You’ve heard it send 1000 times and just for the record I’ll say it again, everything in real estate is negotiable and real estate commissions are no different.
Zip, notta, nothing.
The seller typically pays all of the fees associated with the real estate commissions. Some instances where this may not be the case include:
Auctions and special programs usually involve selling a home at a discount, therefore buyers usually don’t object to paying the commission considering the home is likely priced well below market value. Home sellers should note; when it comes to “For Sale By Owner” homes, the buyer might be shopping these listings with the purpose of also saving the commissions.
If you are a buyer working with a real estate agent, you may want to ask them if they will show you no or low compensation homes (those are homes that don’t advertise compensation or they offer low compensation). My personal approach is to show you all the homes that might work and (if possible) I will negotiate my commission as part of the sale. If that is not possible I will either ask the buyer to compensate me a for a fair amount or if the buyer is unable or unwilling, I will simply excuse myself from the transaction.
Not all agents have the same approach. It’s important for you to understand your agent’s approach so that you know if you are seeing all the available homes.
When a seller lists a home for sale the commission is agreed to between the seller and the listing broker. This fee is the entire amount due upon the successful closing of a sale from the seller. If the home is sold to a cooperating broker (a buyer’s agent) then part of the commission is paid to the buyer’s agents firm. The seller should ask the listing broker if this fee is split down the middle and if it is not, what is the advertised compensation to the buyer’s agent and how competitive is that in the market?
The real estate fees can range from a couple thousand dollars to ten’s of thousands of dollars.
If you decide to list your home with a help you sell type of company, also known as a limited service listing brokerage, you’ll usually pay upfront a flat fee (anywhere from $500 on up) and a percentage of the sales amount for the buyer’s agent. For that fee, you will get your home listed in the local multiple listing service. The seller typically gets to choose the percentage offered to the buyer’s agent, but if it’s too low, you’ll likely receive few showings by brokers. You’ll want to know if the flat fee includes things like a real estate lockbox, photos, help filling out the paperwork, help promoting or advertising the home or if you are entitled to a refund if the home doesn’t sell.
If you decide to list your home with a full-service broker you should expect to pay a percentage that will typically range between 4% to 7%+ and which are always negotiable. With this type of service, you should expect high-end marketing specific to your home, regular updates on market conditions and an aggressive negotiator. If the home does not sell during the time of the listing agreement, most listing agreements will not require any compensation. Your broker and/or the buyer’s broker is only paid upon the successful completion of the sale.
Let’s break down the services you receive when you list your home for sale with me.
After my business expenses are paid, and these expenses are due regardless of the successful closing. I then must pay the following personal expenses:
After all is said and done, I typically take home about 30% of the listing side commission or about 15% of the total amount the seller pays. If I’m not successful; not only is there ZERO compensation, but all my advertising and business expenses must still be paid.
All the above information pertains to Washington State as of the date of this writing and is subject to change. No guarantees are made unless it is writing. If you need a local agent, please contact me and I will get you a credible referral for your market.