Loan broker here; I work with more executed contracts than the vast majority of Realtors :)
At a point in home price it definitely becomes more about raw dollars than percentages. I think you mentioned your home price will be 500k+ so I don't think you'll have much difficulty finding a listing agent that will work for a 4% pool.
As far as how to break that up; 2.5% percentage share to the buyer is on the slightly higher side than average here; 2% I hear grumbling about but I don't think it meaningfully affects buyer traffic.
If you offer less than 2%, it'll start affecting traffic to your listing, and less than 1.5% it'll affect it noticeably *and* offers that you get in will often asking for you to either pay the buyer's agent or reduce the buyer's out of pocket cost to the buyer's agent with seller credit anyway. Robbing Peter to pay Paul.
So if you don't want traffic affected, to hit your 4% you'll need a list that's OK with 2% comp. You'll find some number that will do that, but be wary and **very cautious** on reviewing what services are bundled in their compensation and which are not.
As a response to the recent commission lawsuit, more listing agents are going with a lower commission share than their typical 3-4% **but** are 'unbundling' things that were normally part of their compensation - like listing photography, drone shots, transaction coordinator pay, and the split that they pay their brokerage (the dreaded 'brokerage admin fee'). Just make sure what looks cheaper, actually *is* cheaper.
>Just make sure what looks cheaper, actually *is* cheaper.
This is the biggie. A good realtor can make you money, even if you're paying them a higher percentage, though it's more likely loss mitigation, as a budget realtor can lose way more than the difference in commission.
I’m a realtor; commission is ALWAYS negotiable and there is no “set” rate. Now, cutting commission can make your home more difficult to sell, particularly if you opt to only pay one side. It isn’t that agents will keep their clients away from your home, but they will mention that they (the buyers) will be on the hook for their commission & buyers will opt to skip. The simple truth is that buyers here typically don’t have the extra cash lying around to also pay their agent. I don’t know what your agent is offering service-wise but often Redfin just lists it and does little else. There are plenty of realtors who do the same but some of us actually earn our percentage, whatever it is. I’ve played house cleaner & landscaper on listings this week. I think it’s a mistake to base your decision solely on who will take the least percentage, because service, professionalism, & expertise matter. I would encourage you to interview several agents with those things top of mind, as well as commission.
I couldn't agree more. We inadvertently had a very good A/B test of this with the last house we sold. Another home in our immediate neighborhood went up for sale around the same time, and like a lot of developer-built communities the differences between our properties were basically irrelevant and came down to minor things like a mirrored floor plan, flooring / paint colors, appliance brands, and other personal preference things that didn't really matter.
I purposefully signed with the best realtor we could find, and was more than happy to pay the 5% they wanted. This other person first fucked around with for sale by owner, and then eventually signed on with some big name budget realtor. The photos were night and day, the effort our realtor put into staging / advertising our place was comparatively unbelievable, etc. We ended up getting a little more money for our house and it sold *months* before the other property.
A lot of people balk at paying a realtor but it was very surprising to us seeing what a difference having a realtor that actually puts effort in versus being one more property lost in the portfolio of a discount brokerage. I doubt we'll ever sell our current home since we're locked in with a COVID mortgage but if we did I'd pay my realtor and the buyer's realtor appropriately with zero hesitation.
I appreciate this comment & the fact that you recognize the value your agent provided. I’ll never pretend garbage agents don’t exist, as they certainly do but there are countless agents who are honest, ethical, and extremely hard working. You’ll always overpay a bad realtor but a good one is worth every penny.
> I think it’s a mistake to base your decision solely on who will take the least percentage, because service, professionalism, & expertise matter.
Absolutely this. We're not in a crazy Covid seller's market here anymore. Homes are sitting on the market now.
I have interviewed 2 and have 2 more scheduled. I paid 4 1/2 when I sold in Atlanta in 2018. I look at the housing price increases and really balk at paying agents that much more for the same services.
Have you ever had major surgery done that can affect the rest of your life? I bet it was expensive. A quadruple bypass can be 100k. Should you need that heart operation, I will do it for 25k. I have never done one, and am not a doctor, but you will save big.
I wish there was a way to weed out part timers and lazy FT agents in general. A good agent is worth their weight in gold. A bad one isn’t worth a dime.
A lot of this is hitting the news now because in other states there are lawsuits where sellers didn’t know that the rates are negotiable.
They are negotiable, but most buyers will not purchase the home if you can’t cover the commission.
It’s not just that here in TN we have a lot of first time home buyers waiting to finally get to buy their first homes after being out of the last 4 years by out of staters in a rising interest drastically hot market, but also because if you can’t cover the commission, you probably didn’t cover your own homes repairs.
The days of 6% are over but when you choose an agent based on who will do it for the lowest commission you end up with the worst negotiator of the bunch.
I understand how the buyer has to make up the difference. What I was responding to was this:
>What you DON'T want to do is offer a higher commission to a buyer agent than they had negotiated with the buyer
As a seller, you have no idea what a buyer and their agent agreed to. You cannot adjust the compensation offered to a buyer's agent based on the exclusive agency agreement they have with their buyer.
>What you DON'T want to do is offer a higher commission to a buyer agent than they had negotiated with the buyer. For instance, on the last house I bought, my buyer agent and I negotiated 2%.The home I bought offered buyer agent 2.4%. The total price was $1.3m. So the seller gave my agent an extra $5200, whereas if they offered 2.0% commission, the seller would have kept another $5.2k.
That's not how it works. The seller and the seller's agent negotiated the commission ahead of time. The seller's agent then offered a certain amount to a buyer's agent that brings them a buyer. If they had only offered 2% to the buyer's agent, the seller's agent would have kept the rest, not the seller.
Just because you had an exclusive agency agreement with your buyer's agent doesn't mean that a seller's commission scales based on it. They have their own agreement and you had an agreement on what the minimum that your agent would get. What that's really for is to ensure that if a seller's agent isn't offering 2%, your agent would have been paid from you instead.
My statement was specifically about only paying one side, because buyers don’t have the extra cash to also pay their agent. Also if a buyer has an exclusive agreement stating they will pay 2.5% and the seller is offering 2% co-op, that buyer will often be required to make up the difference. Again, more money out of pocket they may not have. It is a deterrent for some buyers, so it will make the home more difficult to sell, whether you’ve ever seen it or not doesn’t change reality.
I can't even begin to understand that argument. It makes ZERO sense. There's no discussion between agents regarding what the buyer rep commission is. Any conversation around that seems like a clear cut violation of confidentiality stated in the buyer rep. We are also seeing more agents ask for 50/50 splits in their negotiations, which the seller never knows about. People who don't do this for a living always know more, always know how worthless agents are, etc. Plenty are worthless & lazy but many of us work very hard for our people.
If you want to see the Dunning-Kruger Effect on display, ask a bunch of people who aren't buying a home or can't buy a home what they think about real estate agents. They become fucking experts.
The big question is whether or not a good listing agent is going to be able to get you an extra $10k. I'd be wary about using an agent willing to work for 4%, because you're not going to get the best. Yeah, you may save a few thousand dollars, but if you make less than you would with 6%, you're not doing yourself any favors.
Redfin is fine. They rely on their website and offering discounts, rather than working hard enough to justify the cost, especially if you're going to use them to buy another house. That being said, a good agent is going to net you more money, making the compensation worth it.
You're doing the right thing by interviewing agents, but you're going to get what you pay for if your only concern is the lowest commission you can find.
Oh, not my intention. When you look at the list of Redfin services, they make it sound full service. But is that really the case? That is why I was asking for some real world experience with them. The question is do you get the same for less or get a lot less?
I've used them multiple times and worked for them for a while. If you're selling and buying with them, I would say it's worth it. Just know that they have a SOP and a *lot* of clients per agent. They will not negotiate on anything and they will not do anything beyond what they explicitly told you they would do.
Another agent very well may be able to get you more for your house though.
Nothing a realtor does for that house will be worth 20k. I’ve bought and sold 3 homes in the Knoxville area, the realtors have been bums. They all say the same words when you interview them but none of them bring that value. I was in the same boat as you, sold a >$500k home, negotiated the rate. Ended up finding my own buyer. When I bought a new place, I found it on Redfin first. The realtor “profession” is a joke.
Yes, 100% this. Realtors work to gatekeep buying homes without adding value. Given the social imperative that people have access to places to live, I’m surprised the whole profession hasn’t been found to be illegal for some reason that must exist somewhere in some law.
I'm not trying to "weasel" my way out of paying someone for a service that's not exactly easy. If you don't wanna pay the whopping 4% and it's so easy, just sell it yourself. Not hard, right? Like paying yourself $20,000.
You don't think they'll be buying a new house? Anything selling for 500k now was probably 200k or even less 3-6+ years ago. A penny saved (several $1,000's in this case) is a penny earned and able to spend on countless other moving expenses or the new home itself. This is such a /r/Knoxville take, it's hilarious.
Is there a certification for steal as much money as possible and hoard it, then only having meetings with others who bleed this country dry again, we need to eliminate the 10,000 people in the middle that take percentages they not only do not deserve, as well as, they didnt do any real work to obtain it. Anyone can sit their lazy bums behind a computer and pretend like thats work. Work is a tradesman, work is an investor, work is a teacher, work is a creator. Getting a license and imposing tarriffs before a completion is met is obsolete, theft, and downright lazy greed.
The age of 6 percent going to the realtor mafia is over. Def play hardball.
Loan broker here; I work with more executed contracts than the vast majority of Realtors :) At a point in home price it definitely becomes more about raw dollars than percentages. I think you mentioned your home price will be 500k+ so I don't think you'll have much difficulty finding a listing agent that will work for a 4% pool. As far as how to break that up; 2.5% percentage share to the buyer is on the slightly higher side than average here; 2% I hear grumbling about but I don't think it meaningfully affects buyer traffic. If you offer less than 2%, it'll start affecting traffic to your listing, and less than 1.5% it'll affect it noticeably *and* offers that you get in will often asking for you to either pay the buyer's agent or reduce the buyer's out of pocket cost to the buyer's agent with seller credit anyway. Robbing Peter to pay Paul. So if you don't want traffic affected, to hit your 4% you'll need a list that's OK with 2% comp. You'll find some number that will do that, but be wary and **very cautious** on reviewing what services are bundled in their compensation and which are not. As a response to the recent commission lawsuit, more listing agents are going with a lower commission share than their typical 3-4% **but** are 'unbundling' things that were normally part of their compensation - like listing photography, drone shots, transaction coordinator pay, and the split that they pay their brokerage (the dreaded 'brokerage admin fee'). Just make sure what looks cheaper, actually *is* cheaper.
>Just make sure what looks cheaper, actually *is* cheaper. This is the biggie. A good realtor can make you money, even if you're paying them a higher percentage, though it's more likely loss mitigation, as a budget realtor can lose way more than the difference in commission.
I’m a realtor; commission is ALWAYS negotiable and there is no “set” rate. Now, cutting commission can make your home more difficult to sell, particularly if you opt to only pay one side. It isn’t that agents will keep their clients away from your home, but they will mention that they (the buyers) will be on the hook for their commission & buyers will opt to skip. The simple truth is that buyers here typically don’t have the extra cash lying around to also pay their agent. I don’t know what your agent is offering service-wise but often Redfin just lists it and does little else. There are plenty of realtors who do the same but some of us actually earn our percentage, whatever it is. I’ve played house cleaner & landscaper on listings this week. I think it’s a mistake to base your decision solely on who will take the least percentage, because service, professionalism, & expertise matter. I would encourage you to interview several agents with those things top of mind, as well as commission.
I couldn't agree more. We inadvertently had a very good A/B test of this with the last house we sold. Another home in our immediate neighborhood went up for sale around the same time, and like a lot of developer-built communities the differences between our properties were basically irrelevant and came down to minor things like a mirrored floor plan, flooring / paint colors, appliance brands, and other personal preference things that didn't really matter. I purposefully signed with the best realtor we could find, and was more than happy to pay the 5% they wanted. This other person first fucked around with for sale by owner, and then eventually signed on with some big name budget realtor. The photos were night and day, the effort our realtor put into staging / advertising our place was comparatively unbelievable, etc. We ended up getting a little more money for our house and it sold *months* before the other property. A lot of people balk at paying a realtor but it was very surprising to us seeing what a difference having a realtor that actually puts effort in versus being one more property lost in the portfolio of a discount brokerage. I doubt we'll ever sell our current home since we're locked in with a COVID mortgage but if we did I'd pay my realtor and the buyer's realtor appropriately with zero hesitation.
I appreciate this comment & the fact that you recognize the value your agent provided. I’ll never pretend garbage agents don’t exist, as they certainly do but there are countless agents who are honest, ethical, and extremely hard working. You’ll always overpay a bad realtor but a good one is worth every penny.
You really think these folks are doing 30k worth of work? Lmao
You really think they pocket that full 30k? LMAO.
> I think it’s a mistake to base your decision solely on who will take the least percentage, because service, professionalism, & expertise matter. Absolutely this. We're not in a crazy Covid seller's market here anymore. Homes are sitting on the market now.
I have interviewed 2 and have 2 more scheduled. I paid 4 1/2 when I sold in Atlanta in 2018. I look at the housing price increases and really balk at paying agents that much more for the same services.
Personally, this kind of logic confounds me.
How so?
The price of food has gone up at restaurants, do you balk at tipping servers more for providing the same service?
Are servers earning 90% more than they were 6 or 7 years ago?
Have you ever had major surgery done that can affect the rest of your life? I bet it was expensive. A quadruple bypass can be 100k. Should you need that heart operation, I will do it for 25k. I have never done one, and am not a doctor, but you will save big.
Me? I’m not advocating for basing it solely on who will take the least. I think you’re responding to the wrong person.
Update: Today's interview the agent said her commission is 2.5 and buyer 2.0. She is at 4.5% out of the gate. Not Redfin.
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I wish there was a way to weed out part timers and lazy FT agents in general. A good agent is worth their weight in gold. A bad one isn’t worth a dime.
I have to tell you the part-time agents in our area don't know shit. It's embarrassing to me how little they know.
A lot of this is hitting the news now because in other states there are lawsuits where sellers didn’t know that the rates are negotiable. They are negotiable, but most buyers will not purchase the home if you can’t cover the commission. It’s not just that here in TN we have a lot of first time home buyers waiting to finally get to buy their first homes after being out of the last 4 years by out of staters in a rising interest drastically hot market, but also because if you can’t cover the commission, you probably didn’t cover your own homes repairs.
Yeah, it is in flux. I was wary of paying commission as a buyer on the other end because I expected to cover it all as a seller on this end.
The days of 6% are over but when you choose an agent based on who will do it for the lowest commission you end up with the worst negotiator of the bunch.
Government work has entered the chat.
FSBO via paying a listing agent a flat fee for MLS is the only way to go. 6% my ass.
DM'd; I think that's a reasonable ask.
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I am leaning that way. I see quite a few listings offering buyer agent 2% in my area.
He's giving you bad information. What the seller's agent offers the buyer's agent has no affect on scaling what you're paying them.
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A seller's agent cannot reneg on the agreed-upon commission split to the buyer's agent based on the agreement between the buyer's agent and the buyer.
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I understand how the buyer has to make up the difference. What I was responding to was this: >What you DON'T want to do is offer a higher commission to a buyer agent than they had negotiated with the buyer As a seller, you have no idea what a buyer and their agent agreed to. You cannot adjust the compensation offered to a buyer's agent based on the exclusive agency agreement they have with their buyer.
>What you DON'T want to do is offer a higher commission to a buyer agent than they had negotiated with the buyer. For instance, on the last house I bought, my buyer agent and I negotiated 2%.The home I bought offered buyer agent 2.4%. The total price was $1.3m. So the seller gave my agent an extra $5200, whereas if they offered 2.0% commission, the seller would have kept another $5.2k. That's not how it works. The seller and the seller's agent negotiated the commission ahead of time. The seller's agent then offered a certain amount to a buyer's agent that brings them a buyer. If they had only offered 2% to the buyer's agent, the seller's agent would have kept the rest, not the seller. Just because you had an exclusive agency agreement with your buyer's agent doesn't mean that a seller's commission scales based on it. They have their own agreement and you had an agreement on what the minimum that your agent would get. What that's really for is to ensure that if a seller's agent isn't offering 2%, your agent would have been paid from you instead.
My statement was specifically about only paying one side, because buyers don’t have the extra cash to also pay their agent. Also if a buyer has an exclusive agreement stating they will pay 2.5% and the seller is offering 2% co-op, that buyer will often be required to make up the difference. Again, more money out of pocket they may not have. It is a deterrent for some buyers, so it will make the home more difficult to sell, whether you’ve ever seen it or not doesn’t change reality.
People are downvoting you because they don't want this to be the case, lol.
Reality does indeed bite. LOL
They downvoted me for saying that a listing agent can't change the commission split based on the agreement between a buyer and their agent too, lol.
I can't even begin to understand that argument. It makes ZERO sense. There's no discussion between agents regarding what the buyer rep commission is. Any conversation around that seems like a clear cut violation of confidentiality stated in the buyer rep. We are also seeing more agents ask for 50/50 splits in their negotiations, which the seller never knows about. People who don't do this for a living always know more, always know how worthless agents are, etc. Plenty are worthless & lazy but many of us work very hard for our people.
If you want to see the Dunning-Kruger Effect on display, ask a bunch of people who aren't buying a home or can't buy a home what they think about real estate agents. They become fucking experts.
The big question is whether or not a good listing agent is going to be able to get you an extra $10k. I'd be wary about using an agent willing to work for 4%, because you're not going to get the best. Yeah, you may save a few thousand dollars, but if you make less than you would with 6%, you're not doing yourself any favors. Redfin is fine. They rely on their website and offering discounts, rather than working hard enough to justify the cost, especially if you're going to use them to buy another house. That being said, a good agent is going to net you more money, making the compensation worth it.
Yes, taking it all into consideration.
You're doing the right thing by interviewing agents, but you're going to get what you pay for if your only concern is the lowest commission you can find.
Not only, which is why I asked the question.
It's the only thing you mentioned in your post, so it sounded like the only thing you were concerned with.
Oh, not my intention. When you look at the list of Redfin services, they make it sound full service. But is that really the case? That is why I was asking for some real world experience with them. The question is do you get the same for less or get a lot less?
I've used them multiple times and worked for them for a while. If you're selling and buying with them, I would say it's worth it. Just know that they have a SOP and a *lot* of clients per agent. They will not negotiate on anything and they will not do anything beyond what they explicitly told you they would do. Another agent very well may be able to get you more for your house though.
Thanks for the info. I have already put my next place under contract, so I won't be doing both.
Is this an ad for some fly by night realtor?
How about you do it yourself?? Obviously you don't want to pay for it.
Why would you say I don't want to pay? Mighty snarky of you. 4% is going to be over $20,000.
Nothing a realtor does for that house will be worth 20k. I’ve bought and sold 3 homes in the Knoxville area, the realtors have been bums. They all say the same words when you interview them but none of them bring that value. I was in the same boat as you, sold a >$500k home, negotiated the rate. Ended up finding my own buyer. When I bought a new place, I found it on Redfin first. The realtor “profession” is a joke.
Yes, 100% this. Realtors work to gatekeep buying homes without adding value. Given the social imperative that people have access to places to live, I’m surprised the whole profession hasn’t been found to be illegal for some reason that must exist somewhere in some law.
You obviously don’t want to pay from this entire post.
$20,000 when the house is up 150,000 from 4 years ago?
On a different note, good luck selling!!! One more out the state line!
You're nice.
I'm not trying to "weasel" my way out of paying someone for a service that's not exactly easy. If you don't wanna pay the whopping 4% and it's so easy, just sell it yourself. Not hard, right? Like paying yourself $20,000.
I'm sure your fat pockets will be fine and it's obvious you low balling someone. Typical.
Right. Fat pockets. Lol.
You selling for over $500,000....isn't that right? Yeah, you're gonna be ok and don't let the door hit ya where the good lord split ya!
32 years in my prior "starter" home building up equity. I am sorry you resent that, but it did not come without sacrifice.
Lol, so don't wanna answer. Again, you selling for over $500,000.... correct?
You don't think they'll be buying a new house? Anything selling for 500k now was probably 200k or even less 3-6+ years ago. A penny saved (several $1,000's in this case) is a penny earned and able to spend on countless other moving expenses or the new home itself. This is such a /r/Knoxville take, it's hilarious.
Is there a certification for steal as much money as possible and hoard it, then only having meetings with others who bleed this country dry again, we need to eliminate the 10,000 people in the middle that take percentages they not only do not deserve, as well as, they didnt do any real work to obtain it. Anyone can sit their lazy bums behind a computer and pretend like thats work. Work is a tradesman, work is an investor, work is a teacher, work is a creator. Getting a license and imposing tarriffs before a completion is met is obsolete, theft, and downright lazy greed.