When I listed my home for sale earlier this year, my agent asked me to sign a listing agreement that called for a 6% commission to be paid at closing. The 6% broke down this way -- 1.5% for the seller's agency, 1.5% for the seller's agent, 1.5 for the buyer's agent and 1.5 for the buyer's agency. I guess such commissions are reasonable when one is selling a $250,000 house, but that's $90,000 for a $1.5 million house.
I told my agent that I liked her, and I knew she had a good reputation in the community, but that was too much money. And, obviously, houses sell quickly in this town, even when the real estate market is "slow," because of the lack of supply.
So I proposed a 4% commission -- and she took it. And we had no problem selling the home. And we saved $30,000.
After closing, my agent told me that her agency instructs agents to initially refuse to negotiate the commission with a seller, but if the seller persists, to agree to anything they want on the grounds that the agency doesn't want to lose market share.
I talked to a reporter from the Weekly a few weeks ago about this subject and she says they're going to do a story on cutting commissions. Keep your eyes open for it.