Yep you read right, generally the whole deal is done for 2-3%.

Fees used to be fixed by the government but the entire industry has been deregulated. The race to the bottom resulted in fees around 2 – 3% all up. If there is an agent introducing the buyers there is no set formula for how the commission is split but it is usually 60/40 ish (in favour of the selling agent).

One can work as a buyers agent and charge them directly.

I suppose the only way to compare them is to look at the actual cost of the product though. The median price for a home here in Perth, W.A. is roughly $450 000 AUD. I don’t know what prices are like in the states. At that price I would be charging 3%. I’m in a bit of a higher end market though so properties do start achieving one million and up and that is where I’d charge 2%. But since its all deregulated agents can charge whatever they like.

I’m not sure how to elaborate on how our system works though, I expect its probably very similar to yours but I haven’t really got a clue of how you guys operate…

Yep you read right, generally the whole deal is done for 2-3%.

Fees used to be fixed by the government but the entire industry has been deregulated. The race to the bottom resulted in fees around 2 – 3% all up. If there is an agent introducing the buyers there is no set formula for how the commission is split but it is usually 60/40 ish (in favour of the selling agent).

One can work as a buyers agent and charge them directly.

I suppose the only way to compare them is to look at the actual cost of the product though. The median price for a home here in Perth, W.A. is roughly $450 000 AUD. I don’t know what prices are like in the states. At that price I would be charging 3%. I’m in a bit of a higher end market though so properties do start achieving one million and up and that is where I’d charge 2%. But since its all deregulated agents can charge whatever they like.

I’m not sure how to elaborate on how our system works though, I expect its probably very similar to yours but I haven’t really got a clue of how you guys operate…

By the way, everyone keeps talking about the 6% system, but I think the average is much lower than that in most areas. I’m an ex-RE/MAX agent, and I know they were one of the first companies where agents really started to cut their commissions, though no one likes to talk about it. They gave their agents that freedom, and many of them ran with it and offer all kinds of discounted rates. Not saying which side is better or worse, just mentioning the facts, as I don’t believe the “6% system” really exists any more (on average).

By the way, everyone keeps talking about the 6% system, but I think the average is much lower than that in most areas. I’m an ex-RE/MAX agent, and I know they were one of the first companies where agents really started to cut their commissions, though no one likes to talk about it. They gave their agents that freedom, and many of them ran with it and offer all kinds of discounted rates. Not saying which side is better or worse, just mentioning the facts, as I don’t believe the “6% system” really exists any more (on average).

Problem is we sell homes for people for more than one reason. I recently sold a house for a woman who was pregnant and the actual sale price was less of an issue than making sure we could arrange for her to be (financially and emotionally) where she needed to be before the baby arrived.

How do you quantify what I helped her through? That peace of mind and stress off her shoulders was invaluable to her (I’d like to think ). However in Australia commissions are a lot less usually somewhere between 2 + 3%….

Good article but until you can find a way to quantify such experiences as the one mentioned above to a monetary level you’ll probably never find an answer. (And I doubt that’ll happen, its like defining living standards)

Problem is we sell homes for people for more than one reason. I recently sold a house for a woman who was pregnant and the actual sale price was less of an issue than making sure we could arrange for her to be (financially and emotionally) where she needed to be before the baby arrived.

How do you quantify what I helped her through? That peace of mind and stress off her shoulders was invaluable to her (I’d like to think ). However in Australia commissions are a lot less usually somewhere between 2 + 3%….

Good article but until you can find a way to quantify such experiences as the one mentioned above to a monetary level you’ll probably never find an answer. (And I doubt that’ll happen, its like defining living standards)

Unfortunately, not everyone touts their knowledge level because not all agents have the necessary knowledge level to be proud of.

Unfortunately, not everyone touts their knowledge level because not all agents have the necessary knowledge level to be proud of.

Preface: Our profession does need a makeover and many of us are continuing to improve our value proposition but there are a couple of big assumptions used in the article to draw some unconvincing conclusions here:

#1) All transactions include a 6% broker commission.
Not sure about everyone else, but 6% listings are not the norm for any transaction that I am familiar with. 6% is more like a starting point. Therefore, the authors may have needed to read more than the FSBO website to gather data on how much Realtors charge for services. Where else could they have gotten this data for 15,000 transactions? Nowhere except, The HUD closing statement. Anywhere else is just speculation. As a broker, is there any firm averaging 6% GCE? (3% for each side)

#2) All of the FSBO transactions were totally brokerless.
An FSBO’er may be able to list a house on the MLS for $150 but what do they pay when a Broker comes calling with a willing buyer? 2.5%? 3%? 4%?
I’ll show FSBO properties if the house seems to be a comparable choice. However, I won’t do it unless the buyer has promised to pay my fees or the seller has agreed, in writing.

And, for the following reasons, FSBO does not scale to the masses. DIY Sellers and DIY buyers love to haggle with each other. Just like there are those who like to yard sale. In my experience, most buyers have no interest in this. Why do buyers hate it so much when the sellers do not leave the property during viewings? Further, is this uneasiness supposed to go away because the home is FSBO and not broker listed? I think not.

Preface: Our profession does need a makeover and many of us are continuing to improve our value proposition but there are a couple of big assumptions used in the article to draw some unconvincing conclusions here:

#1) All transactions include a 6% broker commission.
Not sure about everyone else, but 6% listings are not the norm for any transaction that I am familiar with. 6% is more like a starting point. Therefore, the authors may have needed to read more than the FSBO website to gather data on how much Realtors charge for services. Where else could they have gotten this data for 15,000 transactions? Nowhere except, The HUD closing statement. Anywhere else is just speculation. As a broker, is there any firm averaging 6% GCE? (3% for each side)

#2) All of the FSBO transactions were totally brokerless.
An FSBO’er may be able to list a house on the MLS for $150 but what do they pay when a Broker comes calling with a willing buyer? 2.5%? 3%? 4%?
I’ll show FSBO properties if the house seems to be a comparable choice. However, I won’t do it unless the buyer has promised to pay my fees or the seller has agreed, in writing.

And, for the following reasons, FSBO does not scale to the masses. DIY Sellers and DIY buyers love to haggle with each other. Just like there are those who like to yard sale. In my experience, most buyers have no interest in this. Why do buyers hate it so much when the sellers do not leave the property during viewings? Further, is this uneasiness supposed to go away because the home is FSBO and not broker listed? I think not.