Why US Realtors Earn 6%! Commission and why despite this it is worthwhile to use a broker when we want…
Why US Realtors Earn 6%! Commission ❓
And why is it still worthwhile to use a broker when we want to sell?
When I tell people about expenses,
That we have on property at the time of sale
And indicates that the brokerage commission is 6%
Almost always raise an eyebrow and ask me -
"what? That's a lot of money !!!
Let's be realtors in the US!
Here in Israel we are used to it
Pay the broker 2% on a real estate transaction
And that too often sounds excessive to us…
So 6%?
So how about in our digital age with sites between Zilo, Trollia and others
(American 2nd hand) Is it still going on?
Curious? So ….
In the US, it is customary to pay the brokerage fee
Is usually on the seller only,
That is, the buyer who is looking for a property to purchase
Does not pay for brokerage at all.
Which is why, naturally
The buyer turns to a broker for help
And does not bother to search for properties on sites on the net
Here's why start running around filtering and checking
If there is someone who does everything for you
And free praise?
The realtor ran for him, suited him
Exactly what he was looking for,
Take care of his mortgage, do the negotiations for him
And it's all completely free… That's how it is usually there…
This is why the market works,
The seller also has an interest in contacting the broker in order to
Be exposed to as many potential buyers as possible,
After all, most of them work with realtors…
So for the most part, each side has its own mediator,
And the intermediaries are the ones who connect buyers and sellers
(They communicate through a computerized system
The MLS and this I will elaborate on in another post).
In this, the realtors share a commission
And each will receive 3% of the brokerage fee paid by the seller.
So even though the brokerage fee seems high to us
In relation to what we are used to here in the country
We should still use a realtor for sale.
This expense is part of the weighting
We do when we build
The business plan for buying, renovating and selling a property.
And despite this expense,
The projects in which he was chosen to invest
Will be attractive in their returns.
If you would like to ask and know more, I would be happy to help
The original responses to the post can not be read at the bottom of the current post page on the site or in the link to the post on Facebook and of course you are welcome to join the discussion
I saw someone write that his agent in Cleveland was not looking for enough homes for him to invest.
I can tell you that Arizona simply has no houses right now. Especially at the low investment prices. What happens is when the market is normal we have an inventory of about 45 thousand properties for sale. Right now in all of Arizona there are 9000 and of those private houses for sale from nothing to millions there are 3550!!! The stock is small. The market is excellent for sellers...and also for buyers because of the low interest rate.
Every home immediately has a lot of offers and houses are sold within a few days.
I will add from my experience in transactions from several places in the USA, all the answers here are actually right, it very much depends on the location of the property and its cost, the higher the demand and the higher the price, the better the opportunity to bargain, beyond that we must not forget that the agent also usually shares 50% with the office manager and not only With the agent of the other party, so that in fact a broker earns 1.5%, hope this clears things up for everyone 🙂
I work with a realtor in the Cleveland area and she only occasionally responds to a comp request for rent, arv and renovation appraisal and really doesn't bring me properties that I want...
I am an architect and looking for an apartment in Manhattan. I really do not need a realtor to find me an apartment and I know very well how to negotiate myself.
If I do not use a broker, the buyer's broker is the one who receives a 6% commission. In an apartment that costs $ 1.5 million, that's $ 90,000. Tell me in what world it makes sense.
Daniel Sankash
6% ?? I work at DOUGLAS ELLIMAN and we get 4% in Long Island and the city….
The average house price in the US is not really high, do not remember but around 250 300 thousand.
And most agents work their ass off until the house is sold, they get 5% not 6. And half of that goes to the buyer's agent. In short, the clueless Israelis who talk about agents' fees... they don't really become millionaires in a year like some try to paint. In my opinion, the average salary of a truck driver is higher than the average salary of a real estate agent
I mediate in Arizona and can tell you that not everything is black or white. I actually accompany the seller or the buyer from the first moment until the transaction is made and also afterwards. The work of realtors is not at all simple and we here continue to learn all the time and have a hand on the pulse regarding everything that is renewed. For example… Today is the first time in history that the population in California has not grown but small…
With us, it continues to grow.
We as brokers do not work by hours and in fact work seven days a week. The salary is shared with other factors. like the parent company. and the broker. And of course insurance on every transaction.
By the way... Effie, you said it very nicely. and thank you
Wow .. what comments to the post, amazing the trouble understanding of almost all the writers here.
The vast majority, are paper pushers and do not really understand their work. That's why many do not like real estate agents. A significant number of realtors act like used car dealers and it is obvious that they just want to sell something, without understanding the consequences for the customer in terms of the cost of the deal and the quality of the property with which he will stay. Not interested in the client, and the occupation is mostly to get and open the property door and then play on the cell phone. Most of them fail to prepare homework in the characterization of the client and his needs (residence, investment, requested specifications).
In Florida I got a brokerage license, just to handle my transactions and to be able to bid on my own. I have come across quite a few agents who are unwilling to list bids that are even 10% lower than the asking price, even though the property is in disgraceful condition. Of course there are about 5% of the brokers who do a wonderful job and these are mostly the brokers who make a very good living.
That's right Epic!
Another reason about the difference between Israel and the United States - to earn 3% (some of which also go to the office and not directly to the realtor) for this low amount is very little money
Compared to 2% in the country for a much higher amount.
The realtors there do a lot of work (some ..) for a paltry sum
So sometimes, in properties bought under about $ 100k there is also an absolute amount.
I am in favor of paying, for those who do a good job for me - deserve to earn
There are lots of reasons but in my opinion the reason they earn as much as they earn is because they usually save lawyer costs (as opposed to deals made in the country). The forms are regular forms for buying an apartment and the realtor manages the transaction from A to T. Including due diligence, inspection, must be on de op of all critical dates in the contract, etc. He will usually always be in contact with the lender to make sure that the deadlines set in the contract are met in order to avoid fines / loss of EM.
Another important thing is that a broker pays a lot of money for courses to renew a license, an MLS subscription that can reach thousands of dollars a year, etc.