How much commision should a real estate agent receive?

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OCMommy

New member
In this economy, what is the going rate?  It used to be 6% (3% to the buyer's agent and 3% to the seller's agent).  What is a fair rate or going rate in this economy?
 
OCMommy said:
In this economy, what is the going rate?  It used to be 6% (3% to the buyer's agent and 3% to the seller's agent).  What is a fair rate or going rate in this economy?
Click to expand...
Wow, that's a loaded question.  You'll probably get a different answer depending upon who you ask.  I'd say that approx. 2 out of 3 listings offer the buyer's agent a 2.5% commission (from what I've seen) with the remaining ones offer 1.5 to 2.25% on the lower side and 3% to 5% on the higher side.  I personally think that an agent's compensation should somehow correspond to the work and time spend by the agent, but hey...that's just me.
 
OCMommy said:
In this economy, what is the going rate?  It used to be 6% (3% to the buyer's agent and 3% to the seller's agent).  What is a fair rate or going rate in this economy?
Click to expand...

If the objective is to get the home sold, then you might come to the answer by looking at the results...
Through July of this year, there have been, 1221 sales. Most have offered 2.0%, 2.5%, or 3% to the buyer's agent.
By the numbers:
2.0% - 53 sales - average DOM is 119 - average sale was 1.161% over original list price.
2.5% - 723 sales - average DOM is 93 - average sale was 3.66% over original list price.
3.0% - 377 sales - average DOM is 109 - average sale was 2.80 over original list price.

I'm going to commit some realtor semi-blasphemy here and say that by all counts, 3% does not look like the optimal offering. 
2.5% results in the shortest sales period and the best return on the list price.

You can verify for yourself at the closed sales info at www.irvinerealtorsite.com.

 
Great stats.

I'd say going cheap with 2% is going to do two things: keep your price lower and your property on the market longer. You get what you pay for - deservedly so.

On a side note I've been at Broker Preview meetings where the realtor tells the open crowd that "I don't show my buyers listings with less than 3% commission". How these people stay in business is a mystery to me. If the average sales price is $500k (for example) a .5 commission difference is $2,500. For that relatively small amount, this agent is unwilling to serve the needs of both the buyer and the community as a whole.

Sad to say there were plenty of nodding heads when this tool spoke up. Good riddance to them when the day comes.

My .02c

Soylent Green Is People.
 
Aside from the "its such a small amount" thing, what about the ability that buyers now have to shop for themselves on the internet?  At some point aren't you going to turn to your realtor and be like "hey uh, I saw that house online and it looks like a good fit for me, why don't you ever take me to see it?"

I mean its not rocket science to look at homes in your general price range, the neighborhoods you like, square footage, etc.    Its nice when a realtor can say "oh I've been in there and its TRASHED now, we can see it if you still want to but I know you aren't interested in a fixer upper"  but I imagine excuses like that are only gonna fly so many times.
 
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