Asking Realtors how much they charge for representation is a lot like asking the Federal Government about Area 51. You are simply not going to get a straight answer. There are several reasons why most Realtors don’t like to talk about listing fees or rebates. The biggest, I believe, is the fear of lawsuits. Many years ago several Real Estate firms were sued for collusion because they openly discussed Real Estate rates and fees at a conference( big no-no). There’s also the fear of losing out to the 6% listing( average listing rate is about 5.1% ). After all, the 6% commission fee has been a part of the Real Estate industry since Realtor photos on business cards actually looked like the agents who’s name is on the card.
So, the question is “How much should you pay or be rebated on your next sale or purchase?”. Here are some things to consider;
The first thing you need to think about is what type of service do you want. I pride myself on being a “Full Service Realtor with all inclusive Real Estate Services” (I save the nickels and dimes for parking meters not clients). There are firms that specialize in “a la cart” services. This could mean “Limited” representation or scaled back marketing. These firms will unbundle their services to the point where you can order every aspect of the Real Estate transaction separately (i.e. signs, lockboxes, paperwork, MLS posting etc.). This is a great option for those that are seasoned sellers and want to save a few dollars. You can also get a higher rebate if you are willing to do all or some the legwork on your purchase. Since the sellers typically pay the buyer agents fee (normally 3% of sales price) this could be a good place to negotiate if you are willing to do most of the heavy lifting.
Does brand matter:
Sometimes shopping different Real Estate brands can save you thousands of dollars in commission fees if you are selling and maybe even get you a bigger rebate if you are buying. I’ve had the pleasure of working for several different major Real Estate firms over the many years I’ve been in the “biz” and I can tell you that each brand/firm has its own policy and/or culture about listing commissions and buyer rebates. One of the reasons I work for Prudential PenFed Realty is that my firm allows me to offer listing discounts and buyer rebates to our clients. I love a good win-win-win situation!
Who you hire:
Getting a good deal on listing or buying your next home ultimately comes down to the Realtor trying to win your business. I personally will rarely walk away from a client because of commission rate or buyers rebate (if it’s reasonable…one must eat right…). Try and interview several Realtors (at least three) before you hire one. Always ask if the agent has a rebate program or if he or she is willing to give you an extra discount if you buy and sell with him or her. Also ask about administrative fees and closing costs on top of the commission (Btw, I never charge administrative fees or junk fees to my clients!).
I’m all about local; produce grown locally, restaurants with local roots and flavor, and small businesses with local mom and pop operators. Think about interviewing someone from a small Real Estate firm in your area (hint: those really nice offices and newspaper ads aren’t for free). These smaller firms tend to have some extremely talented Realtors and are run extremely efficiently. Give one a shot at your business. You might be surprised.
Bottom-line, think about the level of service you want or need, shop around and interview at least three Realtors, work with only Realtors that will negotiate with you, and think local!
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