Profile picture for ycnim

Commission to realtor usually 1-2%?

I was sharing with my mom how our realtor is charging 1% commission.  Another friend of ours who is a realtor charges his clients 2%.  My mom did not believe me and kept saying when she sold her house years ago, they paid out 6%.  I think she's confusing the commission with perhaps closing cost.  What do you think?  What is the norm these days?
  • December 11 2010 - Nashville
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Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

 
 

Answers (38)

Profile picture for ziggidyone
Depends on the local market. In Oregon, it's 2.5-3% for each side. So, if you list with an agent, they will go for 6%, and you can talk them down to around 5%, which is 2.5 to each side. If you want to save this money, you can do it by yourself, but it is challenging and involved. For those who are brave, there are resources available to you.

[promotion deleted by Zillow moderator. Please see our Good Neighbor Policy for posting guidelines]
  • December 13 2014
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Profile picture for Alan May
Okay... this question was asked in 2010.  And yet, keeps surfacing.

Commissions, by law, are negotiable.  There is no "norm" these days, nor any "standard, regular, usual, common, typical or traditional" commission.  Some agents will negotiate their commission, and some won't.  It's often based on what services they offer.

Sometimes agents will separate the % commission they charge the seller, from the % commission paid to the buyer's agency.  So they may quote that they're charging X%, when in fact there's another X% due the buyer's side.

Always important to address the right questions.
  • December 05 2014
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Profile picture for alandalerob
Debbie R., so what if this thread is two- now three years old? It is still a good question and it does not expire with time.

All - that is the problem. Realtors have the "all mighty" complex, thinking that you now have dominion over both time and space... and your hard-earned money. Get a grip, Reator.

And we don't have to pay you such costs. I object to them, personally. Just another greedy tax on the poor!

People! Listen Up! You can hire an agent for their time and piss on the proverbial percentage. If they won't work for you at an hourly cost, then hire someone that will.  Do you pay a sales percentage when you buy a car? NO!

Advertise your home on Craigslist and sell it on your own! Save your money from these carpetbaggers.
  • December 05 2014
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Profile picture for Dunes ..
All of the following/below is from the Dept of Justice Anti-Trust web site...

"Brokers typically charge a commission based on a percentage of the home's sale price. Over the past decade the average commission rate has remained relatively steady between 5.0 and 5.5 percent. "
Home prices and commissions over time

Other options available to consumers

In many parts of the country, the traditional full-service real estate broker now faces competition from a variety of real estate brokerage models, many of which use the Internet to reduce costs:



Fee-for-Service Arrangements

Brokers willing to sell a subset of real estate brokerage services, often called fee-for-service brokers, have emerged throughout the country. Fee-for-service brokers "unbundle" the package of real estate services typically offered by traditional full-service real estate brokers and charge a set or hourly fee for specific services, such as listing the house in the MLS, negotiating or closing contracts, and pricing the home. These brokerage models typically enable consumers to save thousands of dollars by allowing them to purchase only those services they want.

Learn more: Fee-for-Service Brokers

Rebates and Inducements

Some real estate brokers have increasingly begun to compete for customers by offering cash rebates or other inducements to home buyers and sellers. Rebates that go directly to buyers or sellers lower costs on both sides of the transaction. Cash rebates are usually calculated as some fraction of the broker's commission and can result in thousands of dollars being returned to the consumer.

New business models can save consumers money

Most consumers want to make as much money as possible on the sale of their home and spend no more than necessary when purchasing a home. In many cases, the standard broker's commission can offset a portion of the equity value that has been building up in a seller's home or push the price of a home beyond a buyer's purchasing power. Consumers who want to perform some of the steps involved in selling a home can reap significant financial savings by purchasing only those real estate brokerage services they actually want.

Competing models of real estate brokerage

  • June 09 2013
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Normally it is 6%, 3% goes to the listing agent and the other 3% goes to the selling agent. 

Commission is fully negotiable, and often times agents will discount their commission if they are representing the seller as a buyer on another property as well.

If a seller is not offering a competitive compensation, then the buyer's agent may not show the home to potential buyers, or may require the buyer to compensate the rest of the percentage based on the buyer's agency agreement. 
  • June 09 2013
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Profile picture for user6075722
Why? the seller to pay the buyer realtor?
agent of real estate buyer does not represent the interests of the seller
  • May 03 2013
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This question was asked over 2 years ago, but is STILL RELEVANT today!
  • March 28 2013
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Your mom is CORRECT! ... Usually, when a real estate agent is obtained to SELL your home, the most common amount of commission that is asked for from the seller is 6%! ... HOWEVER!, the commission is most often split 50/50 between the the sellers real estate agent, and the buyers real estate agent! Therefore, neither real estate agent gets more than 3%. ACTUALLY, most real estate agents get EVEN LESS than 3%, because of the 3% that is received by either of the agents, a certain percentage of that is PAID TO THEIR BROKER! - So, they actually end up with even less than 3%. The reason why your real estate agent is charging 1% or 2% may be to make up for all the losses from all the splits! If you are a BUYER and you agree to pay a commission to your real estate agent (taking into consideration the fact that they dont usually end up with very much after all the splits), that would be very kind of you!

Best Wishes and Warm Regards from The Sunshine State! :).
  • March 28 2013
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Your mom is CORRECT! ... Usually, when a real estate agent is obtained to SELL a home, the most common amount of commission that is asked for from the seller is 6%! ... HOWEVER!, the commission is most often split 50/50 between the the sellers real estate agent, and the buyers real estate agent! Therefore, neither real estate agent gets more than 3%. ACTUALLY, most real estate agents get EVEN LESS than 3% because of the 3% that is received by either of the agents, a certain percentage of that is PAID TO THEIR BROKER! - So, they actually end up with even less than 3%. The reason why your real estate agent is charging 1% or 2% may be to make up for all the loss from all the splits! Be weary if you are a BUYER and your real estate agent asks for a commission commitment. You may agree, but, customarily, commission is paid for by the seller for around 6-ish percent.
  • March 28 2013
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Profile picture for Dunes ..
Yeah person who asked this in 2010..
Ya don't want to hire one of them Lazy dues payin National Association of Realtors Realtors that work for less than the Standard 6%

Remember......hire one of them they charge more Realtors so you do not end up with a Lazy dues payin National Association of Realtors Realtor
The more ya pay the more they's worth









  • March 27 2013
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Dear Ycnim,
Sorry! We as professional Realtors are not allowed to comment upon commission amounts by law.
I can tell you that 1% is the lowest I ever heard of while 15% was the highest!
Good Luck!
  • March 27 2013
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does anyone care that this question was asked over TWO YEARS ago?????
  • March 27 2013
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She is probably referring to closing costs.
  • March 27 2013
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2% is not unreasonable for a Realtor acting as a Transaction Broker only. If you found your Buyer and never had the property listed, most Realtors are happy to handle the paperwork for you for a 2% fee. This of course is all relative to the sales price. If your property is only worth $10K than no percentage amount is going to work. In that scenario, a flat fee is usually agreed upon. But.... Generally speaking 6% is the standard.
  • March 27 2013
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I would like to add something which I direct at the people that believe 6% is too much for a realtor and that they are being greedy...

Let's say that a home or condo is listed at $100,000. 

6% = $6,000 total commissions

That is split between Listing and Selling agents so 3% or $3,000 each.

That is then split between the realtor and the broker.  I will not list any company names here but I have personal experience at a broker that took the following...

$210.00 - 7% of $3000 for the parent company off the top(like a franchise fee)

The remaining $2,290 is split between the broker and the agent at whatever commission level they are at.  Agents start at 50% - 50% split and work their way up.

Of the $1,145 remaining, agents usually but not always pay a per transaction Errors & Ommissions insurance policy in case the agent or their client gets sued.

$1,145 - $150 = $995

$995 is a far cry from $3000.  I know that many agents make higher splits and I personally am not looking for sympathy, I just wanted to share that all this money is not going into an agent's pocket. 

There is no set commission for real estate transactions; it is completely negotiable between the agent and their clients.  I agree with someone that earlier wrote that the days of 6% are diminishing... the majority of homes for sales these days are listed at 4-5% of the sales price which decreases the agent's pay in the example above even further.  I will say I completely disagree with the lady that said all you need is MLS exposure and a yard sign.  That may be the case in some markets. But an agents job is not just to get a home sold, but to look to the seller's best interests which is the highest possible sales price. They do this by creating more competition which is accomplished by marketing. The more the better!

Hope this helps!
  • March 27 2013
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Profile picture for wilsonrenick
Take some simple and easy advice that you can apply to everything in life...  "You get what you pay for."  Any Realtor willing to take the bare minimum is only worth as much as you are paying them.
  • March 27 2013
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Profile picture for user7864427
For many years the realtor stolen the American people, taking advantage of their ignorance
only represent their interests, not those of buyers or sellers
only the title company is what you need
  • March 27 2013
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YIKES!! I am amazed at some of these answers...
Tools, technology, lead generators, websites, old fashioned marketing techniques  are NOT free.
If an agent negotiates their commission that is a personal business decision and I would never judge those that do...however...ask the top 20% of Realtors -who are STILL in the business and survived the last 2 yrs and you bet they are NOT working for 2%...you can also check out stats for Realtors at NAR's website or ReisMedia magazine.
We have lost 1/3 of Realtors nation wide-the middle 3rd are surviving by cutting their value..the top agents are providing cutting edge tools far above what simply "putting it on the MLS" can provide.
  • April 28 2011
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natasha, I sooooooo appreciate  your refreshing honesty and perspective.  I get so tired of agents spouting the same old stuff over and over again and I always have to wonder if they actually believe the stuff they spew.

I am curious though, since you mentioned your salary your last year in RE, was that as a traditional agent or were you able to make that as a flat fee agent?
  • March 09 2011
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Profile picture for SoCal Engr
"You get what you pay for."

I disagree. You hope to get what you pay for, but to do so requires effort and research on the consumer's part. If you are an informed consumer and have decent negotiation skills and a working BS detector, you may be able to get what you negotiate for.

As I think about it, the most important thing a consumer will do in any transaction is take the time to self-educate so that they are not reliant on the opinions/directions of others - especially when the "others" stand to make more/less money based on your decisions.
 
The second most important thing a consumer will do in a traditional RE transaction is likely the selection of a REA and negotiation of the terms of business.
  • March 09 2011
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Profile picture for natasha54
Hi,
I was a realtor for eight years making 150K my last year in real estate. Your commission rate is negotiable. Realtors are going to have to realize that the great days of 6% commissions is vanishing. When houses have lost so much value, realtors need to "get real".  And all this silliness about "you get what you pay for" is coming from people who want to make their 6% (or 3/3 split).  I've seen terrible realtors walk away with their 6% for the same amount of work that a "great" realtor walks away with 3%. There are competent realtors who work for flat fees or much lower commissions who will do a good job of selling your house. The MLS is the primary tool that sells a home. Don't let realtors keep telling you that you need all these "wonderful" things they provide. Open houses are a client-getter for realtors. You don't need them. You don't need newspaper advertising. You need a yard sign. Your house needs to be in the MLS (probably although my sister's sold 3 houses by herself ) If you are in the MLS, then your house automatically will be listed on realtor.com,etc. without your realtor lifting a finger. You need a competent realtor to help with the paper work - a flat fee is enough for her/him!  That's it. Now, realize that because realtors are spoiled, that selling realtor is going to want her 2.5% or 3% but there is no reason to pay your listing realtor another 2.5% or 3%.  So, you should be able to sell your home with a competent realtor for a maximum of 3% plus a flat fee ranging from $200-$500.  That's a hell of a lot better than paying 6%. If your flat fee realtor actually sells your home, then you get out for $200-$500 plus a few fees for doc preparation, a termite inspection etc (these fees don't amount to very much)
I don't work in real estate anymore. I'm not trying to sell you anything. I just want to tell you the truth!
  • March 09 2011
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Commissions for the sale of realty are negotiated between agency and client and the traditional figure is 6%.  The total commission is split between the listing brokerage and the selling brokerage.  The percentage of the split is negotiated between brokerage firms. In Knoxville, Tn, the traditional commission of 6% is, on average, split 60% to the listing brokerage and 40% to the selling brokerage.  An old adage applies here:  "You get what you pay for."  If you "Realtor" is charging you 1%, I assure you you're getting the worst service available in the market.
  • February 23 2011
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When you contact a Realtor to list your home the commission is set by each Real Estate office independently.  Our commission in our office is 6%.

The most important factor is that you are working with a licensed Realtor and that you are confident that you are going to be represented accordingly.  You are paying for excellent representation, marketing, and advertising.  Make sure you are shown in black and white what your Realtor is going to be doing to sell your home.

  • February 16 2011
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Finding a competent sales person who will aggressively market and sell your home is, in my opinion, a much larger factor in choosing an agent. As others have pointed out, we have very strict regulations on what we can and cannot comment on for very good reasons.

How quickly do you want to sell your home and how much guidance and protection do you want to receive? Those are the questions that should be high on your requisite list.
  • February 16 2011
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Profile picture for Dunes....
In a Competitive Declining Market I would avoid the Agent who only shows the Properties that make them the most money....
In a Competitive Declining Market there are a LOT of EXCELLENT Agents who compete by lowering the amount they charge in order to get Business...

"You get what you pay for" is just a silly Cliche that most everyone knows is often NOT true...."You often DON'T get what you pay for" is a FACT most people are aware of.

Become informed and Shop wisely
  • December 15 2010
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True answer is that you frequently get what you pay for. I tell all my listing clients that my fee is 3%, and they must determine what they wish to pay the buyer's broker. In a competitive declining market, what would you do as a buyer's agent? Would you try harder to sell a home that paid a 3% buyer's side commission, or 1%?
  • December 15 2010
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Profile picture for ycnim
My husband said his friend that's a realtor does charge 3% for buyers 3% seller, so that is 6%.  But this same friend does offer 2% at times.  Another friend of mine who's a realtor says she charges 1% and then if another agent buys we would owe 3% = 4% all together.

So guess it varies.
  • December 13 2010
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Your mom is right. I doubt many agents charge 1 or 2% as the total listing fee and I have been doing this for 24 years, but it can happen under special circumstances. The average listing fee is between 5-6% but is fully negotiable with land listings in the 6-10% range. To use 6% as an example, 3% goes to the selling agents company and 3% goes to the listing agents company. Each company can split their 3% with their agent any way they want from 50/50 to as much as 90% of the 3% on their side of the transaction. So bottom line and agent sells a house and gets half of the 6% and then splits with their company and so the agent walks away with 1.5% or more in his pocket.
  • December 13 2010
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There are lots of different models out there.  I am a Tennessee licensed broker and member of the Realtracs MLS used by the Greater Nashville Association of Realtors (GNAR) and we charge a $449 flat fee for sellers to list their home.

Flat fee is one of the newer models, when we started in 1998 it was unheard of, now it's popularity is growing but still less than 10% of sellers know about it.  If you shop around, you will find lots of variety in the level of services and price.  The web really helps shopping around, you could google "buy self flat fee mls tennessee" or tenn discount broker, etc and see all the choices.  As always, when choosing a service, do your homework:  check bbb.org, type in the company name at review websites like Google Places/Yahoo Local, call them, and ask for references.  Any established brokerage should have good information for each of those reference points.
  • December 13 2010
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For what it's worth, agents shouldn't discuss commissions among themselves , not because they are trying to hide anything, and not because of the Realtor  Code of Ethics - it's because of a little something called the Sherman Anti Trust laws.............for those who have no idea what I am talking about  - look it up - or, you could check with your ,local  Board of Realtors or better yet, your state's Real Estate Commission.
  • December 11 2010
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