Realtor Commissions. The Great Hush Hush Exposed.
Are 6% Realtor commissions “customary” or “prevailing,” or the “average?” (hint=no). Do you get what you pay for? (hint=oftentimes no) This post is long but it uncovers the unspeakable… COMMISSIONS!
Why does it matter? Because on a $500,000 home each percent is $5,000! Any ignorance about commissions may lead to a royal ripoff. The trick is that less commission isn’t always more “savings”, but the flipside is also true, because a higher commission isn’t always followed with better performance. Knowledge is power.
Background: Ever wonder why there are nearly no Realtor blogs discussing commission structures openly? (probably not, but for the other 3 of you…) It all has to do with an AntiTrust price fixing case against a few Realtor brokers decades ago. (I just covered it in my AntiTrust Law class, this is my last semester at AU! for those that are curious followers.)
These brokers got together for a dinner at Congressional County Club in MD. The organizer was F0LEY, the then President of the Local Board of Realtors. He got up and said he was changing his firms rates to 7% from 6%. (insert tons of details here). 
His excuse was the market was horrible and tons of homes were listing, but nothing was selling, so they were in dire straits. Ultimately, several were found guilty of conspiracy to raise commission rates in violation of the Sherman Act, an Antitrust law.
Fast forward 30 years, the Realtor community is still terrorized and instructed to NOT TALK ABOUT COMMISSIONS publicly with other agents. And to even get up and leave a room if somebody talks commissions. I have seen it, it is pretty funny when the word commission is mentioned and everyone freaks out and becomes a lawyer “You can’t talk about that!”
It got so bad that the Virginia Assoc. of Realtors’ legal counsel didn’t want to say “6% commissions” when teaching agents, so he referenced a number of hypothetical “chickens” instead of using actual percentages. He happened to use the number 600 chickens. Hum, if that isn’t a wink wink to the number 6, then I don’t know what is. (see Blog post on topic or video see minute 11:20) Gimme a break.
In my opinion, in the end, this chill effect & gag order has the opposite result. Instead of colluding to increase prices, the new silence solidifies what the consumers (and press) think is the “Normal” Realtor Commission. And the press make it worse with headlines like: “Chipping Away At Realtors’ Six Percent” (link). Or Wikipedia’s “The median real estate commission charged… 6%”. This is WRONG. With misinformation like this, what is the consumer to think? Keep them in the dark, and they are worse off. So I’m gonna spill the beans on what is “normal.”
First a break down of the total commission charged. 
This is VERY confusing to newcomers and consumers (remember confusion can be profitable). The listing agent (actually their respective brokerage firm) charges… lets just say 100 jelly beans (instead of using “chickens“). Of which some of that goes to the cooperating buyer agent. Sometimes it will be half (50 beans), sometimes much more, but rarely is it much less (ie. Statistically it is rare for the listing portion to be higher than the buyer agent portion).
ACTUAL STATS on the Buyer Agent offered Commission!
Example 1: In Arlington Virginia, looking at 100 active regular (non bank, non short sale) listings from $400k-600k, they are offering (this data is only shown on the Realtor MLS and not public sites):
- * 3% commission to the buyer agent. 95% of the time!
- * 2.7% once
- * 2.5% for four of the listings
While that is consistent with what I have seen, there are variations in many areas and price points.
Example 2: Washington DC $400k-$500k, 200 active homes.
- * 3% commission to the buyer agent 62% of the time
- * 2.5-2.7% offered 37% of the time
- * Three listings had 3.5-4% (see video about “bonuses” below)
Example 3: SHORT SALES in Manassas. 35 actives
- * 2.5% commission in twenty listings (55% of the listings), plus four homes at 2% commission. Total= 66% of homes between 2-2.5% commission
- * 3% commission on eight listings or 26%
(In other words, short sales tend to offer only 2.5%. Buyer alert: Make sure the 20% lower buyer agent commission is NOT the reason your buyer agent is discouraging Short Sales. Only the buyer agent, not the buyer, knows the offered buyer agent commission before visiting the home. See also the benefits of an exclusive buyer agency agreement, see blog post)
So now that you understand how the buyer agent is paid, then you have the ammo to catch some trickery some listing agents pull. Because the commissions are bundled into one number, ie 100 jelly beans, they can offer less to the buyer agent to make the total number look lower.
Just last week there was a non-Redfin Realtor on Redfin’s forum advertising/discussing his new promotion of 3.5% total commission for a full service listing. I called him out on not disclosing the break down of that total (ie how much to the buyer agent). But since his actual last 2 deals offered 3% ($150k listings), I gave him the benefit of the doubt. But he responded that the 3.5% “deal” was with 2.5% to the buyer agent. Ok, no problem, but do you see how that can be confusing to the consumer?
Sidebar: sometimes over 3% is offered to the buyer agent or a “Realtor bonus”. Here is a video of my talking on CNBC about this practice. 
So now that you get the Buyer Agent “typical” commission, let us move to the key question:
“What is a Normal Realtor Commission?”
I’m splitting hairs here, but the word “Prevailing” or “normal” is confusing. Shouldn’t the question be “What is the AVERAGE Realtor commission?” The first questions is manipulated by the press and the silence on the topic. The second is fact (kinda).
Well thank goodness for REAL Trends! A non-NAR organization (NAR can’t track commissions in fear of AntiTrust laws, see page 14) that tracks the average. Well it was as low as 5% in 2005 (see Inman post) and in 2010 it was 5.4% (see story).
HOW HARD WAS THAT?
THE AVERAGE COMMISSION IN 2010 was 5.4%!
Finally, some real stats right?
Well kinda. That 5.4% average isn’t broken down. People like to assume it is half and half, but that is not likely. So if 5.4% was the average in Arlington, it would be 2.4% to the listing agent and 3% to the buyer agent. But the study is nationwide. And I don’t know what the rest of the USA charges or if they include FSBOs (see post on Saving $20k going FSBO).
And it isn’t clear if that amount covers the new trend toward charging what I consider bogus “Admin Fees.” (See my Admin Fee post and Ken Harney’s article. Or watch my video.)
Regardless, the MOST I have seen is 3% (listing side) plus a $400 admin fee. However, I did hear one funny story. A large local brokerage firm was training their newer agents to go to a listing presentation with 7% prefilled into the contract. And then dramatically slash the 7% as if it was a “limited time only” discount or car promotion. Come on, give me a break.
Well does one “GET WHAT YOU PAY FOR!”… ?
NO! (but I have many thoughts on realtor rebating, see post). Wow, do I hate that line and sooooo many Realtors use it when trying to defend their commission (google it). Why do I hate this pitch? Because I’ve seen a ton of “6%” agents that suck (blog post), or at least not do everything they should be doing. Most agents don’t even do what I consider the basics. Stuff you would be like: “Duh, why don’t you use 30 photos?” This stuff is what we at FranklyRealty.com call (warning, upcoming link could be seen as a self promoting comment) “Excellence Comes Standard” in our Bill of Rights. Also when I started 7 years ago (I feel old now), I did a $1 commission on $3Million home. It launched my career and my first of four Wall Street Journal features, and I was worth much more than a buck!
YEP! 80-90% of listings don’t have the maximum 30 photos!
Don’t believe me? Do a FranklyMLS search for Arlington Condos from $400-$800k and sort by the # of photos column. Only 16 of 163, or 10% of agents posted 30 photos! This is embarrassing (Attn Agents: I have an online free 2hr photo class for agents, email me).
Why don’t they post 30 when it is free? Maybe because it can take 60 minutes with our antiquated MLS system. Expecting the “average” agent to wait an hour? Fat chance. And sure, maybe you read this post, and you stand up to your listing agent and say “give me 30 photos” and they say “SURE!”, but what else will they cut corners on? Those are the things that sell homes. Not the bogus checklist (see my spinning car video) including and bogus pitch: “We will list your property on 650 websites.” (Disclaimer: I am not saying that an agent that takes 10 or 25 photos “sucks” and every agent using 30 photos is perfect, but I’m saying why take that short cut?).
Under 0.1% of Listing Agent use Walking Video Tours, posted on the MLS. Even though it is FREE to them! 
Few agents even know that there is only 1 service in the DC, Virginia, MD area MLS that will allow an agent to post an unbranded walking video tour of their listing, on the MLS. Why does this matter? I agree large super wide angle photos are the more important, but buyers also care about the flow of the house from room to room. A walking video tour (not those silly “flying photos” to jazz music virtual tours) gives that Sunday Open House feeling everyday. (see Frankly Agent Megan’s listing, and walking video example).
Also note that the rare listing agent that uses Youtube videos doesn’t count since the MLS doesn’t let you link to Youtube.
So sellers, tell your listing agent to upload a video for free at VideosByAddress.com or watch the 20 min How-to Video on making real estate walking video tours.
————-
Anyhow, I’ll stop rambling. Hopefully you learned something and this blog.FranklyRealty.com (don’t forget to sign up for new posts) will help you sift through the pitches and help you NET the most (see more posts on Listing Advice or Buying advice). Because in the end, isn’t your NET (and hassle factor/convenience) what really matters? On the one hand you might get ripped off with one agent charging 100 jelly beans (metaphor for commission percentage, see above), but then you never see them after the initial pitch, and 3 newbie assistants run the show. Or you might find a great eager agent willing to do it for 20 Jelly Beans and still be “full service,” and do a great job.
Conclusion: Consumers deserve to fully understand what all of their options are and how the confusing Realtor commission system works. With this information they can make the best decision for their needs. Whether it be “flat fee” or “Discounted” full service, “average” full service, or regular “full service,” but hopefully avoiding “crappy” full service.
Best of luck selling your home!
Written by Frank Borges LLosa- Broker/Owner FranklyRealty.com and FranklyMLS.com
p.s. Did you catch me on HGTV’s My 1st Place this month? p.s.s. Did you see FranklyMLS.com now has Zip Code boundaries?
And a photo of my son Hartly, now 8 months.
Photo Credit: Chicken & Jelly Beans
Please report typos.
- 21
- February
- 2011
Great!
Great post frank! Thank you for this great information
I agree with your statement about agents not posting 30 photos. It amazes me when I see million dollar listings with 4 photos. In my opinion that is absolutely unacceptable.
I think franklymls.com is great. Thanks to for the zip code boundaries. Very helpful.
Frank, what are your plans in regards to your law degree?
Impressive for you to work on that while running a leading edge RE brokerage!
Keep an eye on that little guy Hartly, he’ll keep you on your toes once he gets those legs dialed in :)
jeffrey
PS, great article
Great reporting, your videos got me to purchase a flip camera, then the Sony Blogee( hated it) purchased the 3rd generation Flip. Now I always do a walking video, even on listing presentations to show owners and helps me get their home ” in shape”.
Thanks so much, congrats on last semester at AU. Most of all, love Hartly.
Linda
Thanks Linda. If you like the ease of teh flip type camera, consider getting the VADO. Just like the Flip but 25% wider angle. Vado HD Wide
damn son you forgot to post a link to watch u on my first place i wanna see that
Interesting article. As a loan officer, I have never observed a reticence from real estate agents to talk about commissions. Here in Washington state, the big name companies charge 6 percent and the discount companies charge less, sometimes a flat fee.
When I was writing Homebuyers Beware, I interviewed real estate agents from all four corners of the U.S., and the vast majority said the full service 6% agencies provide a much better service and were worth every last dime. But I agree with you that a person has to judge by the individual agent, not by price only. And by the way, the same goes for “years of experience.”
Hartly is a good name for a cute boy like yours.
Great post Frank. Sometimes its hard to find 30 good photos in a home, Especially when the home does not show that well, even after staging and all. For example a small, old home with bathroom and kitchen not updated at all. On a run down, as-is sort of home I only post enough of the good pictures so that online buyers don’t reject a home based on photos only.
I always post lots of photos on other listings. sometimes I have more than 30 in other virtual tour as mris only allows 30.
Great article Frank! Most buyers/sellers still think the 6% commission is the 11th commandment. BTW, I recommend your excellent web site to everybody I know looking/ thinking about a real estate purchase.
Thanks, great information
Great article. So many folks don’t realize they can haggle on these realtor fees.
I stopped selling real estate as I felt like the whole real estate principle amounted to government sanctioned mafia. We don’t need agents anymore. The whole process was created years ago to ensure equality and rights. I think that is a non-issue today.
Hey Mark,
I can’t say I agree with your conclusion from reading the post, but I still appreciate you adding your input.
Hello Frank,
My name is Fahiem Usman, I just passed my national and state exams am looking for a brokage firm to join. I currently work full time but but want to be a daul career relator. I was wondering if your company supports this?
Thanks.
Congratulation! However we actually don’t take newcomers or weekend warriors. But I know all the big boys do. They will take anybody!! Email me offline for some suggestions.
Frank,
Are you a Realtor? If so please review Article 13 & 15 of the Realtor Code of Ethics.
Realtor Code
Hello Frank,
I think this site is great! I am looking at becoming a realtor and a broker and wanting to open up in multiple states, three to be exact. What are your thoughts on doing that, do you think I should franchise with a large realty company to get started? Or am I crazy to think this could work?
Thanks,
Yvonne
There are 2(two) commissions, based on the Listing Brokers contract with the Seller. Listing Broker must offer a Coop to Buyer Agents. This coop is the best chance for selling the property. 98% of Buyer use their own Buyer Agent. What is left for the Listing Broker is up to him. To get the job done the listing agent should offer a traditional amount to Buyer Brokerages and take less. Taking less on the List Brokers side may result in less marketing on the property. Marketing cost $$. Agents must know Real Estate has changed.
These things aren’t published and talked about with non-clients because of antitrust law. Serious issues on this webpage. We’re discussing this blog post in our ethics class today. :/
[…] on my 2011 post discussing Realtor Commissions was the topic of a Realtor Ethics class. Wait for it… on what NOT TO DO WHEN YOU BLOG! How […]
Hi Frank, you don’t have to post this publicly. You are so up to speed with alternative viewpoints regarding listings, agents, etc. why do you continue to always assume that all agents are realtors? I belong to a brokerage that has been in business for some 50 years in Virginia Beach/Norfolk. We have some 500+ agents and none of us are “realtors” and I am thankful to belong to a brokerage that feels secure enough to snub it’s nose at the whole “realtor” thing… Also I am interested in your free webinar on photo taking for agents. Thanks! KK German
In Northern Va, it is different. My guess is 98% of agents here that do at least one deal a year are “Realtors”. Why? One reason: LOCKBOXES. Up here they are electronic , ie no combo code, and you MUST be a Realtor to get the electronic key. So that is why.
Thanks for reading and commenting.
Frank
Yes, I am a Realtor. Thank you for your brilliance.
As a buyer who is addicted to looking at listings on your site, there is a thing I like better than a video (which I have never seen listed). FLOOR PLANS!!! A typical family of four or five looking at a 4/2.5 house will want the bedrooms a specific way. We need our kids on the same level as the master as they are young. If they were older, we might prefer a master on a different floor. If we had one teenager and other kids who are young, perhaps a basement bedroom would be what we really want.
I have seen a few listings with http://www.mouseonhouse.com floor plans which link pictures to it. I love it!
I have no affiliation with them, I just like those listings.
Hi,
Interesting articles!
Just curious…what do you think is a fair fee if the seller & buyer find each other and neither has an agent. Everything is agreed upon but they need someone to actually file the sale and do all paperwork and cover the legalities. Should I use a semi-friend agent who has offered to do it for 1% (about $4500) or should I seek out a real estate attorney? Or do I have another option? Thanks in advance for taking the time to comment back.
My concern is with the form some realtor’s ask you to sign, ensuring that you work with them/broker for a year. This form stats the minimum commission they have to be paid, in most cases 3%, so if the seller agent is not willing to pay the full 3%, then the rest has to come our of your pocket. Why do some realtors enforce this form so much? I mean I want to get a feel for the realtor first. Also,what is the lowest that they can bring their minimum commission to on this legal form?
Talk about sensationalism. What are YOU selling? There is no “secret society” that prohibits agents from speaking about commissions. In fact, lots of agents in my area advertise low commissions or 1% commissions. So whatevery hype you’re stirring here is to sell something. Anyone who believes Frank gave you some enlightened information, well hey, I’ve got some kool aid I’d like you to drink. Lord help us.
In Sacramento, California we have MLS you are not required to be a realtor (circle r). If your broker is a realtor however all the agents must be realtors. In this town it is very hard to find a agent who is not a realtor. In fact i have been looking and have never talked to one.
Thank you for your comment.
Is there usually a difference in commission rates for selling land only? An agent in Litchfield, CT stated he works on 10% commission. Seemed pretty high to me.
Avoiding professional services is like jumping over a dollar to pick up a penny. IF you are experienced enough to circumvent using an agency to get an offer does not mean that you are prepared to overcome the tribulations of inspection issues, buyers remorse, unspoken negligent disclosures and the thousands of other turbulent potentials between contract and closing!
Lee Forbes – Broker/owner in Bradenton, FL
The link to the video tour is not available any longer. This post needs to be updated… I am surprised that YOUR brokerage hasn’t done that yet…?
On Martha’s Vineyard, for years we had a dual commission rate and land was 10 %. Those days are a fleeting memory. Less land to build on and more competition but in the end its what ever you can negotiate, while being fair. As a principal I am always willing to take a little less, especially in the throes of a hard negotiation, to keep the deal from falling apart and this is one reason not to take too little on the listing.
Frank, nice blog post . I can here because I am revising my office policies and find it hard as a small firm to know what I should offer my agents in inter-office commission splits. I incur all the office expenses and we advertise a lot. I’m sure there is no magic to the magic number but curios if you have any thoughts on that. Thanks, Jim Feiner, Feiner real estate.
Wow Frank you really EXPOSED all those darn real estate agents. What a dumb shmidt. Why don’t you blog about how much your agents and team members have to pay your greedy butt? Lets talk about that. The regular agent that you are talking about doesn’t make the whole commission. Not even close. 50% or less most of the time. They get into the business then greedy dudes like you have money to advertise to get clients and take cuts of the agents commission. Add 20 agents. Holy crap, that would add up FAST. Who is the real crook? Way to go Frank. You are such a good guy.
Hello Jack, Appreciate your comments and reading the post. Yes it would take an entire new blog post that would cover that and agent doesn’t take home 100% of the commission (in most cases). Many consumers do have that misperception. They see a large dollar amount and think it all goes to the agent, and it must be a scam. Sorry but it does take money, employees, resources to run a company. And yes some of the “big boys” will actually charge 55% of the commission, so the agent walks off with 45%. And if the agent is a newbie, many require them to partner with an experienced agent and give that agent another 50%. I know one new agent that did a deal for their father. $10,000 commission, her walk away was $2,200! after all the splits. And with that $2,200 SHE pays the marketing expenses!
As for my company, the agents are free to go to other firms that might have a better split, but the split shouldn’t be what matters. What matters is support from the broker and helping that agent achieve their goals. Some no-name firms charge $0/mo and let you keep 100% of your commission. Sounds great right? Well, they make up for that lost revenue… in volume… (no, that was a joke), they make up for it with Affiliated Business Arrangements. They funnel all the deals to their title company, their lender, and then they charge the client a $400 admin fee and say it is for the broker’s overhead. When in fact is it because the agent demanded 100% and the broker had to keep the lights on, so they found a way to just charge the consumer more. Jack, do you want that? You want the consumer to be charged more?
I’m concidering buying and selling soon. Has this information changed much since the original post? Is it fair to ask for 3 chickens to sell plus 3 chickens to buy if using the same agent for both?
Yes it is still the same info. Not sure about what you are asking regarding what is “fair”.
Just stumbled upon this site. I am selling a home in Iowa and have interviewed many realtors and they all charge 7%. They say that’s how its been for the past 10-15 yrs. I am just trying to figure why the hell I should shell out 25k to realtors. I found my first home on trulia, a home my realtor didn’t even know about. My recent experience was selling, that realtor overpriced the house and it sat 4 months in a hot market, “terminated contract with her.” It seems like a racket.
We’re getting ready to sell a $275,000 house in Virginia and thought about using a realtor. Even at 5% its just a little hard to fathom how someone’s service can be worth that much, $13,750. That seems steep to me. Has anyone ever suggested writing a contract that’s performance-based – like agree to pay five and a half percent if a sales contract is signed within 30 days of listing, and then the second month pay at 4.5%, and the third month pay at 3.5%? Then there’s an incentive for the real estate team to make it happen. Sorta like the NFL and some of these contracts given to the athletes. Why not structure a contract to pay based on performance, then you’re going to attract the athlete that believes in their abilities sign with you….they “plan” to be, and “want” to be, a producer.
The whole business is a racket. I’m a buyer who has gone through two realtors. I sent them all the listings. They then sent listings I had already sent them. They lied about contacting two sellers’ agents outside of their normal areas — about listings I had said were of great interest. They never contacted the sellers’ agents! (I later veridied.)
And they want 3%. Why do they think they are entitled to 3% when they make their clients do all the goddam work?! Almost everyone I talked to who bought a house in the last two years has said they found it! And yet commissions haven’t changed in ten years.
And about some of the commenters above – who are obviously realtors – they sound like unprofessional a**holes who probably seem polite and friendly when they are taking to their clients. I imagine my own realtors are just like these jerks.
This is a racket. I don’t understand how an entire industry can get away with this level of service. Are there any good realtors? I haven’t found one yet — more like used car salesmen to me.
God help us.
Hi Frank!
I have a question. I am a newly licensed broker in NC and have a lot of potential leads for listings & buyers. I already work for an individual broker/business as a listing/buyer assistant, my boss is signed with one of the “Big Boys” as their broker in charge firm. This being said I have been offered the position as a buyers agent with my company. I was told the standard splits are as follows; out of any buyers agent commission I would have to give 34% off the top to the BIC first and then another 40% to my boss. Now I will add that the Big Boys do not charge any hidden fees and have a cap per year, offer lots of training, support, oversight, technology ect…
My established boss does not offer a cap but will pay my MLS fees, association fees, advertising fees, marketing & materials as well as refer all buyers to me. I should also mention the listing clause, I would be required to refer all listings to my boss who would give me a 25%
I know the BIC fees are pretty standard in my area, whether they do % or nickel and dime fees for everything, so my question is about the 60/40 split and the 25/75 split. What is the norm for these….if there is one.
Thanks!
I have to disagree with the generalization that discount agents have to provide less value. As a former CPA, I switched to Realtor because of the ridiculous compensation-per-hour, something Realtors have lost sight of, especially in my high-cost area (North Scottsdale, AZ). Not trying to plug my services since I’m only licensed in AZ, but see my “Seller’s FAQ” for a clear explanation of how a discount agent can provide the same service, and earn the same, as “full service agents”:
Is this site still going? I live in CA and have a very small, mediocre home that is now worth $320K. I in turn own real estate in TX so I get sticker shock now that I’m living here. Why the heck is the 6% commission across the board even though some states are a higher cost of living? I found your blog because, surprise, I have a HUGE issue with paying a realtor $19,200 to sell my current home when houses in this neighborhood have been going like hot cakes and I could likely sell it myself! I can see giving someone $5-6K to sell it, but the price of a new car! WTH?
Jay, Thanks for your response. I am sorry to hear you have had such a bad experience. While not all agents are like that, I am ashamed to say that there are a number that are. This is why I got into the business. Thanks
Thanks for your comment Jim.
Yes many sellers try and reinvent the wheel with different bonus structures. Most have unintended consequences. For one, your idea. If you do that, what will happen at the time of figuring out the sales price? If the agent was on the fence with suggesting $275k or $270k, which one will they be more likely to steer you toward? Right. The lower amount. Trust me, no agents wants a home to sit. There is already plenty of built in motivation there. Funny thing is, some people have suggested offering the opposite! A HIGHER commission if it sells SLOWER. Yep. They feel like the house sells itself, and will sell super fast, so if it sells fast, they think the agent does LESS work, so should get paid LESS money… Isn’t that funny. Exactly the opposite of your idea.
As a simple consumer who is not professionally associated with the real estate industry, the real estate commission and industry structure itself completely irritates me. It should not be so expensive to sell a home. People work for many long hours and many years to build equity in their home, just to have tens-of-thousands of dollars taken by a realtor in a matter of weeks. And yes, I realize that the realtor has to split much or their commission with the real estate firm for which they work, a senior or mentor agent if they are a “newbie”, realtor insurance, MLS fees, realtor marketing/advertising fees, postage fees, office rental fees, etc. . . . . . but I DON’T CARE. I hate to sound like someone who is mean or lacks compassion, but I want to pay a price that is commensurate with the amount of work that is performed for me, not have all my profits taken from me just because I have little choice in options for selling my home. If the someone comes to shovel my 10ft X 20ft driveway and it takes them an hour, I can see paying them the high hourly rate of $50, $60, or even $75 dollars due to their hard work in the cold and my general laziness, but I will not pay $1,000 just because this individual is using a $500 titanium-plated shovel, has exorbitant gas costs because he drives a 3 mile-per-gallon dump truck, and pays $800 per year to belong to the National association of driveway professionals. I agree that one needs a hardworking, dedicated, knowledgeable professional representing them, and that individual should be compensated for their hard work, but receiving $2,000, $3,000, even $5,000 dollars is more than enough compensation for an individual realtor’s amount of work. On the other hand, it is not my concern that a realtor “might only sell 1 or 2 houses per year” or “has all these fees to pay”, after all, I am not in the business of supporting everyone in the real estate industry who wants to stick their hands in my pockets when it comes time to sell the home that I spent many years paying into.
Hello Dominic, Thanks for your comment. I find it interesting that you don’t think there are many options for selling your home. There are tons of “discount” options out there. If those discount options can net you more, then you should go that route. But we pride ourselves on working harder to get the client a higher net. I know it seems easy from the outside, but it is real time consuming work, and if we get you more, then we have succeeded.
Also you mention having to split the fees with the broker and state real estate board fees, but you left off that oftentimes half goes to the agent on the other side. OOps, there goes half, before even accounting for that half getting chopped up. You might not care where it goes, but that is part of the sometimes legally required overhead. Sure if we had no real estate regulations, maybe fees would be lower, but then you are at risk of scams and other trickery when buying or selling your most valuable asset.
Thanks again for your reply.
First let me agree that a very large portion of agents lack any level of skill or expertise in the area of sales and marketing. How could they? In my MLS there are currently about 1400 agents which when ranked by production and then printed out on a 106 page long report, pages 44 through 106 have sold between 0 and 3 homes in the last 12 months. That should terrify the average consumer when considering the stakes.
That being said, I’d like to point out a few things about the commentary on the number of photos used as being a benchmark standard for the expertise of an agent. First…my own MLS maxes out at 25 photos. Second…although I have certainly done video (both aerial and interior) on listings, none of that content gets picked up by our MLS. Third….I deliberately do NOT use the maximum number of photos. While they are certainly a critical part of the marketing, it’s the emotional impact of the home itself that drives the buyer to make an offer. By “cataloging” the entire home with an extensive photo record you risk damage to your seller in 2 ways. First, you allow buyers to make an “armchair” decision about the house without ever having to get up off the couch when your job is to get people inside the home. Second, by showing them everything in the pics you leave no “joy of discovery” to happen in the home. This is particularly true when using a fancy wide angle camera that makes the photos look better than the actual house. There is nothing more devastating to a sale than having the first emotion experienced in the home be “dissapointment”. You can’t recover from that. Think Internet dating profiles made with airbrushed pics vs meeting the real life person who is 10 years older/grayer/and more out of shape and you approximate the reaction.
Far better to under promise and over deliver. A ridiculously effective alternative to “photo cataloging” is to deliberately leave some of the most exciting parts of the home out of the photos and instead, hint at them in the description. The buyers (who tend to be more plentiful when you entice them in this way) are taken completely by surprise and leaves the home in a heightened emotional state. More often that state is fear. Fear that someone else is going to make an offer before they can get to their checkbook.
Try it sometime. It’s as close to magic as it comes.
Incidentally, the ONLY reason I responded to this post is because it came up at the top of a search I did looking for reputable discount brokers in my area. You see, a good friend of mine asked me to sell his house at a considerable discount and I told him I couldn’t touch those rates but would have a look around to see if there were any competent options. I shudder to think what perception people walk away with after reading posts tauting 30 pics as the defining trait of a good agent. Anyone can click a camera 30 times. It takes considerably more skill to determine what to do with them.
New to the game but have been involved (parent) for decades. BTW, some good stuff I’ve been reading so far. Just have to say that realtors, like anyone else, can be crooks. But crooks don’t last long in this business. When you hire one you are in a sense paying for peace of mind. We are like health ins. when you need us you are damn glad you have us. That’s all I’ll say when people bitch and moan about commission.