How much is a typical real estate commission? Actually, there isn’t a “typical” anymore.
What is the typical real estate commission percentage? In the past it was 6%, but why?
Traditionally it was 6% because 3% was always paid out to the agent representing the buyer in the transaction. as well as 3% paid to the Agent you hired for the job of selling your home. 3%+3% = 6%.
But there have been some changes in the real estate market in recent years and there are now some new options available to you.
Have you ever had a time in your life when you bought the cheapest option because you were in a hurry and then regretted it later? I have. Six months ago I bought a pot and pan set from Kohl’s for $49.99 and it’s already dying. It’s the same with real estate commissions—you get what you pay for.
You should be asking your Agent:
- Will you be using a professional Architectural photographer?
- Do you plan to shoot a Matterport “Dollhouse” tour of my property?
- What about professional (drone) video?
- How do you plan to utilize Zillow, Trulia and even print marketing to attract Buyers?
- And perhaps much, much more….
More marketing dollars, used more wisely, attracts more eyeballs (i.e. Buyers) to your property, thus typically bringing you a higher sales price!
At this point you could hire a 3rd party
As you look at real estate commissions, you need to look at how much money you want to put into your pocket at the close of sale. You could easily list your home today for hundreds of dollars on the MLS and have the agent do no service or marketing, need to schedule your own showings, pre-qualify your own Buyers, and have that agent only show up when it’s time to negotiate the contract or pay an attorney to negotiate for you. And for some folks, this makes sense!
On the extreme other end of the spectrum you could also pay a premium auction company $30,000 to $40,000 upfront to market your home and then also pay a 7% fee at the end of the transaction for your $1 million home.
But in today’s market, set aside 3-7% of the sales price for premium market exposure, drone photography, unique placement on Zillow, Trulia and other websites, and ultimately, getting the highest price possible!
Most Sellers don’t actually want a commission discount.
Really. What Sellers want is the MOST MONEY IN THEIR POCKET AT CLOSING. The actual commission percentage is irrelevant as long as they’re confident in that outcome.
When you meet with a real estate professional, you need to ask about their fee structure. At the Larkin Group, we actually have a flexible fee structure. It’s based on what you want to put in your pocket at the close of sale.
If you have any questions about this or anything else real estate-related, please feel free to reach out to me. I look forward to speaking with you soon.