Buying Agent = 4%

Traditionally, the commission paid in a real estate transaction is split more or less evenly between the buyers’ side and the sellers’ side. Commissions are negotiable and they typically range between 5% and 7%. So, assuming a commission of 5%, one half of that goes to the buying side (to buyer’s agent and to the buyer’s broker) and the other 2.5% is split between the selling agent and the selling agent’s broker.

Last week, I saw a sign for a house for sale tacked to a telephone pole — actually, many signs all over my neighborhood — pointing to this FSBO in which the ***BUYING AGENT = 4%***. It is unusual to see as much as 4% commission on just one side of the transaction. This seller is clearly motivated, though you could make the argument that they would have more help selling their home if they added just 1% and split the commission.

I talked with the owner to see if they had any action on the house or if agents have stopped by with buyers. She said she had not received one phone call or visit from an agent in the two weeks the signs have been posted. Strange, I thought. Two weeks isn’t a whole lot of time, certainly, so I gave a call to a real estate agent in the area and asked what she thought. She said agents don’t really seek out stuff like this since there is so much inventory they’re now dealing with. But, if she had a buyer who was looking for this type of house (townhouse), it would be her responsibility to show it and she would show it. The Realtor also said the house was probably not being marketed in the best way possible, mentioning the MLS, holding open houses and having a network of other Realtors to show it to. I guess telephone poles aren’t quite cutting it in this down market, even in red-hot Seattle where the year-over-year Zindex change is 12%, according to our Q1 Quarterly Report. I noticed the house wasn’t posted for sale on Zillow, so I reported it — maybe that will help. 

As for the seller, she said they are going to start interviewing agents so they can offically list it for sale in the MLS. It should be interesting to see how this story plays out.