Any current status on Real Estate Commissions ?

FiveDriver

FiveDriver

Full time employment: Posting here.
Joined
May 30, 2015
Messages
738
Location
Charleston, SC
Has anybody been thru the Home Sale process since the RE Commissions changed ?

Last I heard, the Realtors want separate Contracts for the Listing Agent and for the Buyer's Agent. The starting point for these commissions is 2.8% for each side !! Buyer's Agents are pushing for their fees to be paid out of Sale Proceeds, and not directly paid by the Buyer.

So, how did we go from 5% total commission being too much.....to 5.6% being fair ??

Full Disclosure -- We are not thinking of moving at this time. We love this Home and this neighborhood. It's a premium location with a pond and golf course. Similar houses were selling in one weekend with no Open House showing, and marketed with Cell Phone Photos on MLS.
5% of $500,000 is 25K. That's a little excessive, IMO.

Some alternate sites to the sacred MLS are Redfin and Zillow. I'm sure Buyers know that there are other sites to search Houses For Sale. I can easily post digital photos just as well as any Realtor can. I know a local RE Closing Attorney Office that will draw up a Standard Contract of Sale, complete with Appraisal/Inspection Clause and Escalation Addendum.....for under $1500 bucks.

Has anybody experienced this new world of Real Estate and the new Commission structure ?
 
Not yet although there are tons of podcasts on the subject, mostly by real estate agents.

In my neck of the woods typically the contacts of sale are drawn up by the seller's real estate attorney and then bounce back and forth between the seller's attorney and buyer's attorney while some of the language and details are negotiated.
 
freedomatlast said:
Sold our place by ourselves in 2020 through Zillow. No realtors needed or wanted. Very smooth transaction with substantial savings. Never plan to use a realtor in the future.
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We bought our first 2 homes as a FSBO, saved a good chunk of money at the time. That savings helped us get into a 15 year mortgage with no PMI. That was real money to us when we were starting out.

Our current house was bought from a distance, with the help of a local Realtor who sent us weekly New Listings for almost a year. By the time we came down to Charleston.....we knew that Market Area well. I didn't mind paying the 2.5% that Realtor.....there's a hundred reasons that remote deal could have gone sideways.
This new Fee Structure just seems like Money Grab to me.

Any Cost to publish digital photos on Zillow ??
Did you feel you got enough traffic on Zillow ??
How was the RE Market in your area in 2020 ??
Did you use an online 'Standard RE Contract' or did you have your RE Attorney provide the Contract of Sale ??
 
Any Cost to publish digital photos on Zillow ?? No. You can publish free videos too.
Did you feel you got enough traffic on Zillow ?? Yes, most definitely
How was the RE Market in your area in 2020 ?? In the midst of COVID, RE market was kind of slow at the time
Did you use an online 'Standard RE Contract' Yes, the same one the realtors use, easily found online.
 
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We bought a place with our daughter a few months ago (she lives in it) so we talked to several agents in the SF Bay Area about how they're handling it and got the same answer from multiple different agencies. In that area agents will no longer represent the buyer and seller, though it's not a problem to use a buyer's agent and a seller's agent who both work for the same agency.

If you find a place by attending open houses, as we did, the listing agent will refer you to a buyer's agent if you don't already have one. You sign a contract with the buyer's agent agreeing to cover their commission if the seller won't pay it. For both of the places where we got to the point of speaking with a buyer's agent, the agent we were using was quick to inform us that she had spoken with the listing agent and been assured that the seller had already agreed to cover their commission.

So in the end the seller paid the 5% commission and the two agents split it. As a buyer it was exactly the same as before the legal settlement.
 
I have the same question… if I understand the new change …. I should be able to find a house on my own through realtor.com and make an appointment to see the house. The seller pays their seller realtor fees and my realtor fees are zero. Effectively saving the seller 3% (vs the old way when the seller used to pay the buyer’s agent fees) - which should theoretically be passed down to me/the buyer via a reduction in home sales price.
 
Our approach in recently listing our house for sale was to indicate the buyer’s realtor fee was negotiable. At the end of the day, what mattered most to us was how much we would walk away with at the end of the day. We figured the 2.5% commission (we wouldn’t pay more than what our realtor charged) would go to the buyer’s agent one way or the other - either as a commission on the sales price or factored into what a buyer would offer. With multiple offers, you just need to compare each offer’s net sales amount.
 
It seems like holding back on the buyer's agent's commission around here is making it difficult to sell houses.

Of course we are flooded with homes for sale in this area, making the situation even worse. Buyer's agents are reluctant to show a house where the seller is not advertising paying for the buyer's agent.
 
Earl E Retyre said:
I have the same question… if I understand the new change …. I should be able to find a house on my own through realtor.com and make an appointment to see the house. The seller pays their seller realtor fees and my realtor fees are zero. Effectively saving the seller 3% (vs the old way when the seller used to pay the buyer’s agent fees) - which should theoretically be passed down to me/the buyer via a reduction in home sales price.
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I believe in this case, as a Buyer, you would want to control the Contract presented to the Sellers. Once you two agree on a Price -- you as Buyer want to dictate the resolution to Appraisal and Inspection issues that arise.

This is why the Buyer typically chooses the Attorney for the official Closing.
 
GoBears said:
Our approach in recently listing our house for sale was to indicate the buyer’s realtor fee was negotiable. At the end of the day, what mattered most to us was how much we would walk away with at the end of the day. We figured the 2.5% commission (we wouldn’t pay more than what our realtor charged) would go to the buyer’s agent one way or the other - either as a commission on the sales price or factored into what a buyer would offer. With multiple offers, you just need to compare each offer’s net sales amount.
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Did your Listing Agent agree to the concept of splitting the Fee ??
Where did the actual dollars to the Buyer's Agent come from ??

Also, with multiple offers....how did you screen for Qualified Buyers ??
Did a Buyer's Agent bring Pre-Approved Buyers in your price point ?
 
aja8888 said:
It seems like holding back on the buyer's agent's commission around here is making it difficult to sell houses.

Of course we are flooded with homes for sale in this area, making the situation even worse. Buyer's agents are reluctant to show a house where the seller is not advertising paying for the buyer's agent.
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To that I would say that the Buyer's Agent should negotiate their Fee directly with their Buyer -- before they taxi them around the Market Area.

In this new Commission structure, Buyer's Agents are instructed to get something in writing before any customer gets into their Benz.
"I will get you access to any House in the county over the next 60 days for the following compensation."
Might not even be a percentage of Sales Price. Might be a Flat Fee from Buyer.
 
For us, our realtor was quite valuable when we sold our house five years ago. ( In the middle of Covid)

Long story, but he wrote the contract/offer such that a buyer's home inspection was "for informational purposes only", essentially "as is, take it or leave it". Selling a 125 year old house as an amateur, I never would have thought of that. The house wasn't bad but had a few flaws that an inspection could've lowered the sell price by a $100k or so. The buyers did do an inspection but weren't able to use it as a negotiation point.

As it was, the house sold in 45 minutes, $50k over our already aggressive asking price. He also qualified the buyers so that we/he didn't have to deal with people wasting time. We were swimming off our boat when he called with the offer.
 
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FiveDriver said:
To that I would say that the Buyer's Agent should negotiate their Fee directly with their Buyer -- before they taxi them around the Market Area.

In this new Commission structure, Buyer's Agents are instructed to get something in writing before any customer gets into their Benz.
"I will get you access to any House in the county over the next 60 days for the following compensation."
Might not even be a percentage of Sales Price. Might be a Flat Fee from Buyer.
Click to expand...
That sounds great, but a lot of people buying houses really want their agent to be paid out of the sales price like the good old days and don't want to sign anything like that. Right now, it's a Buyer's Market around here due to too much supply and sellers are advertising paying the buyer's brokers commission.
 
FiveDriver said:
Did your Listing Agent agree to the concept of splitting the Fee ??
Where did the actual dollars to the Buyer's Agent come from ??

Also, with multiple offers....how did you screen for Qualified Buyers ??
Did a Buyer's Agent bring Pre-Approved Buyers in your price point ?
Click to expand...
The listing agent’s commission was specified in her contract. The buyers’ agent’s commission was specified in their offer so there technically was not a splitting of the commission. We didn’t get to the point of having multiple offers. The buyers increased their initial offer and we countered at our number (above asking) and they accepted. They were pre-approved for financing and our realtor knew their mortgage person and verified the information.
 
I think this will take some time to sort out. In our market I am starting to see billboards offering reduced fees and billboards offering fixed prices for services.

Re buyers' agent screening properties based on how much the agent will be paid, I think a few lawsuits re breach of fiduciary duty will clean that up quite neatly.
 
Just sold a condo last month. Signed listing agreement with a 3% commission to my agent.

First offer came in below asking and also asked me to pay commission of 3% to buyers agent. Nope!!! Countered that I would pay 2% to buyers agent and countered up at the full appraised value.

Counter offer accepted. Don’t know if the buyer paid anything additional from their pocket to their agent to make up for the reduction from 3 to 2% in my counter offer.

So on my end I paid 5% Commission (3% to my listing agent and 2% to buyers agent) and closed at the appraised value.
 
Just did sell and buy transactions. I paid 5% on the sale, split between my listing agent and the buyer's agent. On the purchase, I had signed a representation agreement early in my house hunting, and the builder/seller paid the 2.5% fee.

Other than the legal forms, wasn't any different than other transactions I had done under the old rules.
 
I am hopeful that someone will go through this game for me - after I'm gone. No interest in buying or selling. But I sure did resent paying such a huge fee to the realtor last time we sold. YMMV
 
We bought a home in March 2024 and sold a home in June 2024. In the March transaction the seller paid 6% commission. In the June transaction the seller paid 5.5% commission. In both cases split between our agent and the other agent evenly or close to evenly (I didn't bother to check).

Other than some jawboning, not much really changed in my experiences last year.

On the buy side, the contract that we had with our agent did have a provision that we would pay if the seller refused. I objected to that provision. The realtor said it never happens I responded that since it never happens we can safely stroke it out and that is what we did.
 
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I am currently going through this right now. I worked out a deal for my seller agent to get 1.65 percent since what she will do to market and sell my $800k home is what she would do for a $350k home. I also stated that I wanted to say for the buyers agent “ up to 2.5%”. Meaning if I get an offer at or above list, I’m inclined to pay the full rate. However, if you bring a lowball offer, it will affect how much I’m willing to pay out. My agent doesn’t like that wording and we are still discussing it. :)
 
Yeah, I've always wondered about some win-win structure for real estate commissions where if you bring me a ho-hum price they you get reasonably compensated for your time but not much more than that but if you get more then I share some of it with you.

So for example, lets say we all agree that a "fair" price would be 100. If it sells for 90 it is an easy sale and not much effort by the agent so only 2% commission. Anything over 90k and the agent gets 1/3 of the excess and I keep 2/3... so something like this:

90k.... $1,800.... 2% of sales price... seller yields $88,200
95k.....$3,467... 3.6% of sales price... seller yields $91,533
100k.. $5,133... 5.1% of sales price... seller yields $94,867
110k... $8,467... 7.7% of sales price... seller yields $101,533
 
I think something like that makes sense.

I would start, though, with fees for services. $$ for MLS listing and monitoring, $ per showing, $ for closing services, etc. This makes it easier to look at work involved vs price asked and effort can be scaled to suit the seller and agent. Any system, of course, can be gamed so that would take some thought.

After fees for services, a reward system for getting a good price and a short listing period might work.
 
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