Agent Commission

Is 5% (2.5% per side) still the norm outside of refin agents?  Is it 5% regardless of price of home?  Selling a home for $4M and paying $200K in commission seems excessive as I don't think selling/buying it is twice the work for an agent as a $2M home.  I have heard some people say that the 5% is now largely negotiable to 4% and even 3% in some cases.

Hell no, commissions are now down to 4% even for homes up to $5m in Irvine.  All commissions are negotiable, you are the seller and determine what you'll pay not what an agent tells you that you need to pay them.  If any agent wants too much commission move on to another agent because any agent asking for 5% is being a greedy pig.  The market even for up to $5m is moving fast so no need to pay that much.  My sellers pay less than 4% total commission but I don't have a broker split and royalty fees to line the pockets of a broker and franchisor.  There are a few listings that offer 1.50% buyer agent commission so you can assume the listing agent is also getting 1.50% but those are more one-offs really (like <5% of all listings). 

It depends greatly on what you are getting for your 5%. There may be "great marketing and mailers" - but in the age of the interwebs mailers brings in zero buyers. This realtor may appear to be a "high volume area expert" - but some "high volume area experts" have sold 1 home a quarter instead of 3-4 each month as true high producers do. I'd comb the agents on-line data for recent sales presentations. Do their $3-4m listing have iPhone or professional photos? I've seen some $10m listings with 8 photos - one of which is a laundry area! Blegh. $4m homes do require a significantly higher buyer contact network compared to a realtor who sells $1-$2m homes day in day out. Has this 5% Agent sold 5 $4m resale homes in the last 12 months? That would be Question 1 before I committed to that high of a fee.

There are some needs a seller has that can justify a 5% list - privacy issues, unique legal questions to overcome, needing a very high level of hand holding during the sales process as you see in a relocation. If a seller needs these "benefits" that should come from a 5% list fee, then OK. Its reasonable for that seller. If you can't find a tangible benefit that your sales process must have, does it make sense to pay for it?  5% is the old 6% repackaged as a "great deal for you". 4% has become the norm, unless as noted a Redfin or flat fee sale agreement comes into play. Of course you get what you are willing to pay for, but overpaying at 5% seems difficult to support considering a homeowners many selling options today.

There are still some agents that want 6% (3.5% sell and 2.5% buy).  They have plenty of listings so there is still a market (very small) for these types of agents.  But I would say over 90% of agents are in the 4% for most areas of OC. 

LA is a bit different though.  Especially in some higher priced areas where the commissions are not dropping as fast.

This is gonna sound cliche but most of the time you get what you pay for. Also, if someone doesn't value their own time, would you expect them to value yours?

Everyone deserves to make a decent living. I use the same RE agent for buying my new home and selling my current place. My deal is that the agent can earn full buying commission and 5% selling my place.  I couldve asked for some of the buying com and lower selling com and the agent would be more than happy to do it bit  IMO if everyone is a little more generous, graceful toward each other, it will help us going through this tough pandemic time.