The truth is there is no standard commission. In fact, there was a large “east coast lawyer” lawsuit regarding this issue. The big loser from the law suit was the National Association of Realtors and its members. I’d like to say that the big winner was the consumer, but I’m not sure that’s exactly accurate.
At the heart of the lawsuit, was the idea of price fixing. Supposedly, agents and brokerages colaberated to set the rate (let’s say 5 or 6% of the sales price). That fee was paid by the seller and the listing firm split that sum with the selling firm. This was a situation that existed for many years – and it worked.
Since the aforementioned lawsuit, there is much needed conversation around commissions. Sellers can pay a commission to their listing agent and agree to pay the agent who brings them an acceptable offer – or not. If no commission is offered by the seller to the agent bringing and offer, they can either write one into the contract, work for free, or try to get the buyer they are representing to pay them directly. I have not met that buyer yet. It is still common for sellers to pay a commission to the buyers’ agent – but his must be spelled out explicitly.
Prior to the lawsuit, commissions in Thurston County (and surrounding counties in western Washington) generally were in the 5% range, After the lawsuit, I have seen 2% to the selling side offered quite a bit, however 2.5% is still common. Human nature, being just that, many agents will try to advocate listings with higher commission rates to their buyers. Listings with 0 dollars offered to the selling agent often receive phone calls for verification/conversation.
The main thing it that sellers have options and can negotiate with their agents. Buyers are made aware of their part of the commission issue when they discuss and sign a ‘buyers’ agency agreement”. This agreement (hopefully signed before a home is shown) spells out if the agency is exclusive or non-exclusive, what the agent’s duties are, if it is tied to a specific home or geographic area and exists for an agreed upon period of time.
If you are selling your home, I would not make finding the lowest commission rate a deciding factor. I would find the agent that you feel will best represent you and have a candid conversation. Just know that it is negotiable.
Olympia Real Estate Blog 