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Real Estate Fee Question
Posted on 2/21/18 at 8:14 am
Posted on 2/21/18 at 8:14 am
How will the real estate commission be divided under the following example:
The property sale nets $100,000 for parcel of rural land with a 6% commission.
1. Property is listed with Fink & Lied Properties "Names You Can Trust in Real Estate."
2. Listing agent of record is Larry "Loophold" Lemanski.
3. The purchase of the property was placed under contract by Peaches deVille of Lotsalotta Real Estate Agency.
The property sale nets $100,000 for parcel of rural land with a 6% commission.
1. Property is listed with Fink & Lied Properties "Names You Can Trust in Real Estate."
2. Listing agent of record is Larry "Loophold" Lemanski.
3. The purchase of the property was placed under contract by Peaches deVille of Lotsalotta Real Estate Agency.
3
Posted on 2/21/18 at 8:18 am to CharleyLake
Buying and selling agent would receive 3% of purchase price each, but would then need to use a portion of their commission to pay their broker according to whatever agreement they have set up.
Also it’s “loophole” not “loophold”
Also it’s “loophole” not “loophold”
Posted on 2/21/18 at 8:55 am to ATLdawg25
"Loophole" is correct. Good to know.
Is what you are telling me is that the company (who actually located the purchaser) for the owner is obliged to represent the purchaser and is known as the buyers agent?
Typically what percentage of the 3% does the individual that obtained the initial listing agreement from the seller receive?
Is what you are telling me is that the company (who actually located the purchaser) for the owner is obliged to represent the purchaser and is known as the buyers agent?
Typically what percentage of the 3% does the individual that obtained the initial listing agreement from the seller receive?
Posted on 2/21/18 at 9:13 am to CharleyLake
Normally when you buy, you sign an agreement with an agent that they will represent you in your real estate transaction. That is the buyer's agent.Similarly, when you list you sign an exclusive listing agreement with an agent. That is the seller's agent.
Typically, in your listing you will identify the percentage you are willing to pay a buyer's agent. I.E. If you are listing it yourself, you might only pay out 3% to the buyer's agent. If you list it yourself and sell to someone who does not have agent representation, you would pay 0%.
The broker agreements vary. If the agent is with a small virtual broker, they will probably pay a very small percentage, or potentially even a flat fee per transaction since there is very little overhead. The larger brokers (Keller Williams, for example) take a much larger chunk out of the commission until an agent hits an earnings threshold, and then usually have a stepped structure where you pay them less off the top the more business you do.
Does that answer your question?
Typically, in your listing you will identify the percentage you are willing to pay a buyer's agent. I.E. If you are listing it yourself, you might only pay out 3% to the buyer's agent. If you list it yourself and sell to someone who does not have agent representation, you would pay 0%.
The broker agreements vary. If the agent is with a small virtual broker, they will probably pay a very small percentage, or potentially even a flat fee per transaction since there is very little overhead. The larger brokers (Keller Williams, for example) take a much larger chunk out of the commission until an agent hits an earnings threshold, and then usually have a stepped structure where you pay them less off the top the more business you do.
Does that answer your question?
Posted on 2/21/18 at 10:00 am to ATLdawg25
Yes, and I really appreciate that you took time to respond.
Posted on 2/21/18 at 10:39 am to CharleyLake
No problem!
Posted on 2/21/18 at 5:47 pm to CharleyLake
Typical 6% commission is split 50/50 by listing and selling agencies, unless specified otherwise in writing.
Posted on 2/21/18 at 6:17 pm to ItNeverRains
Typically it's split 50/50 but the listing agent doesn't have to disclose how much he/she is getting. She could put buyers agent will receive 2.5% commission. The buyers agent will think that the total commission is 5% but it could really be that the listing agent is keeping 3.5%.
Posted on 2/22/18 at 6:32 pm to CharleyLake
Not enough information.
Realizing that practices vary from state to state, what's typical in my state may be different than yours. But in most states that I'm aware of, the listing agreement and the purchase agreement will name the real estate brokerages. The agents will sign the agreements as representatives of their respective brokerages. But when the checks are passed out at the closing table, they go to the brokers/agencies, not the individual agents. So they don't pay the brokers. The brokers pay them.
And there's no way to know what split arrangements the agents have. Our buddy Larry might be on a 100% commission deal, where he pays $500 for his desk each month, but keeps the full take. While our selling agent, Lisa Lipstick, is on a 50/50 commission split until she hits $500k in listings and/or sales, and then she bumps up to say 70/30. But unless you take her out for drinks after the closing and she opens up about every detail of her life since her sorority days, you'd never know.
As far as what the selling agency gets, it's typically listed as "SAF" (sub agent's fee) in the MLS and on the listing agreement.
Realizing that practices vary from state to state, what's typical in my state may be different than yours. But in most states that I'm aware of, the listing agreement and the purchase agreement will name the real estate brokerages. The agents will sign the agreements as representatives of their respective brokerages. But when the checks are passed out at the closing table, they go to the brokers/agencies, not the individual agents. So they don't pay the brokers. The brokers pay them.
And there's no way to know what split arrangements the agents have. Our buddy Larry might be on a 100% commission deal, where he pays $500 for his desk each month, but keeps the full take. While our selling agent, Lisa Lipstick, is on a 50/50 commission split until she hits $500k in listings and/or sales, and then she bumps up to say 70/30. But unless you take her out for drinks after the closing and she opens up about every detail of her life since her sorority days, you'd never know.
As far as what the selling agency gets, it's typically listed as "SAF" (sub agent's fee) in the MLS and on the listing agreement.
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