I realize the original thread is a year old. But as someone who has sold and bought a house in the last year, I have really been struck about how real estate selling/buying has changed over the recent years but how agents are compensated really hasn't. When I first bought a 30 years or so ago, things really were different. For example, in buying a house I used to expect the agent to find houses for me and send me information on houses for me to choose to look at. Nowadays I just never do that. At most the agent will set up a search to my specifications, but, really that search didn't find anything I didn't find through the searches I made through MLS. I am bemused at times when I see people talking about agents not showing flat fee listings, etc. From my standpoint, I don't quite see how that would work since I'm the one (as buyer) who tells the agent which house I want to see... I also think that with all the computerization in my instances the buyer's agent spends more time helping the buyer find a house than the seller spends selling the house. It doesn't bother me that the selling agent usually doesn't show the house -- there is no particularly reason to expect them to personally find the buyer. Still when I think back to the last couple of houses that I sold and the last couple of houses that I bought the buyer's agent spent more time than the listing agent spent. I understand the concept of the 6% fee. Those who sell compensate for all those who don't sell and the more expensive houses compensate for the less expensive houses. It is not too dissimilar to the contingency fee that an attorney might get for an auto accident case where that fee compensates not just for the one case but really for all the cases where there was no recovery or only a small recovery. It does seem strange though that -- unlike other fields -- in real estate the model for how agents are compensated and the amount of the fee hasn't changed.

"The printed portions of this form, except differentiated additions, have been approved by the Colorado Real Estate Commission. (LC50-10-06) (Mandatory 1-07)" Above are the 1st 2 lines in the contract, note the word "mandatory". Ask if itÂs a standard approved Colorado contract, if not, IÂd have an attorney review it and probably report the agent to here: http://www.dora.state.co.us/Real-estate/consumer/index.htm As to commission and closing cost, you probably pay first the commission off the sales price (ie. $135,000-5%=$128,250-$4,000 closing cost=$124,250). If you were to pay the closing cost first and than the 5%, you would save $200. It all depends on how your listing contract and purchase contract is written. Here is a link that might be useful: DORA Consumer Corner

I haven't heard any agent refer to a standard commission, in real life or on this forum; the references to standard or normal have come from other, non-Realtor, posters. There *is* such a thing as an office standard or policy for commissions; if your agent's broker says she may not list a property for less than, say, 10%, she cannot contract to work for a lower fee. & I cannot imagine a situation in which any group of Realtors got together & agreed on anything more complicated than where to have lunch, much less to "boycott" *anything* or to violate a law; there's just too much potential for disaster. If you're offering a low commission (you yourself must determine what's "low") to a buyer's agent & your property isn't being shown, the low commissin might indeed be a factor, one which the buyers & their agent will have discussed & agreed on, but it's a decision made by the buyer & the buye's agent, not by some sort of cartel. .

The downside to not having a buyer's agent is that you have to DIY with regards to finding a property, evaluating comps, negotiating the deal and completing the paperwork. None of this is rocket science, but there are some pitfalls to be aware of. The significant upside to not having a buyer's agent is that in multiple offer situations, the seller's agent is likely to advocate on your behalf with the seller because the seller's agent makes more money if you are the buyer. If not comfortable completely doing it yourself, I would suggest searching the properties yourself and then involving a buyer's side agent for the specific property in question while being sure to negotiate a rebate from the buyer's agent to you given that you have already done the time consuming search process yourself.