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My Realtor is asking 4 % to take over sale of my condo.Is this reasonable in todays market ?

Reside in Connecticut
  • July 19 2012 - US
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Answers (9)

Best Answer

This is relatively reasonable. Not outside of industry standards by any means.
  • July 19 2012
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Oh and one last concern is if he is giving half (2%) to the selling agent, then it might discourage some agents from showing your property. What do you think the chances are that an agent will show your condo to his client if he gets a 2% share vs getting a 3% share? Although not legal and they would never admit to it, I know a lot of agents that skip over showing listings with lower commissions if their are plenty of other options where they will get a higher amount. Have that conversation to see if he is taking 1% and sharing 3% or if its a 2/2% split? If he only needs 2% for his side, it may be worth discussing actually doing a 5% listing so he takes his 2% but still offers a more appealing 3% to the selling agent.
  • July 20 2012
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4% is very cheap for most parts of the country. What others have not mentioned is what happens to that 4%. Well firstly it's split in half with the selling broker so really your agent is only getting 2% and even then s/he has to usually give a large portion of that to the firm and that's before deducting the costs of marketing the home, insurance, desk fees, referral fees, taxes, etc. Your agent would be lucky to actually put 1% in his or her pocket when all is said and done. So if your agent is willing to take such a low comission amount, this draws up some concerns for me.

The first concern is if your agent can't negotiate at least 5%-7% for his own commission, what makes you think s/he is going to negotiate the highest price for your home? If they have to negotiate such a discount just to get the listing you might be dealing with someone who is a poor negotiator which could cost you thousands in the big picture.

Second, as mentioned by others, what services are you getting for your money? Chances are this agent either feels they need to discount their service because they lack expierence or perhaps they are not going to be able to afford some of the more costly marketing tools you may otherwise get with a more expensive agent.

Third, if your agent is taking much less commission than other agents, you can assume that s/he will need to take on more listings in order to accomplish the same amount of income as an agent that charges more. This means your agent will be investing much more time and money assisting other clients and marketing him or her self and less time and money marketing YOUR home.

I'm not saying don't go with the 4% agent. BUT, I would suggest perhaps interviewing multiple agents and having them each submit marketing plans to you so you can see the value in what you are getting for your money. THEN make a decision based on what you really get and how much you really pay.
  • July 20 2012
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What does his marketing plan consist of?
  • July 20 2012
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4% is on the low side.  The commission is usually 5% or 6%.  The most important questions are what will you get for 4%, what is their marketing plan, how much will they offer the selling agent?  More than likely, 4% will not get you the exposure your property deserves.
  • July 19 2012
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There is not a simple answer for this. While we see 5 to 7% here in CA, I know agents who are not worth even 4% (names withheld for their protection).  What is the agent going to do for this amount and how much is going to the Buyer's agent?  It's beneficial to provide an incentive for the Buyer's agent to show your home.  Too low and showings will be reduced and you'll create less demand for your home.  

What is left after the Buyer's agent portion will go towards Marketing the home, the Broker portion, and what the Listing Agent nets.  If this part is too low, the marketing will be reduced, your home will be underexposed and you will probably net less money.  That's why you need to know, in writing, what they are going to do to market your home.  I've seen Sellers go with an agent because they can save 1% up front but lost 10% in a lower sale price...I'm assuming you don't want to go in that direction!

When you say they will "take over the sale of your condo" do you mean it's already listed with another agent or are you trying to sell it on your own?  

Good luck!
  • July 19 2012
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Yes, for entire selling, marketing listing fee, etc.
 thank you.
  • July 19 2012
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Can you clarify?   Is that for the entire selling, marketing listing fee, if that's the case it is low, very low and very reasonable. 
If you have a buyer and the Realtor is doing both sides of the transaction(representing buyer and seller) then its still reasonable but in some states not allowed.  Representing both sides of a transaction can be a bit rough. 
Good luck and hope this helps.
  • July 19 2012
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I don't know about your market. But where I am, some top brokers ask 7% for listings. 6% is customary.

Your Realtor is going to have to pay a buyer's agent or you're not likely to get many showings. Of that 4% broker fee that you're being offered, 3% goes to the buyer's agent. So your Realtor is offering to market your home for 1%.

You're being offered a huge discount.
  • July 19 2012
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