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Old 08-28-2015, 05:18 AM   #1
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Default odd real estate commission question

a friend has his house for sale. Listed by realtor no. 1. His friend who is also a realtor (#2) told him that realtor no 1 the listing agent has words to the effect that upon sale the listing agent realtor 1, gets 5% and the buyers agent gets only 1%.
And that condition is in some paperwork that is not "visible " to the seller, only to the realtors.
Can this be true?
If so no one will show his his house?

Last edited by edwardh1; 08-28-2015 at 06:09 AM.
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Old 08-28-2015, 05:52 AM   #2
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Commission split will be clearly defined in his listing agreement. It will also be on the MLS for other realtors to see. Either you friend got duped by realtor #1 or sour grapes by realtor #2 for not getting the listing. Either way, most realtors are idiots and/or scum. BTW I have a realtors license.
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Old 08-28-2015, 05:56 AM   #3
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Look at the listing agreement. If the listing agent wanted to make sure he was on both sides of the deal, this is entirely possible... however it will certainly hurt the seller as no one, except the listing agent is going to want to show the house.

In other words, what China Rider said... most (NOTE: MOST, not all) Realtors are scum.
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Old 08-28-2015, 06:20 AM   #4
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Commission split will be clearly defined in his listing agreement. It will also be on the MLS for other realtors to see. Either you friend got duped by realtor #1 or sour grapes by realtor #2 for not getting the listing. Either way, most realtors are idiots and/or scum. BTW I have a realtors license.
so by listing agreement you mean the paperwork between the seller and the listing agent??
NOT between the seller and a buyer??
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Old 08-28-2015, 06:33 AM   #5
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He may have wrote it into the contract with spy ink, only Realtors have the special decoder light.
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Old 08-28-2015, 06:44 AM   #6
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I think he misinterpreted the contract. If it's a 5-1 split no buyers agent will show the property.

What it probably says is 3% for buyers and sellers agents. If selling agent finds a buyer the total commission is 5%.
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Old 08-28-2015, 06:54 AM   #7
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Listing agreements do not always state, depending on state, split of commission. A buyer agent will see the commission split on the MLS. A buyer agent is also legally obligated to show that property like any other.

Buyer agents should protect themselves with a clause stating if buyers purchase any property that offers less than 2.5%, that the buyer make up the difference to get them paid to 2.5%

A listing agreement is an agreement between property owner and listing agent. A contract of sale is the offer/contract between buyer and seller.
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Old 08-28-2015, 07:14 AM   #8
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Listing agreements do not always state, depending on state, split of commission. A buyer agent will see the commission split on the MLS. A buyer agent is also legally obligated to show that property like any other.

Buyer agents should protect themselves with a clause stating if buyers purchase any property that offers less than 2.5%, that the buyer make up the difference to get them paid to 2.5%

A listing agreement is an agreement between property owner and listing agent. A contract of sale is the offer/contract between buyer and seller.
It's hard to believe that ANY state would not require the commission split to be clearly defined in the listing agreement, but maybe SC is different. It will certainly be on the MLS.

Legally obligated....That's funny right there.

Protect themselves? You mean enrich themselves. You wouldn't be my agent for very long if you tried to make me sign a clause like that.
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Old 08-28-2015, 09:47 AM   #9
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The listing Agreement is between Seller and Listing Agent and outlines the aggregate commission earned...

The Listing Agent will then have a co-brokerage agreement with realtor #2 which will detail the terms of the split ..
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Old 08-28-2015, 09:58 AM   #10
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when i was hocking homes the cost to the seller was 6%. 3% to selling agent (if different from listing) and 3% to the listing agent.

Then broker(s) involved take a cut...usually half.

so yes, it is possible that an agent could get as little as 1.5%.

I had a very hard time making money at it, which is why i don't do it anymore. average houses were 100k+/-...$1500 isn't much when you consider the time, travel and expenses.
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Old 08-28-2015, 03:16 PM   #11
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Protect themselves? You mean enrich themselves. You wouldn't be my agent for very long if you tried to make me sign a clause like that.
So I should do my job for free?
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Old 08-28-2015, 04:07 PM   #12
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So I should do my job for free?
My wife just fired a guy like that. He said he wanted her to pull through MLS, which she did and sent him the consumer link to the property, he contacted the listing agent himself, set an appointment to view the property with the listing agent. My wife found out, called him confused on what was going on, and he said "thanks for finding me the property, but I'm going to offer the listing agent an offer for her services at 4% instead of splitting 6% between the two agents so I'll get a better deal on the house". Which completely cut my wife out of the picture. Was a $600k home too. He said, if the listing agent doesn't except the 4% offer I'll put it and I will get you to find me another one for me! And to answer your question that I know you're getting ready to ask, there had not been a buyer broker agreement set up yet as he said he "wasn't ready yet". Then when my wife told him that she appreciated the kind gesture of using her, but that wasn't how she or the firm conducted business, she could no longer help him unless there was a buyer broker in place! He got pissed, yelled at her and then hung the phone up on her. Crazy to say the least, and don't mean to sound "whatever", but it seems that people that have a lot of money, are the worst at pulling this kind of BS. This is why agents get gun shy without even lifting a finger or even sending over ANY info until a buyer broker is in place. Those exact words came out of my wife's broker's mouth. I mean if they don't want to sigh,there is a good reason for it and you won't be the one benefiting from it if its not in place. Thank god my wife only spent 2 days on that douche bag. Lesson learned
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Old 08-28-2015, 04:17 PM   #13
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Two different things going on here.
First is the listing agreement which states the total commission and should state the listing agent's obligation to share that commission with buyer's agent.
Second is the MLS listing -- the service by which seller's brokers inform all the other brokers of their listings. In the MLS the seller's broker states what commission the buyer's broker is to be paid. It would not surprise me to learn that the seller's broker intentionally reported a 5-1 split, even if the listing agreement required 50-50. If he was caught, easy enough for him to say "ooops, typo", but if he isn't caught, the broker No. 1 could achieve his objective of making sure no other broker brings a buyer to the table. He may want to do that for a few reasons. Most likely, he wants one of his buyers to be the buyer and therefore doesn't want competition from buyers represented by outside brokers.
Secondly, he may want the house to languish on the market to the point that a friend (or relative) of his can buy it cheap. It is also possible that the seller wasn't sophisticated enough to make sure that his listing agreement specified a 50-50 split; it may be that the listing agreement also says 5-1.
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Old 08-28-2015, 06:24 PM   #14
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So I should do my job for free?
No, but my beef has always been, as the selling price gets higher and higher the commission percentage should get smaller and smaller.
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Old 08-28-2015, 08:52 PM   #15
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No, but my beef has always been, as the selling price gets higher and higher the commission percentage should get smaller and smaller.
Higher priced properties demand higher end/price marketing. Where does that come from? This is only from a listing side.

That said, a lot of properties above the 2-3mil figures do go down to a 4-5% listing commission.
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Old 08-29-2015, 05:44 AM   #16
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The part of the commission structure that always made it clear how much of a scam it was is as follows:

If the Realturd tells you that the house is worth $500k and you sign with her/him for $500k and 6% commission... that's fine.
Then the Realturd can't sell it for $500k and you lower the price to $450k... yet the Realturd only loses 6% of 50k. (YOU lose 94% of $50k!!) NOW... you've made it easy for them to sell, and they aren't impacted very much -- yet you are.

When I first listed my house with a Realturd I asked about a tiered commission (sell for x get y%, sell for z get z%, etc.)... and they wouldn't even talk to you.

Most of them (NOT ALL) are total con-artist trash.
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Old 08-29-2015, 05:56 AM   #17
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Originally Posted by OldPete View Post
The part of the commission structure that always made it clear how much of a scam it was is as follows:

If the Realturd tells you that the house is worth $500k and you sign with her/him for $500k and 6% commission... that's fine.
Then the Realturd can't sell it for $500k and you lower the price to $450k... yet the Realturd only loses 6% of 50k. (YOU lose 94% of $50k!!) NOW... you've made it easy for them to sell, and they aren't impacted very much -- yet you are.

When I first listed my house with a Realturd I asked about a tiered commission (sell for x get y%, sell for z get z%, etc.)... and they wouldn't even talk to you.

Most of them (NOT ALL) are total con-artist trash.

I have to disagree with you. Your house is only worth what someone is willing to pay. Its not the agents fault if you over price it and people aren't willing to pay that. That has NOTHING to do with the agent and their performance. And if the house gets listed at 450k but you think it was worth more but you agree to list it at 450k and it sells in 2 days......dont you think you would be saying " I KNEW I should have listed it at 500k"? Yeah you would, so why not ask 500k in the first place and then if no hits come around, then drop it to show you're a aggressive seller...? The reason they wouldn't talk to you is, they don't think its fair that you are trying to "use them" and pay them according to what your home is worth(your problems), and what the market may bring.
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Old 08-29-2015, 06:02 AM   #18
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To the OP:

Your friend should read his listing agreement and ask the real estate agency to print out a copy of the MLS listing for him to read. If he can't figure out the commission split, then have real estate agent #2 explain it to him.

If the commission split isn't spelled out in one of those two places or if they don't agree, your friend should sit down with real estate agent #1 and ask for an explanation.
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Old 08-29-2015, 06:06 AM   #19
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I have to disagree with you. Your house is only worth what someone is willing to pay. Its not the agents fault if you over price it and people aren't willing to pay that. That has NOTHING to do with the agent and their performance. And if the house gets listed at 450k but you think it was worth more but you agree to list it at 450k and it sells in 2 days......dont you think you would be saying " I KNEW I should have listed it at 500k"? Yeah you would, so why not ask 500k in the first place and then if no hits come around, then drop it to show you're a aggressive seller...? The reason they wouldn't talk to you is, they don't think its fair that you are trying to "use them" and pay them according to what your home is worth(your problems), and what the market may bring.
Whut?
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Old 08-29-2015, 06:26 AM   #20
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I buy and sell property all the time. When a realtor brings me an offer less then I wanted I make them kick in some of their commission toward the discount they want me to give the buyer. They do it everytime. So demand it next time a realtor tries to get you to go lower on your selling price.
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