What should s/he charge?

September 22, 2005 12:53 PM

Real Estate Agent Filter: I'm about to put a house I own in suburban Maryland (DC Metro) on the market. What are reasonable fees for the selling agent I hire to charge?

Also, am I responsible for paying for the buying agent's fees? I don't think I am, but I just wanted to check.

posted by LGCNo6 to Work & Money (13 answers total)

Depends on what is usual and customary in your market. A 5-6% commission, which is split between the buying and selling agents, seems the most common. Check out the real estate fourm at That Home Site. Lots of great information on agents there.
posted by Sully6 at 1:02 PM on September 22, 2005

Before the housing costs in the DC area got out of hand, the typically fee for a Real Estate agents were 6% of the selling price. The fee would be collected as part of the settlement (if my memory serves). I know that the fee would be split between the seller's agent and the buyer's agent. What I don't recall was whether it was the seller's agent that did this (i.e the seller's agent got 6%) or if it was the seller that was responsible for this (i.e. the seller's agent got 3% and the buyer's agent got 3%).

For real expensive homes, I would hope you could get away with a smaller percentage, but I'm not sure if that's true in practice or not.
posted by forforf at 1:04 PM on September 22, 2005

Article in this weeks NY Times business section regarding real estate fees, trends, alternatives etc. I will post the link--I do not know how to post a direct link so you have to go with cut and paste--Good Reading
http://www.nytimes.com/2005/09/17/business/17realtor.ready.html
posted by rmhsinc at 1:12 PM on September 22, 2005

The selling and buying agent split the commission. In this area it is traditionally 6 per cent (3 to each)but ymmv.
posted by konolia at 1:13 PM on September 22, 2005

I am looking to buy in the D.C. area (Frederick, MD), and my buyer's agent explained that she gets paid by splitting the (typically) 6% commission with the selling agent.
posted by pmbuko at 1:34 PM on September 22, 2005

Same situation here as konolia but I'll add that sometimes the agents will bargain away part of their commision to make a deal happen. We were $1500 apart when we bought our last house and the two agents split the difference and took it out of their commisions.
posted by Mitheral at 1:35 PM on September 22, 2005

I just sold my house in Portland, Oregon. If I were to do it all over again, I'd demand a lower percentage. Five years ago when I bought my house for nearly half as much money as I just sold it for, the agents split 6% of that. Now my house almost doubles, it takes the same amount of time and work to sell it, the percentage stays the same, and the agents get twice the money. I don't see where the added (2x) value comes from. Play hardball. In this market you should be able to find good agents willing to take less than splitting 6%.
posted by pwb503 at 1:39 PM on September 22, 2005

Our selling and buying agent for our house purchase completed last year was 6% split between them.
posted by Pollomacho at 1:44 PM on September 22, 2005

Wow, end of the day, need to clarify that sentence. Our buying agent and the seller's agent split 6%.
posted by Pollomacho at 1:45 PM on September 22, 2005

pwb503, I hear what you're saying but good luck finding a smart agent who will work for less than standard commission. There are so many sleazeballs out there; the truly excellent ones who will put your needs first and not their commission are worth their weight in gold.

You'd probably be better off working out some kind of incentive agreement that encourages your agent to get you the highest possible price for your house. As in, "for every $10,0000 above price X I get, I'll increase your commission by $500."

If you live in a super hot market, I'd go FSBO. Perhaps pay an agent to do a comp analysis and hire a good real estate attorney. Just make sure you read up on the FSBO process beforehand and know how you will compensate agents who represent buyers interested in your home.
posted by Sully6 at 1:56 PM on September 22, 2005

Before you sign anything with your prospective agent, have your real estate lawyer look it over first. The lawyer would know what the going rate is, and if you're being taken. Real estate agents just want to sell your property -- not to protect you, or to get you the best price. Just to get their cut, and move on.
posted by MrZero at 4:17 PM on September 22, 2005

And please do remember that the real estate agency takes their pound of flesh from that commission. Many agencies take half of the agent's split-some offices the agent pays a monthly office fee. I suppose it all averages out but the point is that the agent does not pocket it all.

Real estate agents just want to sell your property -- not to protect you, or to get you the best price. Just to get their cut, and move on.

Legally a seller's agent MUST get the best deal for the seller, and must represent the seller's best interest. The buyer's agent, ditto for the buyer. They can get sued otherwise.
posted by konolia at 6:10 PM on September 22, 2005

Response by poster: Thanks all. This really helps.
posted by LGCNo6 at 6:55 AM on September 23, 2005