What’s the typical Realtor Rate (if you use one) that you pay? I’m just checking to see if 5-6% is too high. Here’s some additional info - She’s my friend, I trust her, and would want to have her to help me in the future.
6% is the average. Remember that buyer agent gets 3% and her broker gets another 1% so she gets 2%.
A good Realtor is worth every penny! A not so good Realtor isn’t though. I have a property under contract right now and I have arranged and been there for every inspection, I have arranged the closing, etc. All things the Realtor should handle. What exactly did my Realtor do in this transaction? Present my offer and get a signed copy to me, that’s it. To me that’s not worth the $1,500 he stands to make on this deal. Unfortunately as the buyer I have no say in the commission structure.
But to answer your question, again, good Realtor is worth every penny, I sometimes pay them a little more outside of closing. This ensures that when a good property hits the market I’m the first one to get a call.
6 % is standard for residential in my area. The agent that I use all the time gives a 5% rate for her frequent customers, but she writes it up so the selling agent gets 3% and she gets 2% as the listing agent.
Bare land is often 10%.
Century 21 in my area has a system where if your house is over 200k its 5%. Anything under that is the standard 6%. Seems like a fair deal. The owner told me most of the “fly be night” places charging 3 or 4 are gone now.
I loved the places that charged 3%-4%. They always under-priced something awful. I guess they made their money by having really fast turn-over and not having to do any work or pay for any advertising.
I’ve gotten some really good bargains that were listed with the cheapo offices.
Stupid sellers saved 2% on their commission and lost $20,000-$30,000 off the price of their house.
The rate that doesnt cause the house to sell is the highest rate…
Michael Quarles
man oh man, you don’t know how many times I had to talk sellers back into reality on that one! (I’m licensed).
I watched these discount brokers sell their clients houses dirt cheap with comps selling for thousands more…because they didn’t want to pay the broker an extra 1-2% LOL. Ridiculous!
Most of the discounters are gone here now…sellers are only listing with brokers who can sell and are paying 5-6% to do it. The help-u-lose brokers will return in the next sellers market though, bet your bottom 1% on it!!! LOL.
:beer
Everything I have to say has been covered. I’m glad you all mentioned that the flat fee folks aren’t around as much. When the market is hot, anyone can “sell” a house, it’s just a matter of if they could have sold it for more. In a down market, the cheaper folks are running scared.
A lot of part-time or opportunistic mortgage brokers and agents have left the business, which is great. It’s tougher now and I like it that way. Unfortunately, no one will remember or care about this thread once the markets come back. They’ll think a cheap “for sale” sign outside a property gets them maximum profit.
CASH IN KING…so the more money the buyer agent will make, the more likely your house will be shown and sold. Very rarely a listing agent sells the home but does not. There commission structure needs to cover there cost if they goto all the showing and advertise. To me that is important. Does the real estate office have a good website. Does it get many hits. Same as the realtor. Where do they advertise their listings besides on the brokage website. Do you get your house in a printed advertisement book and when and for how long.
Friends are the 2nd worse busienss partners with family being first.
like it has already been said, 6% is the average… but the question i pose to people is - the question is not how much it costs to have a certain professional as much as how much money do they make you… personally with investors some good agents charge more than 6% (i do in some cases) but i make these clients way more money than the Realtor with the pretty face and cute business card who doesn’t know crap about making money in real estate…
like anything else all realtors are not created equal and only work with realtors who are experts in a given niche or area… you don’t go to a Gen. Practictioner to operate on your foot, so don’t call your neighborhood “nice community” realtor to help you buy good investment property in the hood or otherwise…
my $.02…
What do you guys expect the realtor to do? He will price the house right (if he knows the market), and he will put the property on the MLS, and follow the paperwork once a contract is in place and thats it.
What would a good realtor do other than that?
Fadi…
here are the 10 things I expect a Good Realtor to do.
- Broker open houses weekly
- They should respond to all emergency calls on the property
- 4 page colored flyers expressing all of the amenities
- Make certain that the property is always in show condition
- reduce their commission when an offer isn’t full price
- Double verify that the buyer is qualified.
- take a lie detector test so I know they are telling the truth
- Lick my envelopes and mail all of my mail, after all they will get rewarded when I buy and sell something.
- Supply me with their personal cell phone number as well as their spouses cell and all sisters, brothers and parents’ in case I need to contact them.
- occasionally pick up my dry cleaning
I really don’t think I am asking for too much…
Michael Quarles
see? thats my point…
Open houses do not sell the house, open houses are lead generator for the realtors. Now, if it is done right and the neighbors were properly invited then maybe that will produce a sale, but not often.
Placing ad in the paper may also not produce a sale since buyers shopping in the paper either have bad credit, or shopping for great deals. Otherwise, they would have went the realtor route. I haven’t had a single call from someone with good credit calling on my newspaper ads so far. Then again, mine is not worded for them.
The flyers are good idea. who will get them? how? or just placed on the countertop? I can think of few things to put in the flyers.
Getting the house ready to sell… staging it right… good point…
The main thing the realtor will do is slap the property on the MLS and have the buyer agents sell it.
If you are selling at the retail level (which I do, because that is what maximizes my profit), by far the majority of buyers automatically go through an agent and are afraid to try to buy a house on their own, so they will not call FSBO ads.
So the big thing I expect the agent to do for me is to provided buyers.
Do not scoff at the business of getting the house priced exactly right or the value of the listing on the MLS. Those are bith extremely valuable.
Following the paperwork through escrow is sometimes a big job, too, Making sure everybody does what they are supposed to do on time and bullying people into performing. Far more of my transactions have been difficult rather than smooth.
When I am selling, I know what my property is worth because I keep on top of my research, but it’s still nice to get a second opinion. What I am actually paying for is the agent’s pool of buyers.
When I am buying, I am paying for the agent’s networking. I am also paying for the agent to act as a buffer between me and the seller. Since I am often buying from dysfunctional sellers, it saves a lot of trouble if the seller doesn’t get to access me directly.
I know that open houses don’t usually sell the house, but it’s not impossible. I’ve purchased a house before because I stopped for an open house sign in one of my target areas.
The agents hold the open houses to gather potential buyers. So even if they don’t sell the house that is on display, they can often sell a different house to the people who come in. Maybe that different house will be yours.
My agent runs full page ads, and her office will have 7-8 full pages. I can’t afford that kind of advertising power that 8 pages non-stop, week in, week out, represents. That kind of advertising pulls in the buyers. So again, what I am paying for is my agent’s buyers.