Real estate agent - what should the commission be? (MSP)

June 14, 2017 7:39 AM

We are selling our house in Minneapolis, Minnesota (and buying a new one.) What commission percentage should we expect the selling agent to ask for? Is there some percentage we should try to bargain down to? I have no idea of what's normal and/or achievable.
posted by Alluring Mouthbreather to Work & Money (9 answers total)

6% (3 for the buyer's agent, 3 for the seller's) is the usual amount. You can try to get your agent to reduce his or her share, but they may not want to. Most people simply accept it. If you choose not to, how far you will get will depend on your circumstances, your persuasiveness, and your real estate agent's situation. If you intend to use the same agent for both the buy and the sell, that's in your favor, because he or she may prefer to get 2.5% of one sale and 2.5% of another instead of just 3% for one. If the agent works for someone else, that works against you, because there will be more people involved, and smaller slices of the pie to work with.
posted by ubiquity at 7:49 AM on June 14, 2017

Best answer: I've bought two houses, one in Minneapolis and one in St. Paul. The agents I've worked with asked for 6%, which they split with the buyer's agent if there is one. I've heard that you can bargain but I don't know anyone who's tried.
posted by cabingirl at 7:51 AM on June 14, 2017

Be sure you're getting current information. I recently sold a home in Chicago and was surprised when my agent told me (without any negotiating on my part) that the standard commission is now 5%. There's a lot of competition from discount brokers like Redfin and the commission may also have fallen where you are.
posted by mama casserole at 8:06 AM on June 14, 2017 [2 favorites]

Building on what mama casserole says I think in a hot market you're more likely to be able to pay less - more realtors are competing for your business, turnarounds are faster, and home prices are higher. There's at least one (non-sketchy-looking) brokerage around here (Boston area) that advertises 4% commission.
posted by mskyle at 8:19 AM on June 14, 2017 [1 favorite]

Selling in the Boston area right now. It's a seller's market, and as a result, it's become common here to only offer 2% to the buyer's agent.

(Additionally, we're selling via Redfin, which only takes 1.5%. So our total commission paid will be 3.5% vs the historical 6%.)
posted by NotMyselfRightNow at 8:19 AM on June 14, 2017 [1 favorite]

When I sold in 2014, all the agents I interviewed indicated that 5% would be no problem.
posted by Dashy at 8:57 AM on June 14, 2017

In central Canada (2012), the conditions were 3% on the first $100k, 2% on the next $100k and 1% on anything above for each the buying agent and selling agent. That put the rate around ~4% on a $300k property; and slightly less so on more expensive properties.
posted by axismundi at 10:44 AM on June 14, 2017

Best answer: This is a really sticky question because of antitrust laws.
You might want to take a look at this article explaining that brokerages cannot come together to set pricing without violating antitrust laws.
Per Se Antitrust Actions in the Real Estate Brokerage Business.

The only way you can get this question answered is to ask agents in your area.
posted by littlewater at 12:29 PM on June 14, 2017

Response by poster: Just to fill you all in: the real estate agent offered 4.7% (2.7% of which will end up going to the buyer's agent) and we agreed. Some possible factors: relatively few houses on the market right now, the agent is a friend of my wife's, and he is handling (and getting a commission on) the purchase of our new house. Thank you, everyone.
posted by Alluring Mouthbreather at 11:22 AM on June 15, 2017