I want to list my condominium for US $1.3 million. How can I decide on a fair real estate commission?
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In the US, real-estate agents in many markets join a multiple listing service -- all members of the service list all the properties of the agents in the group on their own web sites, advertisements, etc., and try and sell them/bring them to the attention of their own buyers. These people usually charge 6% of the selling price as their commission, which is split between the agent who sells and the agent who lists. So naturally the listing agent works harder on selling the property that he lists, but other people will be working to sell your property too. Alternatively, you can also get an exclusive deal with some agents (usually not those who belong to the multiple-listing service) and negotiate a commission with them or get a flat-fee deal but you get less publicity and fewer people trying to sell the property. Of course, it is also possible to try and sell the property yourself and save the commission entirely, but then you have to pay for advertising, handle nuisance calls and screen potential buyers, show the condo yourself, do all the paperwork, etc. |
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Many states have instituted caps on commissions, some have formulas(Florida for example). Look into the NMLS guidelines and your states banking/real estate regulations to find out if this is the case. |
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While it might or might not be possible to negotiate on the commission, it is something to discuss with the three agents you interview before listing the house. You will also care about how they plan to market the home, what they think the selling price will be (and how they determined it), and what they think you need to do to get the house ready to sell The commission is just part of the equation. A poorly performing agent can result in final price that is too low, or an initial price that is too high which will waste weeks or months. |
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