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Answers (22)
- klarek the realist
- Contributions:7051
I've read a lot of your posts and obviously you have a grudge with the NAR. I don't know the situation, but, it must have had a brutal impact.
They're a callous, deceptive, thieving, criminal enterprise. There's no personal situation, I just abhor cartels in general. NAr is exceptionally disgusting for a number of reasons.
They're a callous, deceptive, thieving, criminal enterprise. There's no personal situation, I just abhor cartels in general. NAr is exceptionally disgusting for a number of reasons.
- Joan Braunschweiger, "Morris County NJ"
- Contributions:1504
I'm a little reluctant to keep this old thread alive for the purpose of discussion, but when in Rome....
@Dennis: "The free market is based on who advertises the best and reaches the largest number of qualified consumers."
I would respectfully disagree. Advertising means nothing if the product is overpriced, shoddy quality or serves little or no purpose to potential consumers.
The internet has changed RE immeasurably. Print advertising, with the possible exception of niche properties(such as historical) is virtually obsolete. Almost all properties, with few exceptions, are sold through the mls. The public has access at their fingertips to virtually all available properties.
Therefore, listing agents do NOT normally need to spend a lot of dollars on marketing. Most marketing happens with a touch of the button. Flyers aren't all that expensive and most print advertising is local (with the exception of very high end properties) and usually done because sellers like it that way, not necessarily because it attracts more buyers.
Buyer's agents may have less costs involved for a particular transaction. However as we all know the amount of time and gas involved with ferrying buyers around and researching properties can be considerable.
Just like listings some are more time and cost intensive than others.
- Dennis Knight, "The NJ Realtor"
- Contributions:53
Dan:
I agree that 7% on a 300k home is expensive. I have yet to come across a home needing that much extra marketing.
As to "too little". If you had a house to sell at the biggest discount and told no one, you're at the party alone. Sorry for the extreme example.
Klarek:
I've read a lot of your posts and obviously you have a grudge with the NAR. I don't know the situation, but, it must have had a brutal impact.
I don't promote non-negotiable fees. The percents I used were for example only.
As to a free market - really? The free market is based on who advertises the best and reaches the largest number of qualified consumers. Every product you buy is based on demand and profitability. Like it or not, the best products are the ones marketed in the best way and to the right consumers.
Joan: You're right, commissions are never set. I personally base fees on the projected costs of marketing. Buyers agents have less costs involved and should receive less. Listing agents need to step up and do the marketing to the fullest extent possible.
Just one reminder of paying too little and little service and marketing. "Foxton's the 2% discount broker". Cheap and little service and in the end, they couldn't afford to stay in business.
If you can do the servicing, marketing and listing yourself, then I agree with Dan and Klarek, you don't need an agent. But, it's "you do it yourself, or you pay for the services". And it's always the consumer's decisions and responsibility for those decisions.
Anyone who wants to distort what I say, please contact me direct first, so I can clarify any wording or phrasing I may use. I sometimes tend to be a bit too concise with details that seem obvious.
- Joan Braunschweiger, "Morris County NJ"
- Contributions:1504
Dennis, I am not sure why you would resurrect an old thread just to reinforce negative agent stereotypes.
First of all, Joseph is (was?) a buyer in NJ, not a seller.
Secondly, the idea of sellers being pressured to pay out a higher commission to the buyers' agents so that agents deign to bring their buyers is nauseating. If this is true- that agents will bring more buyers to higher commissioned listings, then agents are simply giving more fodder to haters like klarek. From being on this site and others unfortunately many agents seem to find that acceptable. I find it reprehensible.
Also, the agent who told Joseph that a 6-7% commission was the "norm" was wrong on so many levels.
- klarek the realist
- Contributions:7051
Dennis:
Because of the resources available to agents, paying 6 - 7% should get you much better advertisement to more qualified buyers, and as such, more likely to get higher offers, as long as you and your agent get the pricing appropriate.
The free market doesn't operate like that. Unfortunately, because nAR is a cartel, this is extortion.
Shannon
This is usually, although not always, split 50/50 between the selling agent's broker and the buyer's agent's broker. Every brokerage takes a different cut of the commission, so the amount the agent gets can vary quite widely.
And why should the client give thousands of dollars to the broker? Just because the system is crooked doesn't mean that the clients ought to be fleeced.
Pam
Most agent have to split the commission with the broker. Typically an agent makes a % of the 3% per side (selling or buying). It is not uncommon for an Agent to end up getting less than 1.5% of the sale minus all expenses.
Is that supposed to make buyers or sellers feel better? It's not about what the agent gets, which is still a lot; it's about what the customer is paying for, and if the service is worth the money paid.
Kristi
Studies have been done to show that there is actually a net financial benefit to the seller to pay a higher commission.
Studies funded by who, nAR? Maybe I should conduct a study and submit it to my boss with the conclusion that he ought to triple my salary if he wants me to perform well, see how that goes over.
Because of the resources available to agents, paying 6 - 7% should get you much better advertisement to more qualified buyers, and as such, more likely to get higher offers, as long as you and your agent get the pricing appropriate.
The free market doesn't operate like that. Unfortunately, because nAR is a cartel, this is extortion.
Shannon
This is usually, although not always, split 50/50 between the selling agent's broker and the buyer's agent's broker. Every brokerage takes a different cut of the commission, so the amount the agent gets can vary quite widely.
And why should the client give thousands of dollars to the broker? Just because the system is crooked doesn't mean that the clients ought to be fleeced.
Pam
Most agent have to split the commission with the broker. Typically an agent makes a % of the 3% per side (selling or buying). It is not uncommon for an Agent to end up getting less than 1.5% of the sale minus all expenses.
Is that supposed to make buyers or sellers feel better? It's not about what the agent gets, which is still a lot; it's about what the customer is paying for, and if the service is worth the money paid.
Kristi
Studies have been done to show that there is actually a net financial benefit to the seller to pay a higher commission.
Studies funded by who, nAR? Maybe I should conduct a study and submit it to my boss with the conclusion that he ought to triple my salary if he wants me to perform well, see how that goes over.
- Dan, "the_country_hick"
- Contributions:4346
Dennis, define pay to little. From my perspective paying agent fees of $21,000 on a $300,000 house sale (7%) is ridiculously expensive.
Can I avoid this party and just FSBO instead?
Can I avoid this party and just FSBO instead?
- Dennis Knight, "The NJ Realtor"
- Contributions:53
I would have to agree with Kristi hitting the nail squarely on the head. It is all negotiable, but, pay too little and no one comes to the party. Economy pricing can only get you economy service. Because of the resources available to agents, paying 6 - 7% should get you much better advertisement to more qualified buyers, and as such, more likely to get higher offers, as long as you and your agent get the pricing appropriate.
- Shannon Aronson, "Shannon Aronson"
- Contributions:128
Hi
Real estate commissions are always variable. In our area 5-6% is common. This is usually, although not always, split 50/50 between the selling agent's broker and the buyer's agent's broker. Every brokerage takes a different cut of the commission, so the amount the agent gets can vary quite widely. And the seller always pays both parties.
Real estate commissions are always variable. In our area 5-6% is common. This is usually, although not always, split 50/50 between the selling agent's broker and the buyer's agent's broker. Every brokerage takes a different cut of the commission, so the amount the agent gets can vary quite widely. And the seller always pays both parties.
- Angel Fletcher, "Fletcher Real Estate"
- Contributions:109
It's always negotiable.
- Jeff Konstant, "jkonstant"
- Contributions:1970
Josephcione:
Fortunately you have time on your side. Unfortunately some of the comments/advice regarding commission, buyer's/listing agent, representation, agent/broker splits, etc is just a little less than fully honest.
Let's take this example from one responder. Agents who offer to refer others usually expect to be compensated. Why isn't this told up front? Now, if it is true that you get what you pay for, then we might conclude, since the agent is paying part of their earnings to the refering agent, you might be paying the same and receiving less.
I'm not suggesting having your own agent is a bad thing, but I find it a little disturbing that several responders have suggested that the higher the commission the more attractive to agents. If this is so, and I beleive it is, the conclusion must be that compensation could very well trump representation, duty, fiduciary or whatever term is thrown out to impress.
I suggest spending some time, right here on Zillow and elsewhere, reading up on the several topics and asking questions before you take the plunge. Be sure to have an attorney before signing anything to ensure you actually have some representation.
- Gary Brey, "garybrey"
- Contributions:73
Florida is the same. 6%. Sometimes 7 and sometimes 5. As I like to tell my clients who have a sense of humor, "we have not raised our fees in 50 years."
- James Berman, "TheNJRealtorGuy"
- Contributions:198
as to your 1st question unless you use an agent to buy a FSBO don't worry about it, the agent already knows what he will be paid if you buy the house its stated in the MLS.
The area that you are looking into relocating to is located in what is known as the High-Land area. It is managed by the High land Commission. It controls development of that area in order to maintain open space. Where there is well water, septic and many optional forms of heating systems, your concerns are nothing but normal for people not use that way of living. I highly suggest you find an agent that is both tech savoy and knowledgeable of Sparta and the differences between Sparta Lake Mohawk and Byram lake Mohawk cause these two towns share the lake. There are lot of what if and unknowns but a great buyers agent will help you. Best of luck
The area that you are looking into relocating to is located in what is known as the High-Land area. It is managed by the High land Commission. It controls development of that area in order to maintain open space. Where there is well water, septic and many optional forms of heating systems, your concerns are nothing but normal for people not use that way of living. I highly suggest you find an agent that is both tech savoy and knowledgeable of Sparta and the differences between Sparta Lake Mohawk and Byram lake Mohawk cause these two towns share the lake. There are lot of what if and unknowns but a great buyers agent will help you. Best of luck
- frisky1
- Contributions:448
Commuting on rt 80 will be a real treat for you especially if you are trying to get to downtown Manhattan. And the train absolutely stinks unless you live at about Morris Plains or east. I live in Hunterdon County surrounded by very wealthy people (not me, the neighbors) and we all have septic and wells and do just fine. The area you are looking in was built up (except for the lake houses around LMohawk) in the last 10 years so much of the finish quality is catering to the Home depot crowd. And yes, NJ has extremely strict building codes, its doubtful any state beats us by much. You can't really compare Long Island to Sussex--Sussex would be more like Putnam or Rockland Counties. I'm sure there are plenty of places in upper Westchester without public utilities. Anyway, if you're commuting downtown, you might consider living along rt 78 as we have a direct bus from Clinton and in 8 years if they build that tunnel, our train will have direct access to midtown Manhattan (maybe a little equity gain like when the Morris County train was connected to Manhattan in the 90s). Of course prices are much higher here but its beautiful.
Now for your real question: Typical commission in north Jersey is 6% (everything is negotiable of course), 7 may be charged if the agent can get away with it or its a particularly problem property. 5 can be charged if say the seller is a repeat customer or is buying a home with the same agent or the seller is a good negotiator. The payout from that commish to the agent that brings in the buyer is typically either 2.5% or 3% (split between the agent and their broker). And often a 6% commish is split 3.5% to the listing agent and 2.5% to the buyer agent--its not always even and one very big agency does this almost everytime. Its pretty established that it takes at least 2.5% to get agents to bring clients around, talk up houses, etc. Foxtons failed here because they only paid out 1% (well that's one of the reasons). While buyers were pouring over every house and doing the legwork themselves, the agents were forced to show foxtons listings. With buyers much less motivated, and lots of houses to choose from, agents need money to act.
if you are willing to do a lot of legwork and know every house for sale in the neighborhoods you want to live in (including any FSBOs), then just contact listing agents on your own and be agressive in your offers--knocking a couple percent off your offer price (and let the agent and seller fight over who loses money). Its my belief that having unfettered access to the MLS is key which means getting one agent to dump every listing into your email so you can filter them yourself is the best way to go. Plus seeing every sale, expired listing, withdrawn, listing is also key. and being able to sit in the office and do the searches yourself is ideal so you know you're getting everything. We're talking about 2.5-3% play in commission that you are trying to save off the purchase price. Its highly unlikely a listing agent will ever go below 5% to get the deal done even if they bring in the buyer. so keep your offers low, be patient, don't get offended by anyone, and let the seller and their agent fight the commission fight for you.
Now for your real question: Typical commission in north Jersey is 6% (everything is negotiable of course), 7 may be charged if the agent can get away with it or its a particularly problem property. 5 can be charged if say the seller is a repeat customer or is buying a home with the same agent or the seller is a good negotiator. The payout from that commish to the agent that brings in the buyer is typically either 2.5% or 3% (split between the agent and their broker). And often a 6% commish is split 3.5% to the listing agent and 2.5% to the buyer agent--its not always even and one very big agency does this almost everytime. Its pretty established that it takes at least 2.5% to get agents to bring clients around, talk up houses, etc. Foxtons failed here because they only paid out 1% (well that's one of the reasons). While buyers were pouring over every house and doing the legwork themselves, the agents were forced to show foxtons listings. With buyers much less motivated, and lots of houses to choose from, agents need money to act.
if you are willing to do a lot of legwork and know every house for sale in the neighborhoods you want to live in (including any FSBOs), then just contact listing agents on your own and be agressive in your offers--knocking a couple percent off your offer price (and let the agent and seller fight over who loses money). Its my belief that having unfettered access to the MLS is key which means getting one agent to dump every listing into your email so you can filter them yourself is the best way to go. Plus seeing every sale, expired listing, withdrawn, listing is also key. and being able to sit in the office and do the searches yourself is ideal so you know you're getting everything. We're talking about 2.5-3% play in commission that you are trying to save off the purchase price. Its highly unlikely a listing agent will ever go below 5% to get the deal done even if they bring in the buyer. so keep your offers low, be patient, don't get offended by anyone, and let the seller and their agent fight the commission fight for you.
- Linda Gedney, "Linda Gedney"
- Contributions:243
Same as Pa. 3% on each side...buyer side and seller side
- Michael Emery, "MikeEmery"
- Contributions:6886
Agent commissions are paid by the seller to both the listing and and buyers agent unless the seller is paying less commission than what the buyers agent normally receives for their services. This is spelled out in the buyers representation agreement.
Agent commissions are always negotiable.
Agent commissions are always negotiable.
- Pam Vreeland, "pamvreeland"
- Contributions:21
While 6% is a typical commission in this area, that is not exactly what the Realtor gets paid. In the state of NJ all agents must either be a broker or work under a brokerage. Most agent have to split the commission with the broker. Typically an agent makes a % of the 3% per side (selling or buying). It is not uncommon for an Agent to end up getting less than 1.5% of the sale minus all expenses.
- Ryan Halset, "Mr.SeattleRealEstate"
- Contributions:725
The seller typically pays a total of 6% in commissions.
3% goes to the listing agent.
3% goes to YOUR agent.
You can choose whomever you'd like to represent you. The listing agent (who is selling the home) obviously has more incentive to fetch a higher price - and is legally obligated to represent the seller (before you). But if you know what you're doing - you can negotiate some off the price. Because it sounds like you are a novice buyer in the area...I would suggest hiring a local agent to represent your interests and act as a buyer's agent for you.
3% goes to the listing agent.
3% goes to YOUR agent.
You can choose whomever you'd like to represent you. The listing agent (who is selling the home) obviously has more incentive to fetch a higher price - and is legally obligated to represent the seller (before you). But if you know what you're doing - you can negotiate some off the price. Because it sounds like you are a novice buyer in the area...I would suggest hiring a local agent to represent your interests and act as a buyer's agent for you.
- Fydell
- Contributions:509
Ok lets get a couple of things straight. First off New Jersey is not comprised of a bunch of hicks living in one room shacks with an outhouse.
Building codes here are just as strict as they are in New York and building standards are just fine.
Secondly I lived in a house in Huntington Long Island and that had a septic system
Thirdly the area you are looking in was all farmland 10 years ago When developers come in they build and the infrastructure comes later. Until then you have to put up with what you get.Did you know that a spetic system in a modern house costs $30,000 or $40,000 to build and is a far cry from the hole in the ground of years ago. Well water around here is hard. Thats because the subterranian rock makes it that way. From what I remember Long Island water is nothing to write home about.
I am not sure why you are looking in an area where the commute to NYC is probably 1 1/2 to 2 hours. There are many towns closer in that have city water, sewers and schools far superior to anything you would find in New York State.
Now commissions. I have absolutely no idea why you are even asking about commissions. The seller pays it ALL OF IT.
Commissions are always negotiable. I doubt very much that 4% or less is "normal" on Long Island nor do I believe a New Jersey broker told you she gets 7%. As for Foxtons I don't exactly see them around any more.
You ask if you need a buyers agent. Let me ask you a question. Would you be happy having someone handling negotiations for you who is being employed by and paid by the seller?
I am sorry you are getting such a bad impression of New Jersey. Its simply not like that.
Building codes here are just as strict as they are in New York and building standards are just fine.
Secondly I lived in a house in Huntington Long Island and that had a septic system
Thirdly the area you are looking in was all farmland 10 years ago When developers come in they build and the infrastructure comes later. Until then you have to put up with what you get.Did you know that a spetic system in a modern house costs $30,000 or $40,000 to build and is a far cry from the hole in the ground of years ago. Well water around here is hard. Thats because the subterranian rock makes it that way. From what I remember Long Island water is nothing to write home about.
I am not sure why you are looking in an area where the commute to NYC is probably 1 1/2 to 2 hours. There are many towns closer in that have city water, sewers and schools far superior to anything you would find in New York State.
Now commissions. I have absolutely no idea why you are even asking about commissions. The seller pays it ALL OF IT.
Commissions are always negotiable. I doubt very much that 4% or less is "normal" on Long Island nor do I believe a New Jersey broker told you she gets 7%. As for Foxtons I don't exactly see them around any more.
You ask if you need a buyers agent. Let me ask you a question. Would you be happy having someone handling negotiations for you who is being employed by and paid by the seller?
I am sorry you are getting such a bad impression of New Jersey. Its simply not like that.
- The Campbells of RE/MAX, "CampbellsOfRemax"
- Contributions:96
You are going to like that change of scenery when you find it.
In answer to your query, commissions are negotiable. You want to have your own buyer's agent to work for your best interests, and you want one with experience.
So, we suggest someone who is an ABR and a CRS. Go to rebac.net to find a buyer's agent in your search area, then see if they are also a CRS (certified residential specialist--the cream of the crop). Someone with both credentials is serious about the business. You should not need to "PAY" your buyer's agent anything. The listing agency shares part of its commission with the buying agency.
We know of some good ones there if you need help.
[contact info removed by moderator]
Good luck!
In answer to your query, commissions are negotiable. You want to have your own buyer's agent to work for your best interests, and you want one with experience.
So, we suggest someone who is an ABR and a CRS. Go to rebac.net to find a buyer's agent in your search area, then see if they are also a CRS (certified residential specialist--the cream of the crop). Someone with both credentials is serious about the business. You should not need to "PAY" your buyer's agent anything. The listing agency shares part of its commission with the buying agency.
We know of some good ones there if you need help.
[contact info removed by moderator]
Good luck!
- JOSEPHCIONE
- Contributions:2
Ok...I did not go enough into depth for my question
I had the info in my head & did not explain my situation well enough
I asked the question...What do NJ real estate agents get paid
The reason i asked that was the following...I live in Long Island,NY
& work in downtown manhattan in the financial district
I was born and raised in long island and have been working in manhattan running a family buisness since i was 20 years old & i will be 40 in july
To say the least..I need a change of scenary...I have been looking in northern new jersey in the town of Lake Mohawk/Sparta..Sussex County
I have seen 3 differnt realtors on seperate outings..In NY..Long Island
4% is thmaginee norm...Sometimes even lower...When things were smoking 2% was seen all over with foxtons.com and house for sale by owner
The seller always pays the % to the broker..Now this past weekend
The broker i saw..Told be she get 6% the norm sometimes 7%
IS THIS TRUE?? IS THIS THE NORM FOR NJ??
WHO PAYS THE % THE SELLER OR BUYER
Do i need to find a "buyer agent"
Should i deal direct with the listing agent of the home to get a better deal and not go with any "buyer" agent???
NJ system is different then Ny in so many ways IM CONFUSED!
Also..In NJ...The contruction of the homes are so much different then NY...I would imagine because building codes are differntNj homes seem less quailty in the construction...New and older homes
Also there a no sewers...only spetic...Propane gas!! NEVER HEARD OF IN MY LIFE...Hard water with water filtration systems...I mean is this 2010 or what??? I dont understand why 45 miles from NYC seems such a backwards and different world! I love to live in Sparta..Lake Mohawk
BUT there are So many trade offs....I dont know if its worth it
The homes are very very reasonable ...Also the taxs are lower then LI
& the driving distance for me is the same as i am doing now
I could buy a home in the area all cash with no mortgaage and be bill
free...I just dont know about all the stuff that goes along with it
I also have not found an agent in the area that is warm in personality and genuine...Real...Straight foward and sincere...Can you find me 1???!!!!!
PLEASE HELP!
THANKS SO MUCH!
Joseph Cione
www.josephcione.com
I had the info in my head & did not explain my situation well enough
I asked the question...What do NJ real estate agents get paid
The reason i asked that was the following...I live in Long Island,NY
& work in downtown manhattan in the financial district
I was born and raised in long island and have been working in manhattan running a family buisness since i was 20 years old & i will be 40 in july
To say the least..I need a change of scenary...I have been looking in northern new jersey in the town of Lake Mohawk/Sparta..Sussex County
I have seen 3 differnt realtors on seperate outings..In NY..Long Island
4% is thmaginee norm...Sometimes even lower...When things were smoking 2% was seen all over with foxtons.com and house for sale by owner
The seller always pays the % to the broker..Now this past weekend
The broker i saw..Told be she get 6% the norm sometimes 7%
IS THIS TRUE?? IS THIS THE NORM FOR NJ??
WHO PAYS THE % THE SELLER OR BUYER
Do i need to find a "buyer agent"
Should i deal direct with the listing agent of the home to get a better deal and not go with any "buyer" agent???
NJ system is different then Ny in so many ways IM CONFUSED!
Also..In NJ...The contruction of the homes are so much different then NY...I would imagine because building codes are differntNj homes seem less quailty in the construction...New and older homes
Also there a no sewers...only spetic...Propane gas!! NEVER HEARD OF IN MY LIFE...Hard water with water filtration systems...I mean is this 2010 or what??? I dont understand why 45 miles from NYC seems such a backwards and different world! I love to live in Sparta..Lake Mohawk
BUT there are So many trade offs....I dont know if its worth it
The homes are very very reasonable ...Also the taxs are lower then LI
& the driving distance for me is the same as i am doing now
I could buy a home in the area all cash with no mortgaage and be bill
free...I just dont know about all the stuff that goes along with it
I also have not found an agent in the area that is warm in personality and genuine...Real...Straight foward and sincere...Can you find me 1???!!!!!
PLEASE HELP!
THANKS SO MUCH!
Joseph Cione
www.josephcione.com
- Ofe Polack, "Ofe Polack"
- Contributions:967
I totally agree with Kristi, what you see is what you get. Remember that 1/2 of the commission is offer to the co-broke, the more you offer the more interest you will generate from other agents. Hire somebody who is effective, a good communicator and a superior marketer, and you will be happy with the results. Good luck!
- Kristi Coy, "KristiCoy"
- Contributions:103
Commissions are negotiable. Some agents charge no listing commission, hoping to get buyers as a result. But be very careful of selecting someone based on what commission they charge (or don't charge). You're pretty much guaranteed to get what you pay for. Studies have been done to show that there is actually a net financial benefit to the seller to pay a higher commission. It draws more buyer agents to the listing and, as a result, more interest, assuming it's priced appropriately to the market.
I know a great Realtor in your Lake Mohawk area. Contact me and I'll get you the information.
How much do real estate agents in nj get paid on commission?
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