[Selling house, what is the appropriate realtor's commission?]

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Pizza1945
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[Selling house, what is the appropriate realtor's commission?]

Post by Pizza1945 » Tue Mar 19, 2019 1:57 pm

[Split into a new thread from: The lawyers who took on Big Tobacco are aiming at Realtors and their 6% fee --admin LadyGeek]

Hello. My ex is my realtor and I would like your opinion.

When I sold previous house and purchased current home several years ago, he (my ex) was Not my realtor and of course I did pay the 6%.

Sorry if I’m not clear regarding the numbers but I have not had my initial meeting yet with him in regards to listing my current home and buying a new home.

We are on friendly terms and I trust his judgment in the financial issues of buying and selling homes. I am definitely going to negotiate commission if /when he sells my house (if I give him my listing. )

The commission here is 6%.
In past, He has told me that the broker gets a certain percentage(I think half of what he gets), and if another agent brings in the house buyer, that office gets 3%. I think he is left with 1.5 % . What do you suggest % to negotiate in my favor?

If he shows me a house, and I purchase it, what commission is he entitled to? Another 1.5%? (I will need to clarify this but currently I am under the opinion the ‘minimum’ he could make on this deal would be 3% ). (I probably should have waited till after our appointment next week to post this, but I would like to have my thought process ready before we have our initial meeting)

As always,Thank you for all and any comments.

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Re: [Selling house, what is the appropriate realtor's commission?]

Post by LadyGeek » Tue Mar 19, 2019 6:33 pm

Pizza1945 - I moved your post into a new thread so we can discuss your situation directly.

(Please do not continue the locked thread discussion here.)
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Re: [Selling house, what is the appropriate realtor's commission?]

Post by drawpoker » Tue Mar 19, 2019 7:14 pm

You describe your ex as a "realtor", not a broker. The distinction makes a world of difference in how the commissions are split.

In most nearly all states, agents (realtors as you call them) are only allowed to work under a B.I.C. (Broker-in-charge)
Unless your ex has his broker's license and is working solo (very, very rare to see these days) the office he works under is going to take their cut. Real estate agents are presumed to be working under the licensure, i.e., supervision, of the BIC to ensure that everything is done according to Hoyle.

Where that 1.5% you are referencing would be in offices where the financial arrangements are such that that 3% commission that the listing office receives upon the sale (meaning an agent from a diff. office brought in the contract) the office splits it 50-50. However, there is no hard and fast rule about this - I have seen 75%-25% splits.

Now, say for another ex, Agent A lands the listing, and hard-working Agent B from the same office, brings in the sale.
There is a big pot, the full 6% coming in. How would that be split? Again, it varies among realty offices. And, pertinent to your case, this is actually proprietary company information, and your ex has no legal obligation to disclose it to you.

"If he shows me a house, and I purchase it, what commission is he entitled to? "


Again, too many variables here to give you a pat answer. Unless you are planning to only consider buying houses where he holds the listing? (Bad idea, he cannot make any offer to lower his commission without approval from his BIC)

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Pizza1945
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Re: [Selling house, what is the appropriate realtor's commission?]

Post by Pizza1945 » Sun Mar 31, 2019 10:32 am

Another question re real estate commission: (Note: no agreements have been signed yet with my realtor (ex husband).

I am trying to figure out a fair “negotiation” commission % before I sign, and could use insight and help. (I will be negotiating for several good reasons - and do recognize his real estate knowledge and professionalism ).

He has his ‘broker license’ but no longer his own office and works out of another broker’s office (real estate franchise).

In reference to comm % splits, I m sure you will say there is no way of knowing answer without asking him, but I don’t think it’s okay for me to ask.

Since he has his ‘broker license’ do you think he receives same “office commission split” as other agents in office, Or a more favorable split for him since he is a broker?

There is 6% commission for my listing. (Probably 3% for office and 3% for my agent). I was thinking of asking him to split his 3%. [50/50 ] with me.

And if I purchase a house thru him, he will get at least 1.5 %. (Maybe 80/20 him/me?)

Would sincerely appreciate input, comments. Thank you.

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Re: [Selling house, what is the appropriate realtor's commission?]

Post by euroswiss » Sun Mar 31, 2019 4:32 pm

While there is room for negotiation, typically, the 6% commission for the sale of your home is split 50:50 with the buyer's agent. So, if your ex-husband lists the property, his brokerage will likely pay 3% to the buyer's agent brokerage and keep the other 3%. That 3% is then split between your ex-husband's brokerage and your ex-husband. The exact split depends on the contract between your husband and his brokerage, but he might get to keep 1-2%. That is really the only piece he can negotiate with YOU. Say, he gets to keep 1.5% and the brokerage takes 1.5% then your ex-husband can, if he so decides, give you his entire 1.5% (probably unlikely?), or some fraction of it. Say, you end up splitting it evenly with him, i.e. you'd get 0.075% and he keeps 0.075%. Depending on what the salesprice is of your property, this may or may not work for him. If we are talking a $50'000 property, then 0.075% ($375) will not even cover his fixed expenses, let alone his time. On the other hand, if it is a $2 million property, her may be quite happy with with 0.075% ($15'000).
So, back to your question: what is fair? Well, whatever the two of you can agree on is fair.

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unclescrooge
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Re: [Selling house, what is the appropriate realtor's commission?]

Post by unclescrooge » Sun Mar 31, 2019 4:56 pm

I paid 1% to the listing agent and 2.5% to the buyers agent when I sold my house in late 2016.

Of course, this was on a million dollar plus house. If it was a $100k house, maybe I would pay the full 6%.

How he splits his commission is not your problem.

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Re: [Selling house, what is the appropriate realtor's commission?]

Post by jfn111 » Sun Mar 31, 2019 5:12 pm

In our Brokerage we have to offer the Buyer's agent at least 2.7%. So... anything above 2.7% is negotiable. If he's helping you sell and buy he should cut you a deal on the sell side. When I helped the kids sell and buy I sold their house for a 2.75% commission. (That about covered the photo's and sign placement.) I got 2.7% on the purchase of their new house and used that to pay for a new roof on their house.

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Pizza1945
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Re: [Selling house, what is the appropriate realtor's commission?]

Post by Pizza1945 » Sun Mar 31, 2019 5:50 pm

Thank you all!

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SmallCityDave
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Re: [Selling house, what is the appropriate realtor's commission?]

Post by SmallCityDave » Mon Apr 01, 2019 9:37 am

Pizza1945 wrote:
Sun Mar 31, 2019 10:32 am
Another question re real estate commission: (Note: no agreements have been signed yet with my realtor (ex husband).

I am trying to figure out a fair “negotiation” commission % before I sign, and could use insight and help. (I will be negotiating for several good reasons - and do recognize his real estate knowledge and professionalism ).

He has his ‘broker license’ but no longer his own office and works out of another broker’s office (real estate franchise).

In reference to comm % splits, I m sure you will say there is no way of knowing answer without asking him, but I don’t think it’s okay for me to ask.

Since he has his ‘broker license’ do you think he receives same “office commission split” as other agents in office, Or a more favorable split for him since he is a broker?

There is 6% commission for my listing. (Probably 3% for office and 3% for my agent). I was thinking of asking him to split his 3%. [50/50 ] with me.

And if I purchase a house thru him, he will get at least 1.5 %. (Maybe 80/20 him/me?)

Would sincerely appreciate input, comments. Thank you.
The commission is negotiable - the 3 most important factors when negotiating a commission is the price/value, how reasonable the seller is and how pleasant that person is to work with.

The amount of work on a $50k listing is the same and sometimes more than a $500k listing. Not to sound harsh but by the sound of your post it would appear that you don't get it and since you are divorced your spouse may think that you are unpleasant and or unreasonable.

A great agent will be well worth their commission but when you start nickel and diming him he may leave (your) money on the table, remember you are on the same team (or at least you should be).

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Re: [Selling house, what is the appropriate realtor's commission?]

Post by RickBoglehead » Mon Apr 01, 2019 9:45 am

Pizza1945 wrote:
Tue Mar 19, 2019 1:57 pm


If he shows me a house, and I purchase it, what commission is he entitled to? Another 1.5%? (I will need to clarify this but currently I am under the opinion the ‘minimum’ he could make on this deal would be 3% ). (I probably should have waited till after our appointment next week to post this, but I would like to have my thought process ready before we have our initial meeting)

As always,Thank you for all and any comments.
Nothing, unless the Seller has no realtor and refuses to pay AND you hire him as a Buyer's Agent.
Avid user of forums on variety of interests-financial, home brewing, F-150, PHEV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.

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