Article Score0

According to my book “Home Buying for Dummies” it’s 3%… of course this copy of it is from 1996 or so, what’s the rate now?

Also, how do I protect myself from an agent collaborating with the seller or the seller’s agent and splitting THAT commission, rather than helping me negotiate a low price?

Is it possible for me to resaerch myself how much comparable homes/condos in an area sold for?

4 Thoughts on How much in commission does a buyer’s agent typically get?
  1. Reply
    November 17, 2012 at 7:01 pm

    your agent works for you and the listing agent and selling agent split the commission and your agent has a fiduciary responsibility to you

  2. Reply
    Doctor Foo
    November 17, 2012 at 7:46 pm

    everything is negotiable. The traditional commission for home sales was 6%, but most sellers have so many realtors to choose from that the realtors will offer reduced commission… usually 4%. The buyers agent usually gets half of the commission. The commission splits are usually on the contract to buy, last page on the bottom. You can ask your realtor for a CMA, comparative market analysis. Realtors cannot give you false ones. They are subject to codes of conduct and can lose their license. They are also not allowed to collaborate unless you benefit from the collaboration. I have never worked with or met a realtor that jeopardized a referral by hurting the customer

  3. Reply
    November 17, 2012 at 7:59 pm

    yes, 3% is still standard although there are always exceptions.

    As far as making sure your Realtor works for you instead of worrying about their commission, you have to pick a Realtor you trust. Most Realtor’s are smart enough to realize that if they give you great service they will make more money from your referrals and future business then they would make if they get a sale price of a few thousand dollars more, which results in a few hundred dollars more commission.

  4. Reply
    I Buy And Sell Houses
    November 17, 2012 at 8:33 pm

    Disclaim One: I’m a Realtor.

    Disclaimer Two: It’s all negotiable. There isn’t a set or standard amount.

    OK. With that clearly understood, full service agents in many areas of the country often will charge their sellers a 5%-7% fee. Again, it’s negotiable. So, let’s take 6% as an example.

    If it’s 6%, then usually that amount is split between the listing agent and the buyer’s agent. Actually, it can and often is split up to 4 ways. The listing agent will have a broker, and so the listing agent’s commission typically is shared in some percentage with the broker. Similar, the buyer’s agent has a broker, and that, too, is divided up.

    So, if a property sells for $ 100,000 and there’s a 6% commission, the seller pays 6%, or $ 6,000. Usually (but not always) half goes to the buyer’s agent. So, it wouldn’t be unusual for the listing agent to receive $ 1,500, the listing agent’s broker to receive $ 1,500, the buyer’s agent to receive $ 1,500, and the buyer’s agent’s broker to receive $ 1,500.

    So, your book is pretty much still correct…just recognizing that the 3% probably will be divided between the buyer’s agent and the agent’s broker.

    As for how the commission gets divided up, you don’t have any say in the matter. That’s established between the seller and the seller’s agent at the time of the listing.

    As for protecting yourself, it really works out that the buyer’s agent has an incentive to negotiate the best deal for you. And remember: Ultimately, you’re the one in control. Your agent is just that: Your agent. You make the decisions. If you don’t like the proposed deal, then don’t do it. The agent’s main incentive is to get an agreed-upon deal. Taking our example of the $ 100,000 property, suppose your agent somehow–illegally and unethically–went behind the scenes and told the listing agent not to reduce the price by, say, $ 1,000, even though that price reduction would have helped you. Well, if the selling price is $ 1,000 more, the commission is 6%, and it’s split 4 ways, your agent would have acted illegally and unethically in order to receive a whopping $ 15 extra in commission. Trust me: It’s not worth it. Your agent would much rather go in and get the price down to a level you’re happy with.

    As for researching what comparable properties sold for, you can…sort of. All sales are public record, and you can go down to your courthouse and look up recent sales. Many jurisdictions have that information online, so you might be able to do your research online. Do an online search for “[Locality] tax assessor” where the locality is your county or city.

    Problem is: That takes a lot of time and effort. Also, unless you’re dealing with many nearly identical properties (like condos in a large building), you won’t know for sure how comparable they really are. And another drawback is that public records don’t have all the information. For example, if there was a “seller subsidy” (you buy a property for $ 100,000 but the seller agrees to rebate $ 3,000 to help with your closing costs), then the tax records will show a sale of $ 100,000, even though the actual, meaningful number is $ 97,000.

    You can also use online services like Zillow. They’re terrible for actually projecting the value of a property, but they do pull up recent sales from the tax records.

    Your best option probably is to ask a Realtor to do a CMA (comparable market analysis) on a property. It’s free, it should be quick, and it’ll take into consideration things like seller subsidies. Still, it you’d rather not deal with a Realtor yet, you can do a lot of the research yourself.

    Hope that helps.

    Leave a reply

    Register New Account
    Reset Password