the closing table. Don’t get too hung up on the commission rate, but rather spend more time analyzing the entire picture.

-Maybe you’re in a hurry and maybe you aren’t, but if you are, the agent/company that sells houses faster is more valuable to you than the person who isn’t.

-First time selling? The agent who can communicate the process to you is more valuable than the agent who is too busy to be able to help you through the extremely stressful and complicated nuances of the real estate transaction.

-Expect customer service? The agent who has the best systems and follow-up in place should be able to charge you more because the services they provide are more valuable to you. This is the single largest separating factor in all of real estate. The chasm between good agent agents and bad agents here is worth many thousands of dollars to even the least needy client. Don’t believe me? Wait until you have an important question and your agent takes 3-4 days to get back to you.

-Experience, knowledge? If lack of experience or knowledge were to cost you time, stress, or money in a real estate transaction, it wouldn’t matter if the agent were doing the work for free; you would expect some sort of restitution. Typically those matters flush themselves out in court or in similar hearings and are incredibly expensive.

I’m not saying that new real estate agents are bad people or will mess up your life. I am however saying that I wouldn’t want the sale of my home to be my real estate agent’s first anymore than I would want a surgery on my child to be their surgeon’s first. Then consider the fact that surgeons receive light years more training than a local real estate graduate – you make the call.

Moral of the story: Forget about commission rates, standard or not, and focus on the bottom line at closing. Find the best agent/company package for your situation and be willing to pay whatever they charge because they are worth it.

Cameron Piper
Coldwell Banker Burnet
Web Reference:  http://www.campiper.com
0 votes
Susan Hoffla…, Agent, Shoreview, MN
Fri Feb 4, 2011
I LOOOOOOVE this question. The first thing they teach in "real estate school" is everything's negotiable. There is no such thing as normal commission. There are trends about what most transactions are yielding, but no hard and fast rules. REALTORs are self-employed independent contractors for the most part. We do not have expense accounts or company cars (one of my clients actually thought that!). So, the commission we negotiate with our clients is usually the agent's own domain, within reason. Mind you, the industry is set up in such a way that an agent HAS to be with a brokerage to be licensed. And, that brokerage takes a chunk of the commission on each transaction, so, the pie gets divided up in several slices and the agent only gets one part of that.

Make sure your agent is explaining everything to you. Or, better yet, do some research on mplsrealtor.com to check out how the commission gets divided so you can know what's fair for your transaction. The market is still set up that seller pays all of the expenses, which is not fair right now!!! :) We get that, but it can't be changed. But, you need to know ALL of the things that get paid for out of the commission paid via the transaction.
Web Reference:  http://www.homestosellmn.com
0 votes
Steele V. Pr…, , Minneapolis, MN
Thu Feb 3, 2011
There is no such thing as a "normal" commission. Each company is free to set the fees that they charge. They can be a percentage of sales price, a set fee, hourly, trade, whatever the two parties agree to. However, as suggested, most companies charge a percentage of sale price. The average right now is about 5.7% (the average family also has 2.2 kids). Which means that companies charge anywhere from about 4-7%. This will normally be split between the seller agent and the buyer agent.

Most companies have set fees that they charge but some of the more innovative (my opinion) have a menu of options to choice from.

The important thing to remember as a consumer is that all fees are negotiable. And not just for sellers but buyers as well.

Good luck.

Steele
0 votes
Brad Anderson, Agent, Maple Grove, MN
Thu Feb 3, 2011
Commission is a negotiable fee. The most prominent rate is 6%, but can be anything you, and your Realtor agree on.
0 votes
Lois Hinrichs…, Agent, Hudson, WI
Thu Feb 3, 2011
Your average commision rate for the Twin Cities area is around 5-6% with 2.4-2.7% going to the buyers agent. Some charge more, some charge less. There is no mandated rate. It usually depends on price point, company policy and agent standards. Generally, you get what you pay for. Ask questions, demand answers and make an informed decision. Referrals from past clients that you can call is key. Hope it helps. Follow me to my profile if you have any additional questions.

Kyle
Web Reference:  http://www.HinrichsHomes.com
0 votes
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