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Realtor commissions - how much and how divided?
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Anonymous
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It really depends on the situation. The way it normally works, the seller enters into the listing agreement with the seller's agent. Agent gets - let's say - 6% commission and agrees in the listing agreement to split it with the buyer's agent (so 3% to each). If the buyer doesn't have an agent, the seller's agent technically gets the full 6% commission.
UNLESS as a buyer, you essentially get the seller's agent to agree to relinquish the 3% buyer's agent commission. This is what we did (as buyers with no agent). Seller's agent agreed to only take the 3% commission so it made our offer that much sweeter. Keep in mind, the house was over $1M to begin with and had been sitting for a while. Seller's agent really wanted to sell or they were close to losing ALL the commission (as listing period was going to run out). Otherwise, the Seller's agent does not have a lot of motivation for doing this. |
Anonymous
Huh? How is being a buyer who doesn't use an agent being a "cheap pain in the ass" when they negotiate with the seller's agent to relinquish the buyer's agent commission? There is NO BUYER'S AGENT? So what you are saying is that - under that scenario - seller's agent should get a windfall. As a buyer who does not have an agent and who had the seller's agent agree to only a 3% commission, I can tell you that I would have been a FOOL to NOT negotiate with the seller's agent to relinquish the fee. Why should the seller's agent get a 6% commission for doing the same work as she would normally do for a 3% commission? Plus, as a buyer without an agent, I (myself) am doing a good deal of extra work and taking on extra risk that I would not have taken on if I had an agent. On a $1M house, the 3% that is relinquished and in effect goes back to the seller is real money and helped us (as buyers) negotiate a lower sales price and get closing costs. Quite frankly, any buyer without an agent who doesn't negotiate the buyer's commission to be relinquished by the seller's agent is a complete idiot. Oh - an dI call big BS that you aren't an agent... |
Anonymous
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If the listing agent agrees to modify the terms of the commission (e.g. reduce commission from 5% to 2.5% because no buyer's agent involved), is that really a "kickback?"
I'm asking because I thought there were a lot of kickbacks going on during the crazy boom, and I thought I read that most were illegal. Kickbacks between realtors and title companies, kickbacks between realtors and sellers/buyers, kickbacks between sellers and buyers. For example, wouldn't it be an illegal kickback for the realtor to keep the full commission and then "refund" that 2.5% to the buyer on their own? Perhaps under the guise of something else...or perhaps as a straight check. Did that stuff happen during the crazy time of the market? Basically, keeping the price inflated on "the books." I'm thinking the motivation would be to just keep prices high in the overall market? (higher prices benefit all the realtors given commission pay is based on sales price.) |
Anonymous
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16:05 again. Want to clarify end of my first paragraph:
Is it really a "kickback" if the sales price is then adjusted downward to reflect the reduced commision? |
Anonymous
I used the word originally. I didn't mean it in the sense you are using it, as a perjorative term. |
Anonymous
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I'm the PP whose is a buyer without an agent, who got the seller's agent to agree to relinquish the 3% fee that would normally go to the buyer's agent.
I have no idea where the idea that this is a "kickback" came from. The seller and the seller's agent simply modified their listing agreement to make clear that - in the case of no buyer's agent - the seller agent's commission would be reduced to 3%. So it made all offers by buyer's without a buyer's agent more attractive (though admittedly, ours was the only one with no buyer's agent). FWIW - the Seller's agent happily agreed to this (but again, our circumstances were such that the agent just wanted the place sold). Not sure how this could possibley be considered a kickback... I think kickbacks occurred during the height of the market when a buyer would pay a "kickback" directly to the seller's agent to get some kind of special treatment... |
Anonymous
You are either an agent, married to an agent, stupid, or just plain nuts. You want an agent to get 6%, half of which should have gone to someone acting on the buyers' behalf, for doing nothing? And the answer is yes, people are always trying to save money in every field. But they should particularly seek to do so in a field which involves agents doing half as much as they did 10 or 20 years ago (thanks to computerization/the internet), for many times more money (thanks to house price appreciation). |
Anonymous
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Kickback=rebate
Commission rebates are legal in most states including the District of Columbia, Maryland and Virginia. Redfin and other brokers have been providing rebates for years. |
Anonymous
| The average commission in the Washington, DC area is 5.06%. The seller's pays that amount to his agent (this listing agent) who in turn decides how much to offer the buyer's agent. Typically it is split evenly, but not always. In today's market the seller's agent should NOT get more under any circumstances. |
Anonymous
Just curious, what makes you say that? |
Anonymous
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One word if you are a buyer who does most of the work yourself anyway -- REDFIN. You'll get a portion of that "buyer's agent" 3% back to YOU at closing.
* not an agent, married to an agent, or otherwise involved in the real estate industry except as a normal buyer/seller. |