How much do I pay a Real Estate Agent??
Do they get a percentage of what your home sells for? Or do they get a set dollar amount? I can sell my house buy owner, but I was thinking they might be able to sell it faster & for more $$, but it depends what they charge. I live in Philadelphia by the way. Thanks. 10 pts.
Thank you all for the answers. If I cant get less than 5% I would sell it myself. I bought my home w/ no real estate agent & no lawyer. I did everything on my own w/ the help of the mortgage company. Meaning getting all the correct paperwork & inspection certificates, etc. I even had to hire someone to put a window in 1 room, b/c it violated code. It was hard, but I managed, so I think I can sell it on my own also.
I also live in the city so people drive by alot & I can use craigslist & newpapers, etc. Is this a good or bad idea?
- 1 decade agoFavorite Answer
Too much, if you ask me. They start at 6% and work their way down. You should be able to get the transaction done for 3% though. Since by owner is cheaper, I'd say try your luck with that first. If it doesn't sell you can always sign on with an RE agent
- Anonymous1 decade ago
There are a few options:
You can use a flat rate discount broker. This is almost like selling yourself except that you will be listed in the MLS. The upside, is that it can be cheap; maybe $500. The downside is that you pay upfront, and are not guaranteed any results for your money. These discount brokers often do little to advise you in what to do to sell your home (including how to price it) because they have no interest in seeing your home sell because they’ve already been paid.
You can also use a full service broker. A standard commission rate is 6-7%, but that amount will be split between 2-4 parties. On a 7% commission, the listing agent might get 3.5% (the full 7 if there’s no buyer’s agent); of that a certain percentage (anywhere from 10-50%) goes to their broker to cover overhead& marketing costs. If there’s a buyer’s agent, their 3.5% is split the same way. The point being that unless you manage to hire a broker that works alone and your buyer has no agent, that commission is not going to just one person.
- Anonymous1 decade ago
What you are not factoring in to your thought process when you think "I can do this myself" or "I can save on commission" is the current condition of the market.
When the market is slow and you're trying to sell, you need to get the widest exposure in the shortest amount of time, and you need to create a sense of urgency for both the buyers and buyer's agents. Selling as a unrepresented seller or listing with an agent but paying 5% or less accomplishes neither.
Here's a plan:
- LIST WITH AGENT: Have agent put property on MLS but also (VERY IMPORTANT) have agent cold call, email blast and send post card mailer to every agent in your area.
- PAY ABOVE AVERAGE COMMISSION: Just remember, when you reduce the commission, you are not only affecting the listing agent's pay, but the buyer's agent's as well. If you want to get a buyer's agent's attention, offer a higher commission - you should have agent's lining up to show your home. Remember to advertise this as well!
Keep in mind - if 6% is what's been historically negotiated as the commission, a 5% commission is a 16.66% pay cut.
- GIVE A SELLER ASSIST: Offer as an example $5000 (or $2000 or whatever you can) credit towards closing costs....and advertise this.
- CREATE A SENSE OF URGENCY IN ADS: Put an expiration date on the seller assist and higher co-operating agent's commission.
- DO YOUR PART: clean your home, de-clutter, de-personalize, landscape, etc.
Lastly, and VERY IMPORTANT - price your home correctly. An overpriced home will sit - even if you follow the above steps.
- 1 decade ago
6% of the sales price is normal. In times like now you may want to offer 8%. The reason for this is that there are few buyers out there and many sales agents. The agents are going to try to sell the house that they will make the most money on. There are many reasons to use an agent today. Do not try to sell it yourself. Liability issues are perhaps the best reason to let a professional do it. List the property with a national real estaty company such as Coldwell Banker, Century 21 or such.
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- Christopher BLv 61 decade ago
Real Estate agents get whatever you negotiate and agree to. The business norm is 6% of the sales price of your property. However, it is not unknown to offer a set price for the sale, or offer a lower percentage. Especially when there is a over abundance of Realtors, and a scarcity of homes that are actually selling right now. The number of Realtors almost doubled between 2000 and 2005. And of course all one has to do is read a newspaper to hear about the recession in housing.Source(s): Professional Real Estate Investor
- 1 decade ago
real estate agents get 6% commission and they sell your home by placing it in a network that agents buying homes look for homes that are available. since the market is low you can negotiate your commission and they may accept 4% but that is up to them. I believe they do sell your home faster and it requires less work on your side as well as they have the experience in the contract and the suport of lawyers if you need them during the process. Better safe than sorry is my moto and once you understand all the things that can happen due to your inexperience you will see a value to their commission structure. Do not sign a 12 month agreement 6 month is max because if they dont sell it in that time you should change agent also get a comitment of showings broker opens and open houses they will do on your property to sell it in writing . good luck
- 1 decade ago
Realtors will make it difficult for you to be able to sell your house by owner because they ultimately want you to list. This could involve removing signs you set out to advertise your property.
As for what to pay, they usually want a percentage of the selling price (6-7%). Being a buyer's market now, realtors will encourage you to pay a higher commission as this will entice other realtors to show your property to prospective buyers before showing other properties that may be offering a lower commission. I wouldn't commit to a set dollar amount (unless you can negotiate an amount that equates to 4-5% or so of your expected selling price) because the market is so volatile right now. If the price of the house drops and you agree to a set price of say $6,000 and the expected selling price of your home drops from say $100,000 to $90,000 you've now effectively increased your commission rate from 6% to 6.7%.
My advice is to try to estimate what your (the seller) net proceeds will be after selling the home. It is true that most realtors sell the home for more than a seller could do it by owner. However, they also cost more reducing your net proceeds.
In my opinion, realtors are a couple notches above used car salesmen - although that is a generalization and not universal (for both). They have a monopoly on buyers, so to speak, with their controlled use of the multiple listing service. For example, take a buyer who has agreed to purchase a home only through their realtor. This buyer is driving through your neighborhood one day and sees your home for sale. It is unlikely the realtor will ever show your house to the buyer simply because you are selling it by owner.Source(s): Personal experience.
- Pamela BLv 51 decade ago
Real estate agents charge a percentage of what the house sells for usually around 3 %.
- 1 decade ago
The agent get a percentage of the selling price, from 3% to 6% it depends on what you agree..
- LandlordLv 71 decade ago
The standard is 6%, divided between the buying and selling agents. They pay for all costs involved with selling the property, such as newspaper ads.
You are correct, they will sell it faster and for more $, as well as keep you out of court. Most FSBO deals usually end in law suits because neither party knew what they were doing.