The law is very clear. Real estate brokerage commissions are negotiable between brokers and their clients. This is as it should be.

If you examine real estate broker advertising, you will find some brokers asking for a 6% commission, a few asking 1%, and everything in between. In Southern California, the vast majority of full-service brokerage firms ask for a commission of 5% to 6% of the selling price. Brokers can ask any amount they want, but commissions are always negotiable. Our firm generally charges from 4% to 4.5% of the sales price.

Real estate brokerage firms that take their professional and fiduciary duties seriously, know that it takes a great deal of time and patience to assist people in selling their homes for the highest possible price. Most agents understand that the sales price of a property is determined by the economic laws of supply and demand. The greater the demand, the higher the price. Most agents understand that maximizing the demand for a particular listed property requires its placement into the Multiple Listing Service (MLS) and sharing a reasonable commission between the listing and selling offices. This is what generates offers.

Often, discount brokers and agents are motivated to have their clients accept the first offer made because they are not getting paid a sufficient commission to spend much time representing the seller.

Facts About Many Discount Brokers

1. They get very few offers through traditional full-service real estate firms;
2. They rarely hold open houses, thus limiting the exposure of the listed home;
3. They rarely distribute flyers to the agents that are most likely to bring potential buyers;
4. They rarely attract the most knowledgeable, experienced agents, and often attract desperate agents who want the seller to accept the first offer made; and
5. They often refuse to utilize the MLS, and if they do, they won't offer a reasonable fee to cooperating agents, thus discouraging them from having their clients consider the property for sale.

While not all discount brokers and agents are the same, most full-service brokers and agents prefer to work with other full-service real estate firms such as Pacific-Realtors.net.