What's fair for realtor fee's?

flapbreaker · 10-06-2006, 05:09 PM

Considering maybe selling my home and was wondering what percentage is fair for the realtor? I'm being quoted 5.5% but 20k sounds like a lot. I know haskins realty advertises 1% but I'm sure there's something missing. Problem is I feel obligated to use this realtor if we do decide to sell since he's helping us look for a new place too. He's a nice guy but.... Any input would be appreciated.

Gus Orviston · 10-06-2006, 06:33 PM

I do not believe 5.5% or the standard 6% is worth it... 20K$ is an awful lot of dough - I have bought and sold a couple homes and you don't get much of what you pay for. 1/2 of that is on the high end of reasonable.

And who thought up putting their pictures on their biz cards.... no other industry I know of does that.. Pretty corny way to do business.

gus

Gundog · 10-06-2006, 06:44 PM

I have listed homes before and bargained with the sales fee. Depending upon the selling price 4 or 5% is plenty.
GD

flapbreaker · 10-06-2006, 08:50 PM

So is it standard practice to get a couple quotes for selling your home or is that considered rude once you've had a realtor do a market analysis?

foxer · 10-06-2006, 09:23 PM

Since he is double dipping (he gets half commission on your house + half on the one you buy) you should be able to negotiate a better rate. Especially if homes in your neighbor hood sell fast..

taggbro · 10-07-2006, 09:58 AM

Keep in mind you get what you pay for.

Lower commission and the agent(s) will not be as interested in marketing your house.

I am in the property development business and flip properties constantly and use one broker and her commission is 5% but she gets all my business. Expect to pay up to 6% for a good realtor. You will be hard pressed to find anyone lower than 5% but that's just my experience.

Good luck!

flapbreaker · 10-07-2006, 11:40 AM

Thanks for your input.

troutski · 10-07-2006, 03:57 PM

"What's fair for realtor fee's"

I don't fair has anything to do with it.......

Snakebite · 10-07-2006, 04:06 PM

Quote:

"What's fair for realtor fee's"

I don't fair has anything to do with it.......

Think?

Bartman · 10-07-2006, 04:18 PM

we're getting ready to put our house in the market, my father in law suggested selling it ourselves, I'm inclined to think that a realtor could save us some headaches, sorry if this is hijacking, but could use some input on pros and cons, and appreciate the info on what is a fair % for a realtor.
Bart

threecreeks · 10-07-2006, 04:31 PM

We finally sold our house in Bend in August. We initially went FSBO when we put it on the market at the end of April. It sold in about a week and we tried doing the perspective buyers a favor by setting out the closing date until June 30th. Long story short, they backed out 1 week before close.

We re-listed with an agent this time in early July and we're very lucky to sell due to the market conditions. The prices here are very over-inflated and the market was saturated in early summer with speculator listings (the folks who buy and flip for profit). Add a couple of interest rate hikes and the market collasped. Twice as many homes on the market as same time last year with only half as many sales.

The deal we signed with our realtor was if he brought the buyer in (no other realtor involved) his commission was 3%. If another realtor brought the buyer in they split 5%. We paid about $14,000 in fees all in all. If someone is interested in a home you sell yourself, most realtors will want a 3% commission if their buyer purchases your home.

While I think what realtors do isn't rocket science, in tough market conditions having your home listed on the MLS (Multiple Listing Service) is the key to selling and worth the commission. It's all about advertising whether you FSBO or Realtor your home.

I hope this helps you.

T.C.

flapbreaker · 10-07-2006, 06:05 PM

Thanks for all the feedback. I guess there are services that charge a few hundred dollars to get you in the MLS system. If a person was going to sell it themselves (until a buyer realtor gets involved) that you would want to do this.

OutTrolling (ot) · 10-08-2006, 06:25 PM

My daughter and son-in-law sold two houses on Craig's list without a hitch. You would have to do your own advertising. They posted some pics and sold in less than 30 days. Its primarily in how the earnest agreement is written and you can get an hour of attorney's help with that for much less than 20k. I certainly wouldn't pay 20k just to be shown where to sign. I know I'll get a lot of flak that its much more than that but ??? it doesn't take a rocket scientist. Good Luck

Bartman · 10-08-2006, 08:08 PM

OT, thanks for the insight. we are still waying the options, and definately wouldnt mind the extra $$$ in our pockets.
Bart

The Croatian · 10-09-2006, 08:24 AM

If you get an agent to give ya a 5% deal, Be prepared, The other agents no that they will get 1/2 of 5 for bringing in a buyer instead of 1/2 of 6. They will always show the 6's to there potential buyer.

ET · 10-09-2006, 10:16 AM

The house I sold 2 years ago was at 6%. Was the agent worth it? The house sold in two days. Basically the first couple that came through gave a full price offer.

Here's the kicker though. I was prepared to sell by myself for 205k. I had a friend that buys properties for rentals and he was willing to cut me a check for that amount. He said he couldn't pencil out anymore than that for the house (1624 sq feet). After looking at area comps, I believed that this price was fair, especially with no selling fees. I contacted an agent and she said we should ask $234,900 which at the time I really thought was over market value for the piece of crap house.

When the house sold, it set a new benchmark for the area and I pocketed an extra $15k.

Now, you can say I overpaid the agent, but I think I made out... Even though it was an easy sale, she made me money!

So, what is fair? Personally I wouldn't mind paying 20% if the bottomline of the deal is that I make more money!

ORrinker · 10-09-2006, 10:30 AM

My wife is an agent and as I understand it the minimum that a buyers agent will receive is 2.5% if it is listed with the Portland area RMLS so if the listing agent quotes you a bargain deal at 4.5% then the listing agent is gatting less than half the commission with only 2%. If this person is also selling you a home then giving a discount on the listing side is usually done.
Remember that the listing agent has costs associated with selling your home and you will get what you pay for. If the listing agent is getting less than 2% then don't expect a lot to be spent on marketing your home i.e. newspaper ads and open houses. Very rarely does your listing agent sell your home without having to split the commission with someone else.

flapbreaker · 10-09-2006, 11:56 AM

Quote:

If you get an agent to give ya a 5% deal, Be prepared, The other agents no that they will get 1/2 of 5 for bringing in a buyer instead of 1/2 of 6. They will always show the 6's to there potential buyer.

You might be right but I have my doubts. I think now days most buyers do a pretty extensive search of available homes and have a good idea of what's available. In the old days prior to the internet you pretty much drove around all day with a realtor and they certainly could play that game.

backlash442 · 10-09-2006, 03:00 PM

What's fair is subjective isn't it? If a realtor sells your house in a prompt manner in a down market then it's probably worth paying up for it. Selling in a hot market is a no brainer and can probably be negotiated.

Since your agent is helping you with the new home you might be able to negotiate a better rate. If he represents the seller another negotiating point.

FSBO isn't hard. You really don't need an attorney either. Escrow company takes care of everything. Least they did with me. Unfortunately the buyer backed out.

A common mistake buyers make when dealing with a FSBO is they think the price should be cheaper since you aren't paying commissions. Wrong. The value of the house is not determined by commissions.

The Croatian · 10-09-2006, 03:17 PM

I don't mind the 6 because usually they work harder for the commision but if they guarantee an open house every sunday, beware, the open house is for them. That is the best way for agents to get new clients for the "next deal" open houses rarely help the seller sell. Meanwhile people are prowling through your house and your paying more for your beer while away from home on Sunday!

Gundog · 10-09-2006, 03:44 PM

I think 6% is ridiculous. I bought my house 3 years ago for $220 and now they say it is worth $400 6% of $220 is too much let alone 6% of $400 that is almost double in 3 years that is my investment not some real estate agents. My wages have not increased at that rate in 3 years why should theirs for the same amount of work? I think this whole percentage thing is wrong I think the service should have a value in dollars not a percentage. That is my take on the whole thing. I have sold several houses FSBO and agents just get too much for a simple transaction done mostly by the title company. The only thing I can see that they do for you is bring by customers so if you have a hard to sell property it is probably your best bet. If you have a desirable property save the coin. I think more and more people are selling by owner these days Realtors better wake up and smell the roses $20,000 to sell a house is unreal and people are seeing that. If I sell my house I would much rather use an agent but I am not going to pay brain surgeon wages to do it.
GD

SeanD · 10-09-2006, 09:05 PM

Totally blows my mind what people pay in fees.

troutski · 10-10-2006, 05:47 AM

Quote:

"What's fair for realtor fee's"

I don't fair has anything to do with it.......

Think?

About What ? Someone who inflates the market so their take of your equity is more, I don't buy into the "they work hard and earn their money". How tough is it to call a escrow company or tell a Realtor friend of a potential new rental property. You hear about soring Real Estate price's, it doesn't take more work to sell a house at 300K than it does at 75K, does it ? That is my two cents.

Duckwheat · 10-10-2006, 06:13 AM

"Is it rude to get a second opinion after one realtor has done a market analysis?"

You have got to be kidding! A market analysis is one man's opinion. Your opinion may be as well informed or better than theirs.

I noticed the national Realtor advertising on TV or radio tries to make selling real estate sound scary. You could not possibly be smart enough to sell your own home. There are pitfalls every where.

Most of the realtors I have met did not give up a career in neurosurery in lieu of selling real estate.

I have sold about 9 homes my self. I have offerred brokers coop on a couple of them. Pay a realtor 3% if he actually sells your home. They all get nervous about it, but just be honest with them. If you sell it I will pay you at closing. Works well.

The market has softened here in Boise. Houses that are priced fairly sell. That is probably the biggest challenge. Get several realtors to look at your house and give you an opinion.

Who knows you might meet one you like and decide he would be a lot better off with $20,000 of your hard earned $ than you or your kids.

Duckwheat

crabbait · 10-10-2006, 06:22 AM

Quote:

"What's fair for realtor fee's"

I don't fair has anything to do with it.......

Think?

About What ?

About the fact that you left a word out in your original response. He was guessing the word was "think". I suspect it may have been "doubt" instead of "don't". Proofread!

troutski · 10-10-2006, 07:33 AM

My bad.......

:blush:

I suppose I should stay where I belong - in the Trout Forum.

Chrome Bumper · 10-10-2006, 12:05 PM

Had a lawyer help us buy the neighbor place, Cost maybe a grand total for all the escrow, title search and attorney time. If you are selling maybe another grand for appraisial, listing and advertising.

Troutski, I didn't even notice you didn't type every word in your thought, gotta agree with you that Realtors are often overpaided for what they do. I don't think "Think?

" is a complete sentence either Crabbait.

Crayfin · 10-10-2006, 02:35 PM

Interesting read. I am a realtor and I actually got to talk to Flapbreaker on Saturday. Everyone in the work force thinks they are overworked and underpaid-or pay to much in fees. My brother is a plumber and is on call 1 week a month and hates it. Realtors (me anyway) are on call 24/7 and put our livelyhoods on a contingency basis everyday. That is a salemsman's life and some of what you pay for. If everyone I took around in my car stayed married/employed/honest ect....I could darn sure charge alot less money then I do. Hell...I give my clients (in writing) the option of terminating the listing without cost if they feel that I am not doing them a service. Had it used 1 time in 12 years.

I had a great conversation with FB so I hope that he took something away from our conversation. I did.....there are still people out there with a conscience, as he was asking really good questions and trying to get a handle on the fee thing while being concerned with burning up my time with my family. Good luck FP..give me a call if you get "stuck"

Todd Crawford

SeanD · 10-10-2006, 03:47 PM

Just curious, what does an average realtor with 5-10 years experience make ($$/year), on average over the last 3-5 years? Ballpark?

PapaHog · 10-10-2006, 04:10 PM

ME guess. Average... Not much... Good realtor a quarter million and a commercial Realtor that is good at his job a million PLUS.

Average ...combining the good the bad and the ugly... 80 thousand.

How far off do you think I am? Only wild guesses. My perception.

flapbreaker · 10-10-2006, 06:15 PM

Quote:

Interesting read. I am a realtor and I actually got to talk to Flapbreaker on Saturday. Everyone in the work force thinks they are overworked and underpaid-or pay to much in fees. My brother is a plumber and is on call 1 week a month and hates it. Realtors (me anyway) are on call 24/7 and put our livelyhoods on a contingency basis everyday. That is a salemsman's life and some of what you pay for. If everyone I took around in my car stayed married/employed/honest ect....I could darn sure charge alot less money then I do. Hell...I give my clients (in writing) the option of terminating the listing without cost if they feel that I am not doing them a service. Had it used 1 time in 12 years.

I had a great conversation with FB so I hope that he took something away from our conversation. I did.....there are still people out there with a conscience, as he was asking really good questions and trying to get a handle on the fee thing while being concerned with burning up my time with my family. Good luck FP..give me a call if you get "stuck"

Todd Crawford

Todd,

I definately appreciate all the advice you gave me (free I might add). I plan on calling you as soon as we make up our mind on wether we really want to sell or not. I created this post before talking with you (actually this is how I was refered). Obviously there's a lot of opinions out there which I expected. I hope this thread hasn't given too many black eye's to any of our ifish realtors out there as that wasn't the intent. I should of made the title "What's a customary fee" instead of what's "fair" as that's a subjective matter. Anyway, I appreciate all the info here and will sort through it as we make some decisions.

Spencer

Cloud-Nine · 10-10-2006, 06:27 PM

Consider this.
Why would a buyer go to a FSBO? Think about it. They get the services of a Realtor for free. All the transportation, it is easier to make an offer through a third party, can get to know the real values of homes in the area (sold price not list price). All this and more for FREE.
The only reason is to save money. Now both buyer and seller cannot save the same dollars, so the best that can be done is both to save 3%. To save this 3% the buyer gives up a lot of comfort and safety and help and has to pay separate for legal help if somthing goes wrong.
What you are paying for is the system, not just the services of one Realtor.
Buyers, by in large, come to Realtors when they look for a new home. My

And NO I am NOT a Reator

Crayfin · 10-11-2006, 08:52 AM

Quote:

Consider this.
Why would a buyer go to a FSBO? Think about it. They get the services of a Realtor for free. All the transportation, it is easier to make an offer through a third party, can get to know the real values of homes in the area (sold price not list price). All this and more for FREE.
The only reason is to save money. Now both buyer and seller cannot save the same dollars, so the best that can be done is both to save 3%. To save this 3% the buyer gives up a lot of comfort and safety and help and has to pay separate for legal help if somthing goes wrong.
What you are paying for is the system, not just the services of one Realtor.
Buyers, by in large, come to Realtors when they look for a new home. My

And NO I am NOT a Reator

Could not have said it better myself

Crayfin · 10-11-2006, 08:56 AM

Quote:

Just curious, what does an average realtor with 5-10 years experience make ($$/year), on average over the last 3-5 years? Ballpark?

Totally depends on the realtor--not a cop out here just a fact. Alot of money comes out of the gross that a realtor makes. My company takes 20K+ off the top for desk fee, another 4% for transaction fees/rmls dues/PMAR dues/Health Ins/$400 in gas a month and on and on

Crayfin · 10-11-2006, 08:57 AM

Quote:

ME guess. Average... Not much... Good realtor a quarter million and a commercial Realtor that is good at his job a million PLUS.

Average ...combining the good the bad and the ugly... 80 thousand.

How far off do you think I am? Only wild guesses. My perception.

I want to be a commercial realtor

B-RUN STEELIE · 10-11-2006, 09:25 AM

I had a boss once that was fond of saying " what the hell do you think you are ?? A realtor ??"

Sort of like a Lawyer without an education. Enough to make you gag. 6 % for driving over to your house a couple times and making a few phone calls. You gotta be kidding. If I sold my house today and " Heather_Bigbe_Finklestone_Smith " Thinks I am going to pay her 35,000 dollars to do it she is out of her freaking mind.

Kid who worked for me awhile back was all stressed out needing to leave work early because " I have to meet my realtor at 6:00 P.M sharp "... I told him " what are you talking about.. she will meet you whenever and where you say or she's fired.. like she has anything else to do all day "

Crayfin · 10-11-2006, 09:37 AM

Quote:

I had a boss once that was fond of saying " what the hell do you think you are ?? A realtor ??"

Sort of like a Lawyer without an education. Enough to make you gag. 6 % for driving over to your house a couple times and making a few phone calls. You gotta be kidding. If I sold my house today and " Heather_Bigbe_Finklestone_Smith " Thinks I am going to pay her 35,000 dollars to do it she is out of her freaking mind.

Kid who worked for me awhile back was all stressed out needing to leave work early because " I have to meet my realtor at 6:00 P.M sharp "... I told him " what are you talking about.. she will meet you whenever and where you say or she's fired.. like she has anything else to do all day "

I especially like the slavery part.

B-RUN STEELIE · 10-11-2006, 09:48 AM

Whatever.. tell me your busy all day and if you are.. and don't make ton of money.. then "your" not very good at it.

Guys wife across the street is a realtor and she spends most all all day at home then every so often hops in the leased Tahoe and shows a house. He tells me that she will have "maybe" 10 hours total into a house sale when all the B.S is said and done.

She is dumb as a post but easy to look at.. who are you kidding ?? FYI, SHE DOES REALLY.. REALLY WELL

Crayfin · 10-11-2006, 10:02 AM

Dude...not trying to pick a fight with you. That's the great thing about America--you get to use who you want/when you want for things like this. Am I busy every day? Nope--are there times when I work everyday for a month? Yup.

Just like anything else--some come hard and some come easy. There are people out there that have had terrible experiences with professionals of all trades and some who have been thankful for the help. I really do try and earn what I am paid--be it in service/getting repairs made @ reasonable rates/advice/getting a higher sales price/sooner sale whatever...........If you dont need/want a realtor-dont use one, it's just that simple.

Peace

riverhound · 10-11-2006, 10:04 AM

I sold my house and had a realtor. I sold it myself, but still had to pay him 6%. I held an open house one day, and had more people look than he did in 4 open houses. Had one couple come back and offer full price, and because I was contracted to him, we still had to pay 6%. When I sale my next house, it will be For Sale By Owner, and I will pay the $500 to $1000 to have a real estate lawyer do the paper work. Wait until spring, put out some open house by owner signs, sale it yourself and save the money. My.02

cheyenne10 · 10-20-2006, 09:34 PM

A pep peeve for sure.

Dealt with a couple of realtors lately. They both fit the stereotype. Hand wavers without any specific answers and did not get answers when requested. I appologize to any hard working agents before hand. I think the industry does not regulate itself well.

Tell me why we need a commission sales in this industry? Why can't we pay for what we get? If agent works 10 hrs they get paid for that, 100 then the same idea. Work for me and stay employeed. Loaf and I will move on. I think it is very strange to get fee based on someone elses amount of equity. Is selling a $400k home twice as much work as a $200k home?

sorry for the rant, recent dealings supported long standing views. I've always said if I can't beat them I might join them. I think I would make a heck of an eduated hard working sales person.

duckboy · 10-21-2006, 08:34 PM

It appears that the general consensus is that Realtors just rake in the cash without much effort.

If you really believe that, then why arent you folks Realtors?

It is not uncommon for a realtor that makes 40k a year in commissions to have to spend $16,000k in the split to their brokerage.
$2400 in franchise fees.
60 hrs of coursework in legal and other aspects of their craft. for their first licensing and first renewal,

About $150/qtr for RMLS Fees and $150/QTR NWMLS fees (another 1200.

So that leaves about $20 grand in the realtors pocket.

So we started with 40k and end up with less than half.

Oh yeah,
then there would be fed income tax, Marketing, Gas.

Those 1 page color ads in the real estate book cost about $400 a month.

Pretty hard to be a Realtor without a Web Site of some kind (also not free).

It is not rocket science, but it is not an abundanza of easy money either.

It is work.

A good Realtor is worth it, a slacker Realtor, or Dentist, or Accountant etc is not worth it.
My professional and personal opinion.

Seefood Man · 10-22-2006, 09:00 AM

When we moved back to Washington, about five years ago. We found the house we wanted and it was an Assist 2 Sell. We bought in our own realtor as this was an interstate move. Also, the fees were not out of our pocket. I must say that it was well worth it as everything want very smoothly. The owner of the house was a bit shady to begin with. He called me in Denver and said " If you get rid of your realtor I can pass the savings on to you". I told him no way as I needed someone to look out for our interest, and I am glad I did.
However, on the other hand, if we would sell this house I would feel comfortable in doing it myself as I pretty much know the current area market, and my entire home is not in a truck 1200 miles away. Big comfort level there.