To Listing and buyer agents,

How often, as a percentage of deals you view, have you come across something less than the standard 6% commission. I'm sure small deals, not very often. I would expect larger deals more often.
Is there a dollar amount at which some brokers consider lowering their commission? For example, many wealth managers/financial planners have different percentages they work off when managing the assets for their clients; depending on the dollars under management.

I can't speak for realtors, but I've had them reduce their commissions before by giving them business on the other end. Also had a guy I work with sell his $3mm house in an area that was hot (house basically sold itself) that just said point blank that he would pay 1% each direction. He had plenty of takers at that price, because it's still a 30k check for basically filling out some paper work.

I'm a licensed Texas Realtor and it's going to depend on the actual property, the location, and the price. Most transactions use two different brokers and they almost always split whatever commission there is so it's not one person getting 6%. Many brokers, including mine, don't allow a Realtor to work both ends of a deal. In a listing agreement, you should have the percentage the broker will be paid spelled out explicitly. Also, the amount that the buyer's broker will get paid should be spelled out, too.

Everything, and I mean everything, is negotiable in a Texas real estate transaction. Just keep that in mind.

Heh, I promise, I have never had a transaction that was "filling out some paperwork"! Many seem like they'll be that way, but it's never the case. People start acting funny when large dollar amounts are involved.

0n a large and marketable tract, 6% on the first $500,000 and 3% on the amount over that can be acceptable in some cases. As FordEvangelist says when people are parting with their money or their land, easy going folks can become very difficult to deal with. Emotions come to the surface.

Every deal is different.

it also depends on the dollar amount being sold.

Bought my hose with just someone to do the paperwork and worked out great. I also know several people who have bought land with just an attorney or agent doing the paperwork with no issues whatsoever.

I bought my house for sale by owner I talked to the owner, met with the owner, negotiated with the owner, and he paid an agent a small fee to draw up the paperwork.

Interesting. It is kind of what I thought. It sound like it is negotiable; especially on bigger deals.

A lot of variables to play in real estate transactions. When I bought my place a couple years ago, I got inside intell on a landowner that wanted to sell. I offered him a price and he took it. We paid a real estate company less than $1k to do the transaction. This was all transfer fees, lawyer review fee, etc.

However, this was for a 100% cash deal with no financing. You bring financing into the deal and the real estate company would not do the same type of deal.

Up north in the farm land area (North Oklahoma, Kansas, Nebraska, etc) probably 75% of all land deals are done like I did it. It is only the non-farmable land or people that want way to much that use the old way of selling through a real estate agency. There are also a lot of estate sales that use auctions.

When I bought my commercial rental property the commission was 4%. Like they said, the more expensive the property is the more negotiation power the seller has with the commission percentage.

FordEvangelist, that's strange that your broker won't let you work both sides of a deal. That's costing you money, big time. As an intermediary your job is to represent both parties in a fiduciary capacity. Nothing wrong with that. I'd look for a different broker if I were you.

No offense meant, fordEvangelist, I know real estate closing can be simple or complex in nature...BUT in most of the real estate transactions I have been involved in (or seen), it always seems to be the brokers that create more consternation than is necessary. True, when loans are necessary, underwriters seem to get involved to convolute the process...but then the brokers (on both sides) seem to get involved to make it more hassle than necessary (seemingly very busy trying to collect that fee by recommending numerous shortcut alternatives)...which seems to bring out the beast in otherwise reasonable folks. For the record, I own 20 houses, plus some unimproved properties and have been involved in many, many more transactions assisting folks that seem to have the brokers/underwriters blowing up the sale (both as a banker and a consultant.) So please don't think I am talking out of ignorance or anger, because I am not. Fact is, as a former Bank Examiner, I used to have to tell the bankers how the brokers/underwriters screwed up their loan closing papers...as I was citing them loan violations....

For the most part, you can find a realtor who is willing to negotiate on most any property, except for small dollar amount sales.

Perhaps the underwriters are protecting their company and/or client's interests. Just a thought.

Brokers "make it more hassle". That's good. I'll use that one later.

I hope you didn't receive any fees or compensation for "assisting" people on any real estate transactions.

It does seem that you've had to save everyone else from ruin in every transaction you've been in. Good job.

I don't know about yal, but I don't think real estate companies, brokerages etc. have much to do with financing. You are going to pay the same sale commission wether you finance it or not, but you will likely have to pay for a survey/appraisal/inspection etc. if you use a loan, however that is not part of your commission unless the broker provides all of that. Typically the survey appraisal and inspection are negotiated between buyer and seller and one of them will pay for it or its split, but has nothing to do with the commission.

When you get the stars out of your eyes, and your nose out of the air...PM me, I will be happy to explain truth from fiction to you!

Seriously? A good broker will take the hassle OUT by eliminating the emotion that can go on between buyers and sellers without representation. Smooth transactions are rare without brokers and agents.

yep.

this guy gets it

The smoothest transactions I have ever been involved in were WITHOUT a broker. Suppose we will just have to agree to disagree.

OOPs, just saw the part about the GOOD broker...there are actually a couple of good brokers around, to be sure, and they will handle a transaction smoothly...Problem is that the vast majority of folks that call themselves RE Agents, or Broker Associates, etc., are not that sharp or knowledgable and have a tendency to cause MORE EMOTION than is necessary from otherwise rational individual buyers and sellers, in an attempt to rush a sale. I refer to it as Fear Mongering Agents...And Yes, I get it more than most ever will.

you must be referring to residential sales.

Hey txtrophy85, it is (was) fairly rampant in the residential/commercial arena to be sure. With that said though, given my background and experience, I have seen many train wrecks in the farm and ranch arena as well. Normally though, when it involves farm/ranch type properties, there is a well orchestrated bunch of cons going on...Plus, it generally includes a loose knit ring of bad actors, to include the broker, appraiser, banker, and occasionally an attorney as part of the group...sometimes, it even includes a couple of straw purchasers in the mix.

These days bad acts still happen, greed is greed and that will never change, but it is harder (not impossible, but harder) to work around the rules, lately. Now, that doesn't mean that the soft stuff (from my earlier conversations) doesn't still happen regularly...part of the reason, is the way RE Agents get paid. When sales are few and far between, desperation occasionally sets in and makes even good folks do bad acts. RE sales are all about networking, such as through this website...Basically, I can look at the answers provided by Brokers, Associates, Agents to questions posed on here by well meaning individuals...I can tell you who is good, bad, new, seasoned, knowledgeable, deceptive, straightforward, etc. It was my job for many years. I suppose that is why I take exception to some of the more egregious comments...but the good news...I don't comment every time, I see someone make a misstatement..just when one gets under my skin...

BTW, that comment you made earlier was right on target, and was well stated...so, I decided to back you up...I notice the good and the bad...and I don't mind giving my opinion either way. Here's hoping you, your family, and our forum family have a Merry Christmas!

JESUS

Unfortunately, you are right.

There are alot of unethical, unscrupulous and uneducated agents out there.

It's my mission to bring honesty and professionalism to the business. I have a list of references that will substantiate my integrity and knowledge of handling transactions.

Now that forum members, is the kind of person that recognizes his industries potential shortcomings, but is willing to go above and beyond, for ALL the RIGHT reasons...IMHO you can send him a PM to ask really SERIOUS questions...about RE related transactions....It is what I refer to as "taking the high road"...In fact, TXTROPHY85, you just made my day....

I am a realtor and from my prospective it means more to me to help individuals find that special place and see them happy after making the purchase. My dad who is also a realtor has always told me that being able to help others is way more meaningful than cashing the check.

With this being said every realtor has to make a living just like every individual who works any occupation. 6% is a standard rate on commissions but there are many different variables that may alter the commission rate. Here is how a realtors 6% standard commission is broken down.

3% goes to the broker that brings a buyer
1% goes to advertisement of the property
1% goes to to pay broker fees and insurance policy
1% goes in the listing agents pocket to feed and care for their families.