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What is the going rate for realtor commissions and or fees?

I have not bought a home since 1990 and i am a little out of touch. I am in the market to buy some real estate after some bad choices in life and after a very bad divorce.

I want to buy some small fixer uppers for rental income or maybe flipping. However i have talked to a few realtors and friends of mine and find that things have changed in the real estate market.

In times past the buyer paid no commisions or fees when buying a house it was paid buy the seller. Now i find that realtors want to charge a minimum for their services and if the commisions do not cover it the buyer is responsible for them. Since i was looking at buying lower end houses 25k-40k that would leave me holding the bag for commissions every time.

The going rate seems to be a minimum of $ 2500.00. Is this standard operating procedure in the real estate market or is everything negotiable like the price you pay for the house. Or are some just to busy to be bothered by the little houses because they won't make as much?

Are there any realtors out there that do not charge this minimum fee to buyers????? I need names if so thanks.

Any insight will be appreciated.
  • April 09 2012 - Central
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Answers (7)

jleach - In Texas, same as Cindy said - commissions are negotiable, most of the time you will find 6% to be the norm.  Working with investors can be a little different with the lower end buys but they are usually repeat customers so because of the quantity of deals a realtor may get, one might be willing to work something out with you.
  • April 09 2012
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As a consumer, I suspect what you are running into is that you are looking at houses in a very low price range.    If one does the math using a 6% commission (paid by seller) on a $25,000 house and the agent splitting the commission with the broker, they pay before taxes and business expenses would be $375 dollars.      Therefore, I suspect many agents consider this amount too small for much effort.  

If you've already identified a house and don't need any assistance beyond submitting an official purchase offer, then you may find one who'd work for the commission.    If you wish help accessing possibilities, going with you to look at possibilities, submitting offers, monitoring all the actions (such as inspections etc), etc  I suspect you'll not find an agent who will work for just the commission at the low end of the prices.

  • April 09 2012
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First, everyone on here is correct there are very strict ant-trust laws in place. So, it makes things challenging when discussing rates on these sites.

I do work with investors, and usually the house buy side is very cheap. However, they flip the house so I earn my commission on the sell side which balances everything out.

Considering most agents have to split their commission with the broker we are essentially working for free at this price point. So, I do think you can expect to pay something to a Realtor if you choose to work with them. 

However if you are buying an investment property I would think this is a fair deal to pay someone a little extra to help you. 

Otherwise look at working directly with sellers. There are plenty of Websites and places like Craigslist where these types of investment properties are advertised. Typically a investor has already fixed up the home and has a tenant in the property. All you have to do is buy the home and start getting cash flow.

Whether you understand how to fully analyze a rental property I don't know. Paying a Realtor who has rental properties themselves to ensure you are getting into a good deal might be worth it.

Good Luck~
  • April 09 2012
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Profile picture for Dunes ..
You should check out the Information on the Department Of Justice
Anti-Trust Division Web Site about all the options Consumers actually have
New business models are emerging that allow consumers to save thousands of dollars when they buy or sell a home



  • April 09 2012
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Hi! First I am so sorry for what you are going through. Divorce is hard enough then selling a house makes it more difficult. In California, our Commisions are negotiable. Currently they are mostly 6 % I have seen up to 8%, paid by the seller, This is usually split between the selling Broker and the Listing Broker. The Agent who represents the Parties in the transaction then gets a commision based on the Brokers split. So a 3%ccommision received by the buyers agent will likely be 70% of the 3%.
Out of this split, the agents pay for taxes, and any and all costs related to being a Realtor. Remember each agent is self employed, so we carry all of our own costs. This is a very expensive business to start, Each company is different, Most are franchises.  Some are independent. Some Like mine are Family owned.
Brokers are liable for the agents, and are in business to make money, Each transaction needs to pay for fees associated with the broker.
I hope you find this helpful.
What you are paying is for the agent to do all the work in finding the homes for you, and you are buying multiple properties, I would negotiate with one agent and go from there. Upfront fees are negotiable.
  • April 09 2012
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No, as an agent I will tell you that we all charge fees.  The smaller the deal the larger the fees.  If you are looking for small or no fees then you will need to negotiate with a seller. Agents use the commissions to stay in business pay for the normal business costs as well as supporting their families.
  • April 09 2012
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There is not a going rate for Realtor commission or fees according to Sherman Antitrust Act

  • April 09 2012
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