BC real estate commissions
I'm looking to sell a $2m+ house. I've been quoted 7% on the first 100k and 2.5% on the remainder by several agents, split approximately 45/55 between buyer's agent and seller's agent. That's going to be about $35k to the seller's agent and $30k to the buyer's agent.
I'm fine with the buyer's agent commission. Smart buyers get a lot of that rebated anyway.
I'm a bit less comfortable with the sellers commission. I understand realtors need to make a living, and I don't begrudge them that. I'm too busy to sell this personally, so I will use an agent.
However...
1) How much is it customary to negotiate this down? The local realtors all seem to collude on 7% / 2.5%. There can't be twice as much work selling a $2m house as a $1m house, yet the commission is almost twice as high. It isn't clear how much flexibility I have, whether agents will do a poor job if I'm pushing below market, or whether I even want an agent willing to negotiate.
2) Should I be pushing for a rebate for unrepresented buyers? The standard appears to be that the real estate agent gets paid twice if the buyer is unrepresented. This appears to be a massive conflict of interest.
3) Are good agents going to be open to alternative structures? The ones I've talked to don't seem to be. The agent's pay isn't really sensitive to their work, just to their volume. They make far more selling twice as many houses for less than market than they would selling fewer houses for good prices. I'd much prefer, say, paying them $200/hour PLUS 10% of the sale price above $2 million. That would at least ensure they have the right incentives to maximize the price.
I'm not seeking to reinvent the wheel here, but I don't want to be the sucker who buys a pickup at MSRP. How much should I be getting off? (I believe the right answer here is to list it myself with a 1.6% buyer's agent commission, unfortunately I do not have time)
I'm fine with the buyer's agent commission. Smart buyers get a lot of that rebated anyway.
I'm a bit less comfortable with the sellers commission. I understand realtors need to make a living, and I don't begrudge them that. I'm too busy to sell this personally, so I will use an agent.
However...
1) How much is it customary to negotiate this down? The local realtors all seem to collude on 7% / 2.5%. There can't be twice as much work selling a $2m house as a $1m house, yet the commission is almost twice as high. It isn't clear how much flexibility I have, whether agents will do a poor job if I'm pushing below market, or whether I even want an agent willing to negotiate.
2) Should I be pushing for a rebate for unrepresented buyers? The standard appears to be that the real estate agent gets paid twice if the buyer is unrepresented. This appears to be a massive conflict of interest.
3) Are good agents going to be open to alternative structures? The ones I've talked to don't seem to be. The agent's pay isn't really sensitive to their work, just to their volume. They make far more selling twice as many houses for less than market than they would selling fewer houses for good prices. I'd much prefer, say, paying them $200/hour PLUS 10% of the sale price above $2 million. That would at least ensure they have the right incentives to maximize the price.
I'm not seeking to reinvent the wheel here, but I don't want to be the sucker who buys a pickup at MSRP. How much should I be getting off? (I believe the right answer here is to list it myself with a 1.6% buyer's agent commission, unfortunately I do not have time)
