Is 7% standard for commission?

bobandmelMarch 25, 2009

Met with the agent who will sell our home. We are in a suburb of Indy. She stated that 7% is standard for what FC Tucker gets for selling homes....except above 300K is goes a little lower. We will be somewhere around 340K.

Is 7% standard in this market?

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mpinto

It certainly is not. We are lucky when we get a 6%. Often it is 5%, but my office doesn't go below that(company policy). Commission is strictly negotiable.

    Bookmark   March 25, 2009 at 11:27PM
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arielitas_mom

Seven percent is excessive - around here, after negotiation, it's not unusual for the commission to be as low as four percent (2.5 for the buyer's agent; 1.5 for the seller's). Standard is probably 6. 7 is way out of line.

    Bookmark   March 26, 2009 at 1:34AM
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jojoco

In my area, commission goes from 6-7. So yes, 7 can be standard. But keep in mind what mpinto said, commission is strictly negotiable. You can ask for less, and if they say other agents won't show it at less, you can tell them to fill in the mLS so that the selling agent gets 3.5 and yours gets 2.5. What services are they giving you for 7?

Jo (a realtor)

    Bookmark   March 26, 2009 at 7:03AM
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mary_md7

In my area, 6% is standard for a full-service listing. I think 7% is excessive.

    Bookmark   March 26, 2009 at 7:41AM
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ncrealestateguy

Just like most things... you get what you pay for.
The same is usually true here too.

    Bookmark   March 26, 2009 at 8:25AM
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karen_76

I am in Indy also, and I'm pretty sure most agents use 6%. At least all the ones I know (ReMax, Century 21).

    Bookmark   March 26, 2009 at 7:16PM
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bobandmel

I know that it will be a little less than 7% because we are over 300K, but I don't know the number yet.

FC Tucker is the top RE agency here....by FAR. They exceed everyone's numbers.

I am very comfortable with the agency and the agent. Just not so comfortable with the commission.

She is going to have a realtor's open house, market on all the websites (gave me a list of them), she goes after any agent that has a showing and doesn't let up until she gets feedback, regular open house if we want it, "coming soon" sign the week prior to hitting the market, video online, professional pics, video disk here at the home, little 'card markers' throughout home identifying little features of the home that otherwise may be overlooked. And, of course, color brochures with all of the stats.

She stated in writing that if we are at any time not happy with her services, we can cancel the contract right then and there.

She will market us at the weekly meetings (along with the realtor open house and luncheon at our house), market us to the top 100 producers in the area. We'll be in the magazine they put out as well.

This is all I can think of at the moment. I know that we have the best agent for US....I feel good that she will do a good job...detail oriented and professional, yet approachable. She will also pick up the slack of the buyer's agent if he/she is not a very good one just so we get the deal done.

I just know that we ran the numbers and it is scaring the daylights out of me. On top of that number, we are closing next week on our construction loan for our new home and we have to pay HUGE cap. gains this year in taxes for property that we sold last year. I'm just kind of freaking out.

Thank you for all of the feedback!!

    Bookmark   March 26, 2009 at 7:44PM
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susana_2006

In LA for my mom's house, I paid 5.5% -- I think it was standard. I think that 7% is very high on 300,00+ home.

If I were going to go that high, I would definitely expect that they moved the house in 40 days or less to warrant that high a commission. Maybe you could structure a contract that would pay a higher commission for a quick sale and less comission if the sale takes longer -- at least it would give the agent some motivation.
Good luck
Susan

    Bookmark   March 26, 2009 at 8:23PM
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blueheron

Around here (SE Pennsylvania) the standard commission is 6%. 7% seems excessive.

    Bookmark   March 26, 2009 at 8:36PM
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xamsx

bobandmel: She stated in writing that if we are at any time not happy with her services, we can cancel the contract right then and there.

You don't actually have a contract with her unless she is a broker. Your contract is with the broker she works for. Check the language to be certain the brokerage will let you out of the contract if you are unhappy with her services, otherwise the brokerage will just assign another agent to be your Realtor if you are unhappy with the agent you signed with.

    Bookmark   March 26, 2009 at 9:59PM
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katclaws_mo

In my area 7% is standard, but many agents wiggle it down to 6%, and lower with their broker's approval, especially in this economy.

    Bookmark   March 27, 2009 at 12:27AM
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jojoco

xamsx,
In NY state, the broker has to sign the contract. I also cross out the line saying they can't get out before expiration, and my broker signs off on it.

Jo

    Bookmark   March 27, 2009 at 7:06AM
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berniek

"Maybe you could structure a contract that would pay a higher commission for a quick sale and less comission if the sale takes longer -- at least it would give the agent some motivation."

Depending on your motivation and time frame to sell, above advice is excellent and the agent might go along with that.

    Bookmark   March 27, 2009 at 1:10PM
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sweet_tea

Tell her you will list with them for 6%. Then keep mum(keeping mum is important, because you can talk yourself into 6.75 or 7% easily if you don't keep mum. Rather, pass the ball into their court after your 6% offer).

Or, take the listing contract and write in 6% and sign and give it to them (as long as everything else is good with you.).

Then the ball is in their court.

But just stay mum and focus on getting the 6%. They might counter you at 6.5%. You can always counter at 6.1% or stick with paying 6%. I would do that if I was in your shoes. But if they counter immediately, I would just say I will think about it and get back to you(and then wait until next day or so, and then you can always go back at 6% again, or very close to it.). trust me, they want your listing badly.

They will most likely agree to 6%. If they don't, then you can always tell them you will check other agencies and get back to them.

Don't tell them that you know they are the best and the others aren't comparable. They will stick to 7% if they know you already chose them regardless of going down to the 6% commission. This is why you need to stay mum once you offer the 6%.

    Bookmark   March 27, 2009 at 1:46PM
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bobandmel

Thank you to EVERYONE for all of the feedback!

I will check on the contract if we are just able to get out of it with her but they assign a new agent. I really do not think this is going to be an issue for us, but you NEVER know!

I will also talk to H about the 6%.

I also received an estimated proceeds form. I'm going to start a new thread.

Melissa

    Bookmark   March 27, 2009 at 4:02PM
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