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Realtor commissions - how much and how divided?
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Anonymous
| What percentage commission is a seller's agent getting nowadays? Does it make a difference if the house is in a desirable, close in neighborhood (so presumably it will sell quicker, thereby taking less of the realtor's time). Also, if you want the realtor to handle the sale of your current home and purchase of a new home, do they cut you a break on their commission on each side? Last, are sellers (the actual seller, not the realtor) covering any of their buyer's realtor commission or closing costs nowadays? Thanks - it has been a long time since I bought or sold a house, and I am trying to get a handle on all of the commissions, fees and closing costs I will incur. I live in MD. |
Anonymous
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We just bought and sold a house in a close-in desirable area. The standard commission is 6% with 3 each to buyer's and seller's agent. Most agents will reduce the commission to 5% with 2.5 going to each, especially if you use the same agent to buy and sell. At closing, the seller has to pay a transfer tax, which is 1.45% of the contract price in DC (I believe it is the same in MD) on top of the realtor's commission. The buyer has to pay the same percentage in recordation tax, plus other closing costs (your lender can give you an estimate of these costs).
Since this is a buyer's market, you may be asked to help cover some or all of the buyer's closing costs. If you live in an area where houses sell fast for close to asking price, it will be less likely. When we listed our house, we had got multiple offers, including two that asked us to cover the buyer's closing costs. Because we had a more attractive offer, we were able to turn these requests down, however, if these had been our only offers, we probably would have had pay at least part of the closing costs. |
Anonymous
| Thanks for your reply. So to confirm I understand, you paid 2.5% of the sale price on your prior home as the seller in that deal, and 2.5% of the purchase price of your new home as the buyer in that deal, and the respective buyer/seller in the unrelated deals paid each of the other portions of the commissions. Did I understand that right? Oh, and I guess whether you paid 2.5 or 3% on the purchase deal depended on what the other party negotiated with it's agent, right? Thanks for your help. |
Anonymous
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Seller pays all commissions. Well, they do, but it obviously affects the price.
Example: House sells for 100,000. Commission total is 5%, half to buyer's agent, half to sellers agent. Seller nets 95,000. The 5,000 total commission (5%) comes out of the seller's share. The buyer brings to the table his/her down payment and closing costs, but not $2500 to cover his agent's half of the commission. Seller can cover some closing costs to sweeten the pot for the buyer, but it depends on the desirability of the property and other offers. But obviously, the cost of the deal is baked into a house's price. |
Anonymous
| The seller sets the commission level - i.e., the seller's contract with the agent says the commission is 6% or 5% or whatever. The buyer does not set a commission level with his/her agent. |
Anonymous
True, but you can negotiate a kick-back from your agent when you buy a house. In our case we had done all the work, found the house ourselves etc, so we got an agent just to handle the paperwork and in exchange he gave us back half of his 3%. |
Anonymous
10:06 here - I'd never heard of this but it's a great idea (if you can get the agent to go for it). |
Anonymous
| If you don't need help finding a house, you can seriously get a lawyer to do everything your agent would do for you in terms of paperwork and negotiating for like 1000 bucks. Seriously. |
Anonymous
| We just bought a house in January. Seller paid all closing costs and our realtor paid us 1% of the purchase cost. Sweet deal for us. |
Anonymous
How does this help the buyer? The seller's agent would keep the entier 6% commission and the buyer would have to pay an atty $1000. Normally, the buyer doesnt pay the agent anything. |
Anonymous
We tried this once, but the agent wouldnt go for it. Different market at the time though. |
Anonymous
| How did your agent pay you the commission back? In cash? Then isn't it taxed? |
Anonymous
There are different ways you could structure it. e.g. get them to reduce the price by x. and give the realtor 1.5percent commission instead of 3% and there are no tax implications. |
Anonymous
No. You negotiate that you can reduce your offer by 3% with the seller since there is no buyer's agent, that will save you more than the $1000 for an attorney. The seller's agent doesn't get to keep 6% just because there's no buyers agent unless the parties involved are stupid. |
Anonymous
Yes they do unless the listing agreement says otherwise. You sound like a cheap pain in the ass buyer. Why not allow agents to be paid their commission? Do people try and lower your rate at every turn? FWIW I am not an agent. |