Posts: 18,766
Threads: 1,447
Joined: Feb 2014
Just curious what those of you who have done various house buying/selling have done to try and mitigate the rather absurd 6% commission for home sales.
e.g., $200,000 house, 6% commission is $12,000, split between the buyer agent and seller agent is $6,000 each. If we assume I pay them $50/hour for their work, that's a solid 3 weeks, 40 hours per week, EACH, selling just my home (or a solid 1 week each if I assume I'm paying them $150/hour, which in a salary job would be about $300,000/year).
Realtors don't do anything like that amount of work -- especially the buyer's agent since these days you probably did a pretty good job of finding the house you wanted online and did your own investigation into schools and so forth.
But negotiating down the commission can get tricky. The buyers' agents may mysteriously get thin if the seller is only splitting half of 4%.
There's always "for sale by owner" and then hire a lawyer to do the paperwork (much cheaper) but I've never really looked into it.
I'm not really aiming to sell anytime soon, just curious what, if anything, other people have done to mitigate the standard 6% commission.
Posts: 5,093
Threads: 321
Joined: Dec 2004
Technically you can negotiate any rate you want with an agent. But many are bound by their company to not accept anything below a certain rate.
Your calculations are off too, agents get half that amount. They have to split their take with the real estate company. So 6% is actually 1.5% per agent. with the other 3% going to Century 21 or whatever. So they can really wind up doing a lot of work for not much money in the end.
My agent only charged me 4.5% for my home sale because he found the buyer himself.
You can negotiate with agents depending on the potential sale price of the house. If it's worth a lot, they will be willing to take less of a commission %. My agent also donated a 1% of his take on the buy side to reduce the price for us because we bought a house that was considerably higher than the price range he normally closed on so he was content with a smaller % take.
All depends on your house. If it's something you know will sell quick and easy, you might not need an agent. I have a friend that desperately wants to move into a certain area, and he is dealing directly with a homeowner so that agents aren't involved.
In my experience, in this day and age, to me the only thing you want from a real estate agent is his ability to negotiate the price on your behalf. Some are REALLY good at this, and it's worth having that person because he could make you more than 6% My agent REALLY sucked at understanding what I wanted out of a house, and I did all of the searching myself. But he was a a seasoned guy of 30+ years and really worked the prices for us both on the sell and buy side. His experience was probably intimidating to these wet behind the ears housewives turned part-time real estate agents. Make sure you get an agent that does the job full time and has a lot of experience.
Posts: 3,034
Threads: 220
Joined: Jul 2003
This is why my wife is training to be a real estate agent...
One of her relatives (who admittedly has been a realtor for 30 years) earned over $600k last year. Even her two children, who have only been doing it for 2-3 years, are earning $2-300k a year. They live in a part of Maryland where many of the houses they are selling are $1m or more, so they are getting $30k per sale. It's insane.
The job is more complex than it seems, especially if there are problems with the house, or buyers pull out, but getting $30k for what may be only a few hours work is a pretty sweet prospect.
Ex SWG, L2, CoH, Wow, and War
Currently PvPing in the stock market
Posts: 5,093
Threads: 321
Joined: Dec 2004
Grieve Wrote:This is why my wife is training to be a real estate agent...
One of her relatives (who admittedly has been a realtor for 30 years) earned over $600k last year. Even her two children, who have only been doing it for 2-3 years, are earning $2-300k a year. They live in a part of Maryland where many of the houses they are selling are $1m or more, so they are getting $30k per sale. It's insane.
The job is more complex than it seems, especially if there are problems with the house, or buyers pull out, but getting $30k for what may be only a few hours work is a pretty sweet prospect.
My wife's cousin is a real estate agent in New Canaan, CT which is a very rich area. She makes more than her financial manager husband. She only sells homes worth a minimum of 1 million, and her largest sale was 3.825 mil.
