So where I am from atandard commission rate is 4%. I use this to get 5% and let the client chooose to pay me more.
Explan to them the benefits of having a higher commission.
1)Buyers agents will show there property first and be excited to sell it. They will work there clients that much harder to buy it. I call it the human nature objection. Second you will have more advertising dollars to do an extensive marketing campaign. They usually choose to pay more especially in a buyers market.
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In this real estate market, commissions have gone up. Clients do realize the importance of working with a top real estate broker. Not only one who provides outstanding marketing and one who is going to get the proprerty/MLS listing sold for them. But what's more: a real estate broker that is going to guide them to a successful closing.

In my humble opinion, this is a vastly understated role that a good realtor plays. It is one thing to get an offer and get it signed. It is another thing to navigate the waters of this market and get the file to the closing table.

In Minnesota, standard commission is 6-7%. With 2.5% to 3% going to the buy side broker per the MLS compensation that is listed. I hope this helps.

A seller has to think about the money they lose every month a home does not sell.

There are no standard commission rates for Realtors. Be careful what you post here

Thanks,

Mario

As prices fall, even a higher rate still produces less income.

But when our Sellers have little or no equity, we can't get blood out of a stone.

So you just have to have more transactions to make the same amount of money; or give yourself a pay cut.

But I work harder and more carefully on the few transactions I have; I don't fumble any balls on the way to the goal line; and I appreciate those that I get to the Closing even more.

I have a higher rate of deals that actually close now than in the heyday of the market when more were allowed to bomb out and you'd think "I'll just find another Buyer." Can't do that anymore!

Today's deals are too precious to treat with anything other than "Intensive Care" and the Commissions represent money well earned. Every morning I examine each of my Listings and my Pending Files like newborn infants in incubators, and ask "What can I do for you today that's going to help keep you alive?" and there's plenty that can be done, little things that nurture them along, the things that no one else will think of or do.

Bringing them in from across today's minefield can be very rewarding.

At my company we don't really need to focus on the commission rate other than what is standard. It really helps that I am with a 100% commission company so I know if I list a property at 5%, pay out 2.5% I can keep the other 2.5%. If I represent a buyer and the pay out is 3%, I make the whole 3%. It takes a LOT of work now a days to close a successful transaction. Sellers want to sell in this market and try to hopefully make something or at least break even. Buyers want to see every house on the market and gas costs are pretty high! How strong is the buyer and their financing? Will the home pass FHA? So many variables to put together! Bottom line - every dollar counts and I LOVE being in control of my funds with a 100% commission company!

Maybe instead of saying "standard", the word "typical" might fit better because what is "typical" in your area may not be the typical commission in my area.

Commission is always negotiable. Here, it varies from a set amount on a low-priced property to 10%, depending on who you are, what you're selling, and what you can negotiate with the seller. Also, here, some listing agents are keeping the lion's share of the total commission and only offering 1-1/2 to 2% to the buyer's agent.

My broker has a set commission that is the standard for our OFFICE. It is not "standard" for my area - even though it is typical for others to have the same rate as the lowest they will go.

I'm amazed at the rates you get in the US. In here, we typically get 3-5%.

The beauty of a free market. I personally am amazed that agents and brokerages can survive on 3% commissions. Unless you never split them with other agents/brokers.

On a sale that charges 6% commission, if another agent sells the house (or I sell another agent's listing) I end up walking away with approximately 1.7% of the sales price after splitting with the other agent, the broker, and the franchise BUT before taxes and expenses. Taxes will eat up at LEAST another 25% of that, and so will my basic business expenses.

Somewhere in here I have to actually make a profit that enables me to enjoy some sort of pleasant lifestyle. I'm not in this business to be a public servant and live hand-to-mouth.

Maybe it's time to break out on your own.

"In my humble opinion, this is a vastly understated role that a good realtor plays. It is one thing to get an offer and get it signed. It is another thing to navigate the waters of this market and get the file to the closing table."


buyers and sellers don't realize the near miracle brokers and agents have to perform in order to get properties sold. the transactions can take months. real estate sales is one of the few industries where an agent can spend a tremendous amount of time and marketing money, only to find that the deal falls through after months of work.

Not at this time. I'm content with my broker and what he provides for me in return for my commission split. I do however grit my teeth at the franchise but I have no choice in that matter - my brokerage is the only one I'd work for, and I'm not interested right now in getting my own broker's license and setting up my own shop and all the headaches and expenses that go with that. PA does not allow for virtual offices. Whatever i'd be "saving" by keep all my commission would be going back into office expenses anyway. LOL

hey perky those last 2 sentences are absolutely priceless..

probably some of the best advice a newbie can get...the gross vs net.

i know many agents and brokers..who made a ton of money..only to realize they are broke..

that explains why re agents tend to be behind in paying their taxes on time and are one of the most frequently audited occupations with the IRS.

Well you can live pretty fat and write almost everything down in your corp.

Keep buying investment properties and use depreciation to reduce taxes down to almost nothing.

On paper you don't pay much to yourself but live very well while paying almost no taxes.

I tell clients I charge what I charge and here is why.I might lose 1 out of 10 commercial listings.Really I don't mind to lose that business.If the sellers mindset is cut,cut,cut the commission and sees brokers/agents as not having value then you are doomed from the start.

I will let another broker take it and get pounded from the seller and I will take the listing later after they are more open to what I have to say.

ver well said,

i tell clients out right..
i charge more, because i do more and provide more value..
do you want some cost cutting agent cutting corners with your
equity?
whats more important to you
? the commission..or netting the most amount of money?

for cost cutting competition..
i tell sellers..
great..how does it feel knowing that agent doesnt have the backbone to fight for thier own pockets?
great, so you want an agent thats about getting less..rather than more?
wow ..really? and that agent let you negotiate thier own fee
without a fight? how well will they negotiate with buyers on your price?

Just wanted to chime in quickly. I can explain the very low commission rate going in my area (north of Greater Toronto) by the fact that house prices are IN THE SKY, and the market is VERY active and very much seller-market. Hence, sellers are not so motivated and play their own game. But I'm not complaining - even if I'm splitting my tiny 3.5% with the buyers agent, keeping only 1.5%, I will earn about 10,000 from AN AVERAGE sale (minus the split, of course), and those sales usually keep coming, as more and more buyers want a piece of my beautiful community! And those damn buyers' agents still make a hefty 2.5%! Just imaging that from 750,000$ (very average price) subdivision house! :rockon:

yes, quite different than if many of your sales are significantly under 200,000.

I'm telling you, it's crazy up here! Townhouses 1500 sqft fly for half a million bucks in 2 DOM.

Houses that were selling for 700,000 here may sell for the low 400,000s today. When prices were high, they didn't want to pay because I made "so much money". Now that prices are lower, they don't want to pay because they're "making less" so I should too. I find that no matter what the price range, there are people who will try to get the commission down.

I wrote an offer on a 65k dollar home last week. Not only that, but I am ALSO working a low ball offer on my 99k dollar listing. Don't you wish you were in Central Louisiana?

yes true..this year i have been forced to sell some 200k homes
in that case we need to try at least to get 3%
if not then at least 2.5%

Our average sale price in our MLS is about $167,000. :-/

That said, MY average sold price is $228,000 because I have a client with new construction homes that all go much higher and I also just sold a whopper of a listing (for here), almost 2 million...without that I'd probably be skirting right around that MLS average...

Couple years ago you couldn't find a decent place under 150,000 - 150 was the line in the sand and that was even marginal...if you wanted updated/modern it had to be closer to 200,000 and higher.

Now I'm seeing lots and lots of nice homes SITTING at 120,000, 130,000...and more and more homes are going just under that 100,000 mark (but they are still not modernized, many were "updated" in the 1980s....one listing I saw was bragging in the private remarks "Home was TOTALLY REMODELED in 1987!" And I was like...wow. In 1987 I was a hot young chick with a black Iroc-Z28 Camaro...but I aint' that no more!")

Oh wait, I had only the white PLAIN Camaro in 1987...I got the Iroc-z in 1989. LOL

Yeah, very sad. Is there any place that was spared?

I just got under contract on a $200k property. (This will be my first--EVER--transaction with a sub-$300k purchase price.) And to think I actually agonized over whether handling this sale would be worth my time.

I feel better now. Geez.

LOL

Hey FSBO, I'm in North Louisiana. I am in the luxury market here. My listings require whitewall tires before I'll list them!

I just took a floor call yesterday from a "buyer" who had a mid-500s credit score, no money in the bank and wanted to spend AT MOST $700/mo. on her mortgage (Yes, that is PITI).

There are a lot of people out there dreaming of home ownership looking to spend less than $100,000. Problem is, many don't want to put in the work to make $100,000 or less into a livable situation.

The good news is, at least she took my advice and called a lender to see where she stood before wasting any of my real time.