Profile picture for melmom8

At 4% commission with other brokers show my house? I assume they will get 2% which is better than 0

I got a realtor to charge me 4% because I am also buying a house from her.
I only want to be tied into a contract for a few months.  Will brokers show my house or is the commission to small?  The price is more competitve than other homes around and it is a better property.
  • February 08 2012 - Youngsville
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Answers (19)

Absolutely, if a realtor does not show a home because he or she is not going to get the highest commission, then who are really looking out for?  NOT YOU.  There  is no reason for a realtor to charge 6% or 7% to sell your home, it is pure greed.  Do not let them tell you they do a better marketing job, or they have inside information on homes in the market.  This is just a a ploy to convince you to sign a contract where they take your hard earned equity away from you.  All commissions are negotiable and it is illegal for realtors to collude and set a so called "market rate" such as 6%.   
  • May 06 2014
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Profile picture for rfcollett
First, find out what is the norm for your area.  In Northeastern Ohio, the traditional base commission is 7%. However, today many listings are at 6%.  It is common practice to list 6% for the first $100,000, and 5% for anything over $100,000.  When I work with a buyer to find them a house, I do not consider the buyer side commission.  If the house is a good fit, then I show it.  On the other hand, when I am listing a house, I always offer 3% or 3.5% to the buyer's agent, even if I take less for myself. 

More importantly, I would ask why you would want to work with an agent who offers to list your house for less than the going commission rate.  Too many buyers think they are saving money by gettng a lower commission.  I would argue that it will cost you money. A good ageny will likely "pay for" his own commission with effective buyer side negotiation.  You want an agent to invest time, energy and money in your listing.  If he or she is not worth the going commission rate, then you probably have the wrong agent. Consider that time on the market equates to more expense to you because you are still paying taxes, interest, insurance, etc. Sure, ask your agent to take a bit less on the back end (after the first $100,000), but make sure that you are paying them enough to motivate them. It is also effective to ask them to accept a lower rate if they bring their own buyer.
  • March 18 2014
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Profile picture for GSargent
IMO, 4% should be the co-op rate. 

What the selling agent does with the "extra" 1% is up to him/her. 

I have done research that shows that homes with a higher co-op commission get shown more.

More showings = quicker sale.
  • March 18 2014
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Nothing in the Code of Ethics requires a REALTOR to work for less than they deem appropriate.   To ensure I get  my fair shake I put my buyers under contract.   I won't list a house without a contract and I won't show houses without a contract.  The contract specifies that the buyer will be credited any compensation paid by the seller.   Before they sign I show them what I am going to do for them
  • February 10 2014
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Profile picture for vawing
as a buyer of many homes and selling, I just think it is wrong to say everything is 6% listing fee.
A lower priced home should be at a 5 or 6 percent but a higher priced home should be less due to the amount of money made by realtors and brokers.
4% needs to be negotiated much more often on homes 250K and up and should become standard.
The public are the ones that need to say no to these Brokers that simply charge to much and look elsewhere or just go FSBO, it is still listed on the MLS and has the same nationwide showing .

remember the Brokers are the crooks in this battle not the agents, sorry for the "crooks" it's true, you personally hold the public hostage to your 6% and it's like a mafia thing between the brokers to keep this rate high.

The public needs to learn to say no, and go looking brokers who want to make more money need to advertise the lower 4% rates, they could charge, on higher priced homes..

My thoughts should get some interest, Bob Taylor   Sparta Tn.
  • February 09 2014
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Gee, Dan, I thought you'd know by now that not all agents are Realtors®. So right there you have a segment that does not subscribe to the Realtor® Code of Ethics or is a member of NAR.

But this is only an ethical problem if an agent is actively working with a buyer and doesn't show a home based on the commission. (Actually, this is also how agents could protect themselves with a buyer agency agreement - the buyer and agent could agree on a commission, and any difference from the co-brokerage arrangement could be made up by the buyer).

What people don't seem to get is that a lot of homes are sold because an agent picks up the phone and calls someone who is not actively looking, someone who doesn't expect the agent to be actively looking, and someone who is not in an agency relationship with the agent.

Finally. When showing houses to a buyer for the first time, agents may very well put the lower-commission houses at the end of the list - if a buyer decides to buy one of the first homes they see, the agent isn't obliged to make them see all of the others on the market, are they?

  • February 10 2012
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Profile picture for the_country_hick
After reading this thread and others that are similar just how does the NAR code of ethics really work?

No, I will not show that property because I would get 1/2% less in commission? How is that not an ethics violation?

No ethics exist when it comes to many realtors commission it seems.
  • February 10 2012
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" There is no set commission,as law in NJ does not allow it."


Well, that's not just in NJ..............legally, all commissions are negotiable, no matter where you are in the country!
There is no "set", "customary" or "usual" commission.

I can only speak for myself........As a buyer's agent, I would show any listing that suited my buyer's needs..........that particular compensation might not thrill me, but I would be thrilled to have a happy client who will refer me to their friends..or use me again in the future........always have to look at the big picture.
  • February 10 2012
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Profile picture for Caveat Emptor
so, price fixing is illegal,
collusion is illegal,
yet you only see 4% commissions on "new constructions" "sometimes."

Sounds like the NAR has that one tied up in quite the nice little bow, doesn't it?

re the OP, in some areas the standard split is actually 40/60 or 2.5%/3.5%. if this is standard where you live, you would be depriving a self interested agent a whole 1.5%(1500 per 100,000). Of course as we all know agents only do what's in their buyer's best interest. Fiduciary duty and all that.
  • February 09 2012
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When a buyer negotiates with a for sale by owner,the buyer usually deducts a perceived  6% commission from the asking price before making an offer. When a property is listed with a Realtor,a prospective buyer will make an offer on the sale price without knowing or caring what the commission is. The price of the home should encompass the commission.
As for 4%, In New Jersey at times we see that on new construction. There is no set commission,as law in NJ does not allow it.
 Resale homes command more time and effort to sell on the part of the Realtors.
 In todays market with so much competion and so many available homes, if you want to expedite the sale of your property I would advise offering higher commissons to entice the showing of your home. The negotiated sale price should cover the commission. 
  • February 09 2012
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If she is making full commission selling you a new home than she prob. should be reducing her commission on your selling side.  That is up to you and the agent but remember that if she is making very little 1% selling your home then your services and the amount of time spent marketing etc. is reduced Period.  As far as showings, if there are 100 homes on the market offering a buyers agent 3% and then your home at 2%, which homes are they going to show in a slow market or any market??  I reduced listing commission thus "buyers agents commission" on two homes in 10 years and refuse to ever do again. 

Personally I work to hard....  but on the ones I did reduce they were rarely shown and ended up reducing the list price to finally get the showings.  Seller ended up with less than if they had just paid the commission to get the buyers coming thru in the first place. 
  • February 09 2012
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Profile picture for sunnyview
If you are buying a house with that agent, then I would ask her to change the split so that the buyers agent gets a more generous 2.5-3% and she takes 1-1.5% on the listing side for a total of 4%.

The buyers agent is not supposed to avoid your house because of the size of the commission, but they are business people with families to feed too. So you have to be a realist about how many showings you will get with a reduced commission. Talk to your agent and ask them what your options are also make sure you are priced right out of the gate.
  • February 09 2012
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So, here's the real world answer:

Agents who are working with buyers are probably not going to care. However, that's really just a portion of the market.

There are A LOT of agents that work with investors, builders, people that I would call, not especially motivated but open to a good deal. Move-up and move-down buyers can fall into this category, because while they're not actively in the market, agents are often looking for a good listing to sell to them so that they can get that buyer's home on the market!

Anyway - point being, agents working this type of buyer may very well ignore your listing, because. Just because. They see a commission rate 1/3 or 1/2 of what they were hoping for, and they think, "Well, maybe not."

Now, if one of these buyers were to call them up on your listing, most of them would probably try to sell it to them.

But to pick up the phone to try and sell it, maybe not.
  • February 09 2012
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I agree with many of the Agents who have responded to the 4% commission question. It is our ethical duty as Buyer Agents to show all homes to buyers when working as a Buyer's Agent.

 Not all Agents feel this way, and even the best of Agents may feel a bit of resentment after they've been working with a buyer for several months and have shown 50+ homes to a buyer knowing that there's another 2 hardworking months of work ahead after an offer is accepted.

If I negotiated a commission as a Listing Agent because of a multiple transaction situation with the seller, then I would give a greater commission split to the Selling Agent in the best interest of selling the home for the seller.

  • February 09 2012
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The theory is that buyer's agents should show homes that are best for the buyer, but not every agent works that way.  I always advise my clients (seller's) to list at 5% or more if there is a Co-operating agent and I give a discount to 4% if there is none.
  • February 09 2012
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I personally completely ignore the commission amount when showing buyers properties. I work to get them the best property for their needs, not the best property for my wallet. Although, there are some brokers/agents out there, that won't show a lower commission property. 

That being said, your agent could be offering a normal compensation to a buyers agent, and just be taking the commission cut herself. Check your listing contract. There should be a section that says something like "Compensation to Others" or "MLS offer of Compensation." This will tell you how much she has offered to buyers agents.
  • February 09 2012
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There are few percentage of Realtor who would not be pleased by lower commission offered. Also some listing agent may cut corner on their marketing budget due to low commission.

At the end depending on how your home shows compared to other competition, where you are priced and the demand for your home will determine if lowering commission was worth for you or not.

If you don't get many showings you can always updated the listing the going market rate.

Good Luck!
  • February 09 2012
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Your listing broker might have considered having you pay the buyer's agent the going rate of commission to make sure your home was not passed by
AND offered to lower her rate of commission charged you since she will receive commission on the buy side.

  • February 08 2012
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Profile picture for Sharon Lewis
Most Realtors will show your home, a lot of us do not look at the commission, we are there to serve our clients needs.
  • February 08 2012
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