BajaNomad - Realtor commission %

Realtor commission %

bajafreaks - 4-10-2015 at 10:45 AM

Contemplating on selling my lot, after talking to a local realtor I'm told the going rate is 10% commission. I know this is negotiable but is the starting point now 10% rather than the common 6% ? Then there's the IVA tax and capitol gains, makes it a little pricy to sell a piece of property in Mexico.

Terry28 - 4-10-2015 at 11:04 AM

10% is common for raw land. 5-6% is for homes...of course everything is negotiable...start low....

Lee - 4-10-2015 at 11:32 AM

Quote: Originally posted by bajafreaks

Contemplating on selling my lot, after talking to a local realtor I'm told the going rate is 10% commission. I know this is negotiable but is the starting point now 10% rather than the common 6% ? Then there's the IVA tax and capitol gains, makes it a little pricy to sell a piece of property in Mexico.

I assume since you own land, you have at least some experience with MX RE transactions. Don't choose an agent based on lowest commission. 10% is traditional and for a top agent, I believe you'll get your money's worth.

The agent selling my land in Todos is a MX national gringo, fluent in Spanish and knows contracts, notaries, and all the other local agents and respected by them. I like and trust him explicitly.

If IVA, capital gains, and commission will leave you with less equity, and that's the cost of doing business. Your motivation determines how much all of this is worth to you.

Some agents are worth 10%, some less, some more. I'd talk with several agents, do a informational interview, determine how motivated they are (getting your listing), how they'll market your land, see if you ''click'' with them. I vetted my agent originally and did updates (down the road) to see how he was perceived in the community and what his reputation currently was. All good.

DianaT - 4-10-2015 at 12:19 PM

NEGOTIATE --- 10% is really quite outrageous UNLESS the agent handles everything with the notario, gets all the paperwork from the municipality, etc., writes up the initial contract, then they probably earn it on land --- not on a house, however.

But some want to charge 10% for doing no more than throwing the lot on a web page and then turn everything over to someone else to do all the work, and you could do that.

Negotiate and be sure the agent actually knows something about real estate as some only know how to collect money and are clueless. And they are apt to tell you anything.

Negotiate, negotiate. Even in the states, there is no such thing as a "normal" or going rate. It is all negotiable. Just be sure they will actually earn their money.

There are good ones, and then, well then there are the others.

[Edited on 4-10-2015 by DianaT]

bajafreaks - 4-10-2015 at 12:31 PM

We're going down in a few weeks and plan to talk to a few agents. The one I spoke with is probably the top producer in the area has been there a long time.
Lee I like your statement "your motivation determines how much all this is worth". Our plan was to build on the property but seeing some of the great deals to be had on existing homes we're toying with the idea of using the money from the lot sale and putting it toward a house purchase since the price of construction would actually be higher. Just need to weigh all of the options.

[Edited on 4-10-2015 by bajafreaks]

[Edited on 4-10-2015 by bajafreaks]

bezzell - 4-10-2015 at 12:48 PM

Quote: Originally posted by bajafreaks

Then there's the IVA tax and capitol gains, makes it a little pricy to sell a piece of property in Mexico.

fyi ... I believe there's no IVA tax when selling land / residential. (Yes on commercial)
(But there is IVA on the agent's commission. (Agree w/ Diana re 10% !!))

brief IVA talk here ... http://www.bajainsider.com/baja-business/taxobligationsmexic...

scroll 7/8ths down this page to "Costs and Taxes when Selling a Mexican Property" .... http://www.mexperience.com/property/buying-selling-real-esta...

but, things can change ! (maybe someone knows the latest?)

durrelllrobert - 4-10-2015 at 03:07 PM

Mexican Realtors deserve bigger commissions than those in the US because they have to study and go to school so much longer in order to be licensed by the municipality (not to mention the bribes they have to pay to keep out of jail). :spingrin:

gnukid - 4-10-2015 at 09:17 PM

CC be careful, talk to someone else

Bob and Susan - 4-11-2015 at 06:15 AM

does it really matter what the commission is
if you are happy with the net $$$ at the end of the sale?

maybe a sliding commission the longer the agent lists the property.
ex: 15% first 30 days...10% first 60 days...5%
limit contract

I would ask for a written marketing plan with performance guarantees

It's actually worthless to limit it to a realtors website or craigslist.
Craigslist is for the "low-end" sellers and buyers...most are looking for low-end or almost free sales.

The realtor needs "real contacts" and a plan

DENNIS - 4-11-2015 at 06:35 AM

Another thing.....find out any way you can how much your realtor is offering your property for sale. It used to be common here for realtors to offer it at a price far exceeding your sale price, and keeping the excess.
Of course, the higher the price, the fewer viable prospects there will be, but your realtor has nothing but time and can wait forever if necessary.

monoloco - 4-11-2015 at 06:58 AM

The Todos Santos realtors have conspired to set the commission at 10%. Any realtor who charges less gets booted from the MLS.

Katiejay99 - 4-11-2015 at 07:05 AM

Yes and there are Realtors who are not on the MLS because of that so don't think that the only properties available are those listed on the MLS because we have some awesome Realtors who could be called "independent".

J.P. - 4-11-2015 at 08:38 AM

Quote: Originally posted by Katiejay99

Yes and there are Realtors who are not on the MLS because of that so don't think that the only properties available are those listed on the MLS because we have some awesome Realtors who could be called "independent".

The term REALTOR is copy righted and can only legally be used by some one that is a member of the Board of Realtors.
If you are not a member you are a Real Estate Agent, :yes:

But this is MEXICO and you can call yourself anything you want to. :lol:

[Edited on 4-11-2015 by J.P.]

bezzell - 4-11-2015 at 10:01 AM

Quote: Originally posted by gnukid

CC be careful, talk to someone else

Nice job. Now she understandably bailed, preventing real world examples to be shared. :rolleyes:

Tioloco - 4-11-2015 at 10:21 AM

Real estate fees are worth whatever you are willing to pay. Just like any other service. They make nothing for their time if it doesn't sell.

cabobaja - 4-11-2015 at 10:54 AM

Mono, do not feel you know what you are speaking of.

Todos Santos MLS commissions:
Up to $150,000 10%
$150,001-$300,000 9%
$300,001-$600,000 8%
$600,001-$2,000,000 7%
Over $2,000,000 6%

monoloco - 4-11-2015 at 04:23 PM

Quote: Originally posted by cabobaja

Mono, do not feel you know what you are speaking of.

Todos Santos MLS commissions:
Up to $150,000 10%
$150,001-$300,000 9%
$300,001-$600,000 8%
$600,001-$2,000,000 7%
Over $2,000,000 6%

But basically the rates are non-negociable if a realtor is in the MLS. Correct?

DianaT - 4-11-2015 at 04:31 PM

Quote: Originally posted by monoloco

Quote: Originally posted by cabobaja

Mono, do not feel you know what you are speaking of.

Todos Santos MLS commissions:
Up to $150,000 10%
$150,001-$300,000 9%
$300,001-$600,000 8%
$600,001-$2,000,000 7%
Over $2,000,000 6%

But basically the rates are non-negociable if a realtor is in the MLS. Correct?

Some Realtors in the states will try and tell you that and it is garbage. They would all like you to think it is etched in stone.

BTW-- I was a Realtor in one of my past lives.

monoloco - 4-11-2015 at 04:53 PM

Quote: Originally posted by DianaT

Quote: Originally posted by monoloco

Quote: Originally posted by cabobaja

Mono, do not feel you know what you are speaking of.

Todos Santos MLS commissions:
Up to $150,000 10%
$150,001-$300,000 9%
$300,001-$600,000 8%
$600,001-$2,000,000 7%
Over $2,000,000 6%

But basically the rates are non-negociable if a realtor is in the MLS. Correct?

Some Realtors in the states will try and tell you that and it is garbage. They would all like you to think it is etched in stone.

BTW-- I was a Realtor in one of my past lives.

From what I understand, it is set in stone. If a realtor agrees to cut their commission, they get booted from the MLS. In the states, I believe it would be called "price fixing".

DianaT - 4-11-2015 at 05:12 PM

Quote: Originally posted by monoloco

Quote: Originally posted by DianaT

Quote: Originally posted by monoloco

Quote: Originally posted by cabobaja

Mono, do not feel you know what you are speaking of.

Todos Santos MLS commissions:
Up to $150,000 10%
$150,001-$300,000 9%
$300,001-$600,000 8%
$600,001-$2,000,000 7%
Over $2,000,000 6%

But basically the rates are non-negociable if a realtor is in the MLS. Correct?

Some Realtors in the states will try and tell you that and it is garbage. They would all like you to think it is etched in stone.

BTW-- I was a Realtor in one of my past lives.

From what I understand, it is set in stone. If a realtor agrees to cut their commission, they get booted from the MLS. In the states, I believe it would be called "price fixing".

It would be interesting if the MLS is price fixing in Baja --- that would be interesting.

Lee - 4-11-2015 at 06:47 PM

Quote: Originally posted by DianaT

Quote: Originally posted by monoloco

Quote: Originally posted by cabobaja

Mono, do not feel you know what you are speaking of.

Todos Santos MLS commissions:
Up to $150,000 10%
$150,001-$300,000 9%
$300,001-$600,000 8%
$600,001-$2,000,000 7%
Over $2,000,000 6%

But basically the rates are non-negociable if a realtor is in the MLS. Correct?

Some Realtors in the states will try and tell you that and it is garbage. They would all like you to think it is etched in stone.

BTW-- I was a Realtor in one of my past lives.

Not sure if the references here are NOB or SOB. NOB, any agent implying, hinting or suggesting that commission fees are anything but negotiable would be putting their license on the line. Off the record, agents might admit to ''going'' fees. In my former office, percentages were ''standard'' and a Listing would, generally, be turned down if a Seller was firm in a lower fee.

SOB anything goes and if every agent in Todos agrees to fix fees at a certain percentage, it's perfectly legal.

NOB 7% was the going rate for residential back when. That was sometimes negotiated to 6% but never lower (generally and in the offices I worked in). Land was 10%. Agents I knew never took a Listing for less than 6%.

I too was a Realtor, once, and a Broker/Owner.

Gaucho - 4-12-2015 at 09:26 AM

Sellers are WAY too focused on the 10% fee rather than the 90% they will be netting. Once you have agreed upon a fair commission let it go and save the negotiating for the sales transaction itself. You will double or triple what you would have "lost" paying a higher fee to the listing agent.

gnukid - 4-12-2015 at 10:07 AM

It IS reasonable to pay attention to details-from commission, all taxes, notario interpretations of your cap gain tax due, fees etc... Agents have no reason to work for your benefit and every reason to work for their own benefit. They also have no incentive to be reliable, prompt because they aren't being paid based on performance detail. The only one who is concerned about the cost vs performance is the buyer. Worse there is no standard, no training, no testing of the "agency" role.

Take time to get a breakdown well in advance of contract of expected costs then validate and work these costs down, go meet notarios about cap gain settlement and build a relationship with a notorio who is educated and communicative, and willing to make an effort to show you they know what they are doing, they need to know you, and be willing to work for you, then you specify the notario along with the buyer, not the agency.

Be realistic, incompetency, unreliability, and corruption is as common as not. They have no reason to have your best interests so it is up to you to manage your interests-as you would anywhere else in your life. It's your money.

[Edited on 4-12-2015 by gnukid]

Listing%

J.P. - 4-12-2015 at 10:10 AM

The listing % can be confusing to the average buyer there is a whole lot of real estate sold where the selling agent gets only 1.5 %
The only time someone gets the full commission is when the listing Broker sells his own listing.
The secret of the trade is getting listings. Someone will sell it.
and I agree listing fees are pretty much a wash. You sell You Pay. You buy seller Pays.

And contrary to popular belief when you are the buyer the agent is not working For You. he is employed by the SELLER.

[Edited on 4-12-2015 by J.P.]

[Edited on 4-12-2015 by J.P.]

bajafreaks - 4-12-2015 at 10:31 AM

Thanks everyone for all of the input. I don't have a problem paying 10% especially if I get good results. I just need to figure out what is the best plan to ultimately having a home in Baja.

MitchMan - 4-12-2015 at 12:42 PM

Can a knowledgeable/experienced Mexican accountant or attorney reliably handle the details of the sales transaction and leave all of the marketing up to the seller? That way there is no commission, only fees to a trained educated professional instead of a commission to an uneducated, unlicensed, unregulated, unlicensed, self-dealing real estate agent?

wessongroup - 4-12-2015 at 01:32 PM

Dittos MitchMan ...

gnukid - 4-12-2015 at 05:47 PM

+ mitchman

adding a so called non-agent in the mix is just a delay and a added cost