Commission rates for two real estate agents

Divisadero

I am trying to help a relative sell a property. We need to bring in a second real estate agent (long story!). Does anyone know the procedure regarding commission when more than one agent is involved. Does the commission in effect double, with two commissions one for each agent? Or is it normal for the agents to simply split the original agreed commission? In other words with no additional cost to the seller.

The new agent is proposing a joint overall commission of 3.5% plus VAT, whereas the original commision was 1.5% (just one estate agent). Does this sound normal?

Dades

Divisadero wrote: »

Does this sound normal?

Not to me, anyway. It sounds ridiculous.

If the first estate agent can't sell the property without bringing in a second agent then dismiss them, I say. Why should you pay twice the fee? If the house isn't selling it's probably because (1) the house is overpriced, and/or (2) the first estate agent has done a really shoddy job in advertising/promoting it.

I would tell the estate agent to split his fee with any other party, or else find another EA and lower your price.

Perhaps there's something in your "long story", that suggests otherwise?

Gandalph

Which ever Estate Agent finds the buyer would get the commission, the other recieves nothing.

But I ask why do you need 2 for this transaction?

Penguino

You can have a joint agency where the two agents split the commission. The commission they split is the original 1.5% not double that and then split it. A joint agency normally occurs when a national agent uses the local knowledge and assistance of a local agent to sell the property.

You can also have multi agency agreement where a few agents advertise the property and whoever sells it gets the commission.

I agree with an earlier post in that you should look at the cost of the property and do a comparison with other properties in the area to see what price things are selling at.

the_syco

Divisadero wrote: »

The new agent is proposing a joint overall commission of 3.5% plus VAT, whereas the original commision was 1.5% (just one estate agent). Does this sound normal?

If the 1st is employing the 2nd, I'd let the 2nd have 3.5% of the 1.5% that the 1st is getting. If that's unacceptable to them, tell them both to GTFO, and you'll pick someone else as an EA.

BTW, is your house for-sale price around the same amount for house within a 10KM radius of your house?

Divisadero

Thanks guys. The matter has since been resolved. But since you asked yes the house is very competitively priced and secondly I have no choice but to hold onto the original agent (the long story bit!).

But thanks again for all of your replies.

EKRIUQ

The reason being is if there is only one estate agent they are guaranteed there commission when the house sells where as when there are 2 or more estate agents there guaranteed nothing even if they show the house 30 times and take hours of phone calls. The higher commission is because there is a higher risk of getting nothing from the sale at only at that rate 3.5% are they willing to chance it.

Dades

EKRIUQ wrote: »

The reason being is if there is only one estate agent they are guaranteed there commission when the house sells where as when there are 2 or more estate agents there guaranteed nothing even if they show the house 30 times and take hours of phone calls. The higher commission is because there is a higher risk of getting nothing from the sale at only at that rate 3.5% are they willing to chance it.

Still makes no sense. If the EA can't sell the property themselves then the fault is with them or the price.

The only conceivable scenario where one would agree to a rate of 3.5% would be where the house sold for above a certain amount.
And in this market clinging to a high valuation is a sure-fire way to sell nothing, so that would be madness.

sponge_bob

EKRIUQ wrote: »

The reason being is if there is only one estate agent they are guaranteed there commission when the house sells where as when there are 2 or more estate agents there guaranteed nothing even if they show the house 30 times and take hours of phone calls. The higher commission is because there is a higher risk of getting nothing from the sale at only at that rate 3.5% are they willing to chance it.

thats just plain stupid.
which ever estate agent sells the house gets paid end off. if an estate agent told me that yarn i would just stand up and walk out the door, i would not entertain him atall. if he is trying to swindle you now with this BS story even before he gets the job:eek: he is a gangster plain and simple:mad:

Snakeblood

tisanjosh wrote: »

Historical rates are presented in a report by the Government Accountability Office, Congress's investigative arm. A 2005 study of real estate commission rates, reported that realtors tended to charge, "about 5 percent to 7 percent of a property's selling price..." This indicates a range with an average of 6 percent. More recently, CBS News, "60 Minutes" television news magazine reported in 2007 that competitive pressure resulting from a record number of licensed agents has driven down the average sales commission rates paid by sellers. The current average at that time was reported to be roughly five percent.

That's in the states though. It's very different. The standard rate here is lower.

Victor

Snakeblood wrote: »

That's in the states though. It's very different. The standard rate here is lower.

That was spam.

Snakeblood

Victor wrote: »

That was spam.

Oh right, I thought it was someone who didn't know how to use google. :-)

Raskolnikov

I always thought that when a property was marketed by two agents, the seller would pay the fixed advertising costs (signs, myhome.ie entry, etc.) to both agents, but the actually fee, would go to the agent that sold the property?