Average commission is 5%?

[ocrenter]

[img_assist|nid=25595|title=Redfin|desc=|link=node|align=left|width=466|height=202]

When did the norm of 6% change to 5%? Is this really true?

[NotCranky]

When house prices went berserk.

[meadandale]

I think that 5% is still at least 2x too high.

[Hobie]

[quote=meadandale]I think that 5% is still at least 2x too high.[/quote]

+2 !

[poorgradstudent]

[quote=Blogstar]When house prices went berserk.[/quote]

Redfin and the rest of the internet also cut into Realtor’s margins. It’s pretty easy for buyers and sellers to do their own market research these days in a way that you just couldn’t do 10-15 years ago. And For Sale By Owner is a lot easier too. Why pay 6% as a seller if you can knock 1.5% off the price of the house and pay the buyer’s agent 2.5% to do all the paperwork for you?

I have to say, the one area I was seriously unimpressed by our buying agent was price negotiations… it was left almost 100% up to us how to make our offers and counter offers. Agents just have too much incentive to want the deal to settle rather than fighting hard for a $5k price cut.

[poorgradstudent]

^That said, most of my friends that have tried to use RedFin agents have had fairly poor experiences. Sometimes you do get what you pay for, and most of our friends who have tried a redfin agent to sell have ended up “firing” them.

[fcepstein]

I have a home about to go on the market, expected sale price around $750,000. I think 5% is way too high myself, particularly with a quick sale. At 2%, the agent share is $15,000. Can’t imagine that it takes longer than 100 hours, so that is $150/hr. Seems like a very high rate to me.

One agent has contacted me directly, pre-sale, with a buyer. She offered me 5% to be a dual agent, and quickly back-tracked to 4.5%. I think both are ridiculous. I may consider 4%, but probably 3.5% is what I would pay in that case. Otherwise I will FSBO and offer her 2%, maybe 2.5%.

[poorgradstudent]

[quote=fcepstein]I have a home about to go on the market, expected sale price around $750,000. I think 5% is way too high myself, particularly with a quick sale. At 2%, the agent share is $15,000. Can’t imagine that it takes longer than 100 hours, so that is $150/hr. Seems like a very high rate to me.

One agent has contacted me directly, pre-sale, with a buyer. She offered me 5% to be a dual agent, and quickly back-tracked to 4.5%. I think both are ridiculous. I may consider 4%, but probably 3.5% is what I would pay in that case. Otherwise I will FSBO and offer her 2%, maybe 2.5%.[/quote]

Well, that $150/hr is in part compensating the agents for all the work they put into sales that end up falling apart.

But yeah, the amount of work to sell an $800K home and sell a $400K home is probably comparable. It’s a little odd that agents theoretically get paid twice as much for the former.

[Author]

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