Paying the Realtor's Commission

Who pays the Realtors Commission when you purchase a property as a buyer?  Typically the Seller pays all commission to both the listing agent, who he hired to market and sell his home and to the agent that brings the buyer for his home. A typical Real Estate commission is anywhere from 5 to 7 percent for residential. In Commercial it is typically from 6-10%. All Commissions are negotiable at time of signing the listing agreement.  I have noticed that many seller ask the agent if they will do it for 5% and the listing broker agrees to the 5% but then they want to split what they have agreed to with the selling agent. Many selling agents are compensated 3% regardless what the listing agent has agreed to. Because the listing is competing against other listings on MLS that are paying 3% or better to the selling agent to sell their home, Townhome, condo, etc. What the Seller does not realize in most cases that they are being penalized by the listing agent as the listing agent wants to split the reduced rate commission and probably do a reduced effort job. I personally do not agree with this and I will not work for less than 3% on the selling end. I would never expect a selling agent to take less and penalize the sellers chances of selling it. I personally write a compensation agreement which is prepared and sanctioned by the South Carolina Association of Realtors to use whenever compensation is an issue.

If the listing agent is going to take the listing at 5% then he needs to take the hit on his commission. Then that may stop them from this bad habit of giving away 1/2 percent of a hard working agents pay. The seller signs the listing agreement but never sees the MLS data that the Realtors see when the listing hits MLS. They do not know that an agent can eliminate from their search those properties that will pay less than 3%. In fact some sellers and wise listing agents encourage the sellers to pay a 1/2 percent more to attract a buyer's agent. On a $200,000 sale that amount to an additional $1000. Do you think a seller would be willing to pay a half a percent more or $1000 on this $200,000 sale to a Buyers Agent to get his home sold quicker? In many cases that is as much as 1 additional house payment the Buyers agent would save the seller.  

You get what you pay for. That is always a true fact.

  Don't cut your nose off to spite you face.  

Call Pat Broghamer if you want a professional to sell, to buy or to get a referral from for your family member or friends anywhere in the world. Pat can help you. 843-725-8095  www.charlestonscluxuryrealestate.com 

Trackbacks (0)

Comments (0)