How much should I pay to the agent?

[Luxmal]

I am working on over 400 units (300 single, 130 townhouse) development project now, trying to figure out how much I should pay to the inside salesman and buy's agent? Anyone could give me a rough idea? Thanks in advance

 

[jonathanb]

A case of beer should cover it

 

[Luxmal]

[quote user=jonathanb]A case of beer should cover it




The owner would be very happy with that arrangement.



Somebody mentioned to me 2%. Not sure it's normal rate.

 

[Mike Milovick]

I would look to your market place for guidance.



If your market place is what mine is, you pay for what you get. i.e. you pay bananas, you get monkeys.



You should have a peak at what similar projects are paying for buyer agent co-operation. It doesn't make sense to pay 2% if the going rate is 3% - or 1% for a buyer agent.



Also, note that having an inside salesman should probably entail a lower commission if you will be handling the promotion etc.



Canvas the developments in your area for guidance. Your inside salesman could already be at one of these sites...



Mike

 

[Thomas Beyer]

Around 3% in a normal market. More in a slow market (say 1-2% more). A little less if it sells it self, i.e. super-hot market.



It also depends on your marketing budget. In Vancouver 10% to 12% of price for reps (both buyer and seller) and marketing is not uncommon.

 

[Luxmal]

The market was hot years ago and slow down a little right now. But I lowed the asking 5-10% lower than current market price, try to make quick sales.



How about this commission structure? Is it reasonable?



1, sales with buyer's agent, full commission for buyer's agent, 1% for seller's agent



2, sales without buyer's agent, 2% for seller's agent



3, the developer pay all the marketing cost.