We don’t have real estate attorneys in residential real estate transactions. I’ve purchased a few FSBOs for my business and we use an escrow company. I believe escrow companies replace attorneys in California transactions. Escrow companies charge a percentage of the transaction which always irked me a lot because my transactions are all cash, No banks, no loan payoffs, etc. I tried negotiating with my favorite escrow company for a flat fee per transaction but they wouldn’t budge. Claimed they were regulated or company policy or something.
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Same in WA.
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Escrow fees are negotiable, especially when you do comparison shopping. Also, if you do enough transactions, then they do offer a builder/bulk rate.
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If we were going to sell our townhome in the market right now in San Diego I would definitely negotiate the fee with any realtor we chose. We live in a highly desirable location with zero inventory. I get at least one letter and one phone call a week asking if we want to sell our place. I would not want to pay the full percent most realtors are asking for in this market.
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I would imagine there are two types that do FSBO:
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People who are cheap, and are cheap in all aspects and the house reflects it
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People who want a good value…that spend time and effort doing the real estate work themselves
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What is the typical real estate commission ? (I assume 6%.)
Does the usual real estate commission vary by market and / or by asking price (such as homes asking $1,000,000 or more at 5%) ?
Do any realtors still charge / earn 7% commission ?
6% is the going rate here split 50/50, but lately I have seen 2 or 2.5% on the buyer’s side advertised on the web. Seller’s agents usually take 3%. In my neck of the woods, there is no huge difference between marketing of a $1M house and a $2M house… but the latter nets the agent 2X dollar amount. For about the same amount of work.
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The typical realtor’s commission rate here in the SF Bay Area is 5%, split 2.5%/2.5%. However, some sellers and their agents may offer the selling (buyers) agent an additional 1/2% to sell a more difficult property.
The really expensive homes, in the range of $5MM to $20MM (and more), the commission rate may be much less, say 4% +/-.
But be sure, the higher the commission rate, the more motivated the buyer’s agent will be in showing the property to their buyers.
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We sold our house in the Chicago suburbs directly to a developer using a real estate attorney. I had been following the tear down market in our area for years, knowing the time would come. We did have a Realtor check out the house first, and she agreed that we would be better off with a developer than trying to list and sell. And it was highly likely that any buyer would be tearing down and rebuilding anyway. (I used to say the house was tearing itself down.)
I contacted at least a dozen local developers and one of them said he’d pay $5000 over our best offer (we were in a highly desirable tear down commuter town). He did, and agreed to a six month rent free post possession agreement. So it worked out beautifully. No repairs, upgrades, showings, negotiations, etc. And six months to find our new home and move.
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Not sure, but I believe that real estate agents are rated / ranked based on dollar volume sold. If I am correct, then realtors have an additional incentive to show high priced homes even though the commission may be a point less than normal.
There’s definite “good value” in having an agent. From the seller’s perspective, the listing realtor will have “a nose” for good and bad buyers. What is a good POF (proof of funds) and/or the difference between “loan approval” and a “loan pre-approval.”
Skilled at the art of negotiation. Is able to prepare a property for sale and market it properly to the proper segment of the market. Knows what’s legally required and what’s purely extraneous, in terms of paperwork, title, escrow. And if a deal falls apart, can put humpty-dumpty back together again.
And the big one nowadays, one for the buyer’s realtor, a good realtor can and will help make sure the buyer isn’t sending their money to wrong place. Wire fraud is a huge problem nowadays.
These are just a few things a realtor with "good value’ can add.
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We are looking to downsize and definitely feel there is value in having a realtor, but not close to 6 percent. We also plan to FSBO and I am surprised more people do not attempt it to begin with. Perhaps we will be proven wrong, but the market is pretty hot here and if the home does not go within 2 to 3 months we will find a realtor.
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Here in CA, it’s lots and lots of legal forms. Numerous legal disclosures alone can be in the dozens.
In fact, in order to enter an open house, all entrants are required to sign a PEAD aka Coronavirus Property Entry Advisory and Declaration form.
Bring hand sanitizer, masks and booties at the door. 
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One recent story that I’ve heard is the seller entered into a sales agreement with a buyer on a property near the beach and Pacific Ocean. The seller didn’t disclose the fact that the ocean, fish, seaweed, pigeon poop, sand, etc., can, on a few days of the year, smell.
The property disclosures are very detailed, but the “ocean smells” wasn’t spelled out. Buyer backed out for the non-disclosure because the buyer didn’t like the ocean smell. Transaction fell through.
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In my state, the seller would have happily pocketed the earnest money and continued to market the property. Because our state Supreme Court strongly favors sellers in situations where “should have known better” applies.
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Here in CA, the buyer could have filed a claim (lawsuit) for deposit money and tied up the property for a good long while for non-disclosure.
And the Seller wasn’t “damaged,” since there were a few buyers waiting to be in first position. Property was sold and the seller only “wasted” less than a week’s time.
I’m sure there is more to that story than someone walking away due to seaweed stench. 
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Buyers in WA, beware.
https://www.helsell.com/2019/09/19/buyer-beware-is-still-the-law-of-the-land/
When we bought our San Diego house, the disclosures included not only the fire station and airport nearby and the ocean a mile away, but also that there were dogs in the area that might bark. It did not disclose the day care center kitty corner behind us, which honestly was more annoying than the planes flying by. We learned later that it hadn’t been in operation long, and lasted only a couple of years.
I can’t remember if the disclosure included the very noisy wild parrots, which are so ubiquitous that they are used in local marketing.
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I’ve actually talked to three people familiar with that particular transaction and they all confirm the story.
Now the buyer may have made up the “ocean smell” story to get out of the transaction, that I don’t know.
Yes, if really true, and that was the buyer’s true reason, then it’s dumb IMO. The house is obviously near the ocean. Imagine if a whale decided to beach itself. 
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