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What is the customary realtor's fee for a $4 million house? How negotiable is it? Thanks!

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November 10 2013 - Woodside
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HUD published in their 2008 study that commissions are "well characterized as $970 plus 4.5%".  (With substantial variation around this "average").

So, if we extrapolate from that, one would expect a combined commission of about $181k, or about 4.52%, +/- 3%.

However, the HUD study was for FHA financed homes, so excludes all houses in the very high range, and excludes any financing over $417k, so the HUD study does not provide much negotiating power for commissions in that price range.

In general, that is a "niche market" and not one easily entered by an average Realtor.  So again, it really comes down to what services you expect, and can the Realtor deliver them?  I've heard some agents claim as low as 2%... but that probably assumes the homes sell themselves, that the agent is the broker, and that the agent is handling both sides of the sale (exclusive).
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November 12 2013
Marketing a 4 million dollar home requires lots of expense on the part of the agent to attract qualified buyers.  The agent is paying those costs out of pocket.

Interview agents and see what bundle of services they offer to get the job done.  Base your assessment of commission on the value, aggressiveness, experience and knowledge of the agent.

A key player in that end of the luxury market brings value to the table.  They know it.

Remember if you discount the listing agent you are also expecting the buyers agent to work for the same discounted rate if there is an even split.  Perhaps buyers agents would not be as anxious to promote your home as they would another home where they are paid a higher split.
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November 12 2013
It really isn't all that negotiable, when you come down to it. If you want an agent that is proficient at selling $4M homes, they don't need to take your listing and get paid as if it were a $1.5M home. They probably sell a bunch of $6M homes for sellers that really want these agents to work for then, so for you to come at them with, "I want a discount," may not be received especially warmly.
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November 11 2013
To those who clearly have never heard of the Federal anti trust laws, the only proper and legal response from an agent to a question of this type is........ALL Commissions are Negotiable...because they are!

There are no industry "standard, customary, usual, typical or expected" commissions.

To imply or, worse yet,  overtly state, there ARE standard commissions can be seen as an attempt at PRICE FIXING even if that was not the intention.
That is something the Dept. of Justice doesn't take kindly to.

To those of you still scratching your heads wondering what the heck I am talking about, I strongly suggest you speak with your Broker...or...President of your local Board Of Realtors,  or better yet, call your state's Real Estate Commission and ask them what they think of Realtors discussing specific commissions on a public forum!

So Barb, to answer your question - I suggest you call in and interview 2 or 3 agents - ask for a written marketing plan so you can compare and contrast what they are offering.
At your meeting they can also go over specifically what their fee structure is.

You will see what they are charging, and what options you may have.
I suggest you look at the big picture, and not select an agent based only on what their fee is

Best wishes..........
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November 10 2013
I would be very leery of any agent that says all commissions are negotiable! Will that 1% or more be what you lose on the sales price  of your home simply because that agent cannot even stand up for their own self worth? Look at the marketing plan and ask the agent if you can "hold them to it" in writing. It is almost always worth paying a full commission to an aggressive full service agent!

Good luck and Happy Selling!
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November 10 2013
All of these are good answers. You get what you pay for usually. Sometimes, people get less than they pay for. Generally, 6% is what most Realtors will want; 3% each side. Some will do less and work hard for it, others won't negotiate at all. Ask questions of your Realtors and try to get a good feel for them. Hire someone you are comfortable with and verify the information they are giving you.
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November 10 2013
Commissions are never negotiated. If I give a lower commission that easily then how tough would I be negotiating the sale of your home. 5% on a 4 million dollar house period. Next Question?
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November 10 2013
Commissions are negotiable regardless of the price.
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November 10 2013
Its always negotiable but I would want the Realtor to be worth their fee.  What are they going to do to market your property?  What is their staging advice?  What professionals will be assisting, photographers, stagers, etc.  Where will they be advertising, locally, internationally? 
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November 10 2013
It is 6% 3 to the selling agent and 3% to the listings agents. There are ways to change the percentage to make a deal work but, both sides have to agree. 
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November 10 2013
Fees are always negotiable but customarily 6% with 3% going to the selling agent and 3% going to the buyers agent.  I have taken 2% on some listings and offered as high as 4% to a buyers agent.
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November 10 2013
 
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