I have seen this for a long time Steve.  Right or wrong you got what was advertised.  I have seen that messed with too, with agents not in the same association.  We have a new form for that too.

Jana

Steven Said

My wife & I have been around for 13 years and I've never seen that before.  I always "assumed" that co-ops were split 50/50 unless the "variable commission" box was checked on the MLS sheet (for tired commissions).

Is this the latest upcoming thing?  Has anyone else seen this?

=====================================================

Steven I have seen it many times! that agent just co-op 2.5% he held back, that's all.

Its far from the latest .

I just did a deal were I ask for 4% and got it I might add and the other side got 3..

From Planet Realtor.

Q: Is a cooperating broker who procures a buyer entitled as a matter of law to half of the commission that the listing broker receives?

A: No. There is no law entitling a cooperating broker to half of the commission received by a listing broker.

Sometimes we all forget, everything is negotiable

Vance

Steven, that is entirely within the rules; our listing agreement has been modified in the last couple of years to clearly show the seller what the listing agent will be offering the buyer agent for bringing a buyer.

As to variable commissions, in our MLS, that is an agreement between the seller and the listing agent. If the listing agent has both sides of the transaction, a lower commission rate would apply. In the cases of multiple offers (remember the good old days with lots of competition), the listing agent was indicating that his client was in a favored position because of a lower commission rate.

I have seen it and I have to say, it sticks in my craw.  i guess somewhere in my sub-conscience I remember it.  Now I am not saying I would do anything unethical, like not show a house that my clients requested seeing.... but I might remember it.

the only time we offer a different commission structure is when we have reduced our side.  We still offer buyers side a fair amount, even more than we are making.  

Shelly, I wasn't suggesting it didn't bother me when I saw it on the hud, I just said it was within the rules. And you're right, I have taken a little less on the listing side to offer a larger commission and / or bonus to help get the house sold.

Variable commission doesn't have anything to do the commission split in CT. Variable commission means that the listing office has pre-arranged a different commission, if their office sells the property. I'm not going to mention commission rates but let's if our sells your property we'll give you a better deal than if we have to coop sell it.

We usually split 50/50 but we don't have to, what's offered in the MLS is a minimum fee to the buyer agency.

Oh Howard, that is how I interpreted your post....

Shelly

Sheely your right, I have reduced my side on the list side to pay the buyer agency a fair commission for the sell.

I'm sure Steve or anyone else wouldn't complain if the buyer side got more than list side... do they.

We almost always pay the buyer agency a fair amount, but there are rare cases when there's just no money in the deal to do that.

The standard in Portland on a 6% listing is 2.7 for the buyer's agent, 3.3 to the listing agent.  The logic is/was that the LA had more upfront costs for adverstising the property (in the newspaper).   But since the paper (here) is used SO much less now, I'd like to see it switched.   Except when I AM the listing agent!!!

40 miles to the south, in Salem, Oregon, the standard it 50/50 on a 6% listing.  That just the way they do it.

Real Estate.....It's all local, isn't it?

Phil, are you confused?  there is no standard now is there?  that would be against the law. : )  

OK. We all hate to be (or perceive we are) treated unfairly.

Here are some scenarios where I would call an uneven split FAIR:

1. Listing agent is paying a referral fee, the uneven split actually ends up being an even split after the fee is paid. (The old "I have so many hands in my pockets I'm getting a thrill" trick) ;)

2. Listing agent had to or had an agreement with the seller to spend a lot of money on special ads, etc. and the additional monies could not be called an advertising or paperwork fee (the old "it's illegal in my state" trick) so once reimbursed for the initial outlay of cash, it ends up being an even split.

3. Principal is a real estate agent who is doing most of the legwork, marketing or procuring in exchange for a cut of the commission (the old "keep it at arm's length or suffer the wrath of the E/O gods" trick) so once they get paid, it's again even between BA and LA.

Remember that the employment/commission agreement initially is only between the seller and listing agent. Technically, they don't have to pay more than a dollar to a BA to be within most association tribal customs. It's not good for business but I will be interested in seeing how things will change if and when the day comes where ALL principals pay only their own agent.

This is a topic that can heat up fast . . . LOL

That's right, Shelly.  Probably 90% of the listing here are 6%, 2.7/3.3.

Man, all these numbers!  I'm feelin' like Rainman!   "Phil's a good driver..."

Candice, most of my work currently is referral based business, and I still wouldn't  penalize my seller by offering a lesser split to the selling agent.  I accepted that referral, and I have to make it fit within my budget.  just my not so humble opinion.  

the bottom line is do unto others as you would done unto you.

Shelly

Phil, but can you count cards?

Shelly, when I have a buyer I don't look at the commission split. And when I sign the commission instructions, I don't more than glance at the other side's split.

So your seller is safe with me as a BA. :)

Candice,

Your statement ".....I will be interested in seeing how things will change if and when the day comes where ALL principals pay only their own agent." Is one I've been waiting to try out and see what happens for some time now.

I look at the listing broker compensating the selling broker, when the selling broker is working as a fiduciary to the buyer, as being no different than if the sellers attorney where to pay the buyers attorney.

Candice : )

Oh oh, BIC wants to see me in her office . . . ;)

FWIW -

Matt 20:1-16  "For the Kingdom of Heaven is like a man who was the master of a household, who went out early in the morning to hire laborers for his vineyard.  When he had agreed with the laborers for a denarius a day, he sent them into his vineyard. He went out about the third hour, and saw others standing idle in the marketplace. To them he said, ‘You also go into the vineyard, and whatever is right I will give you.’ So they went their way. Again he went out about the sixth and the ninth hour, and did likewise. About the eleventh hour he went out, and found others standing idle. He said to them, ‘Why do you stand here all day idle?’ "They said to him, ‘Because no one has hired us.’ "He said to them, ‘You also go into the vineyard, and you will receive whatever is right.’ When evening had come, the lord of the vineyard said to his steward, ‘Call the laborers and pay them their wages, beginning from the last to the first.’ "When those who were hired at about the eleventh hour came, they each received a denarius.  When the first came, they supposed that they would receive more; and they likewise each received a denarius. When they received it, they murmured against the master of the household, saying, ‘These last have spent one hour, and you have made them equal to us, who have borne the burden of the day and the scorching heat!’ "But he answered one of them, ‘Friend, I am doing you no wrong. Didn’t you agree with me for a denarius? Take that which is yours, and go your way. It is my desire to give to this last just as much as to you. Isn’t it lawful for me to do what I want to with what I own? Or is your eye evil, because I am good?’ So the last will be first, and the first last. For many are called, but few are chosen."

Hey Tim, what's the exchange rate on denarius to dollar? LOL, sorry being ornery today.

LOL - I bet your surprised I even knew that was in the Book. -- Gotta keep 'em guessing.

I don't even know what a denarius is... I figured it was the name of a good light beer. ;-)

Don't worry Tim, Lonn will be by soon and he'll school you on a denarius. : )

Shelly

Candice, a most interesting comment re "ALL principals pay only their own agent", certainly a subject for many more blogs to happen.

btw, Congrats on the back to back wins.

LOL, I also wonder if denariii (denariuses?) have become more valuable. Should check on eBay and see if any for sale. :)

Tim, it's called the Good Book and you gotta Believe. But, there are agents and agencies I do my best not to do business with. If Bat Girl were around she would say I'm un-ethical. But a denarius is a denarius.

And, if you don't believe me, ask my wife and I don't bring one home.

Great post made better by Tim. Five Stars!

We've never went by any 50/50. Most coop is around 2.5% (but anywhere from around 2% - 3.5%). Our listing agreement specifies what minimum coop we'll offer to the buyer's agent and what our total commission will be. If you as a listing agent take 6%, you'll still probably offer 2.5% and keep 3.5% ... if you take 4%, you'll probably offer 2.25% or 2.5% and keep the remaining 1.75% or 1.5%. Nobody really "disects" who gets what as long as the buyer's agent gets what's promised in the MLS.

Candice - Here's a #4 for your list and it ties in to what Michaela described:

4) Listing agent is able to obtain a higher listing commission in a market where everyone else is content with listing at 1% less and offering the co-op 50/50 of the lesser amount.

Uh, if I'm not mistaken, at least here in Florida, it doesn't matter what it states in the MLS if the contract supersedes the MLS.

I had a deal close last week that I knew for a fact  that other agent didn't even bother reading the contract early on. Especially when HIS seller contacted me directly to fax the contract back to me and they had not even signed it. So I called the listing agent as specifically asked him did he bother reading the contract. He "said" Yes. I knew better because I knew had he read it he would have mentioned from day one that my side was going to be paid a flat percentage although the MLS state the percentage -$200 that is suppose to be a "transaction fee" ( some agents try to refer to it as an MLS fee that the board will freak out about if they see you labeling it as such).

I NEVER pay that fee. I will walk away before I ever do. I don't charge it to anyone and I'm not going to pay it. Especially when I see on the HUD that they are charging the transaction fee back to their client. Nothing like double dipping to make an extra $200 huh? I will tell my client the deal with it and explain to them that they need to make a choice to either walk or proceed without me. I've never had one do either nor has my buyer ever had to pay the fee for the seller or listing agent to keep a deal together. It's a BS fee and it really erks my craw that agents don't just stop trying that crap and make the numbers a flat number or a flat percentage.

The only time you are going to see a number on the right side of the co-broke percentage on one of my listings is when there is a + sign before the number.

Nor will I take a listing that I have to offer less than 3% to the co-broke. I don't need money that bad even when I need it that bad.

Let me give you a all a K.I.S.S.

Keep It Simple Stupid.

It never ceases to amaze me what some agents will do to make a few hundred dollars. And then we hear those same agents whining about how the public views REALTORS below used car saleman.

Split it up the middle with the co-broke and say "Next?". Everyone will be happier in the end and agents will be more excited about working with you in the future which can only benefit you and any of your clients in the future as well.

"It be far easier for a camel to pass through the eye of a needle than it be for a rich man to get into Heaven."

Scott, you lost me on this one ... do you mean that your purchase contracts specify the commission? Our purchase contracts don't mention anything regarding the commission. That's between the listing agent and the seller ... specified in the listing agreement.

Yikes, commissions in a purchase contract? A big "no can do" in AZ. I'm surprised it's allowed aywhere.

Our Northeast Florida contract includes the co-op commission amount - not the amount paid by the seller.  I believe that the Florida Association of Realtors contract is the same.

Oops... I kinda got sidetracked and failed to respond to Steven's original post/question.  By the way, Steven and I are in the same market but have never had a cross-sale or even had the pleasure of meeting... hopefully that will change soon! ;-)

At any rate, we have not only seen it numerous times but we have done it.  The biggest 'spread' we've ever seen was about 2 years ago.  The co-op to us (buyer's agents) was 2.5%.  At closing, we saw that the listing agent received 4.5%.  Our reaction?  We chuckled and said, "Good for her!"  To begin with, I was impressed that she got a 7% listing during that strong seller's market and then to have taken home 4.5% was icing on the cake! LOL

We normally split the commission in half except when a seller simply refuses to pay the rate we require and wants a 'discount'.  We advise them that it is a bit of a gamble to reduce the co-op amount but we WILL NOT discount our own because we are paying for all the marketing and we will not cut back on our services (we'd prefer to not take the listing than to offer what we consider to be inferior service).  The seller knows 'going in' how much the split will be and what the possible pitfalls may be too.  So far, so good!

In our area it is common for the listing side to take more on the split than the buying side. One to cover the cost of advertizing. That is all nego at listing time with the seller.  

I show any property regaurdless of the commission paid. it is not fun when it is low, but it does not keep me from showing them.

Every agent should know what it can cost in advertizing and needs to allow for that when listing the properties. Not every deal is the same and not every commission paid is the same.

In our state to discuss commision with the listing agent on  what is being paid to the BA or SubA is a violation of anti trust laws.

Lisa, you lost me on that last sentence ... who's not allowed to discuss the commission with the listing agent?

Agree with Scott, I would never bring a property to market with less than 3% or I would be doing my Sellers a disservice in this market.  Typically a LA will have more expenses than a BA but that's just life.

As far as writing in a commission in a purchase agreement.  I honestly do not know the rule about that but I think it is a great idea for everybody to know how everybody is getting compensated.  I'm pretty sure I have written that into agreements before but not sure if I will admit that on a blog.

Radley I just did a contract on a commercial property in Hartwell GA and

put in at 4% the sellers agent got 3.5%, the deal closes on the 15th.

Vance

THANK YOU GENE!

A wise agent we know says "We're in business, not indentured" LOL . . . I love that.

AZ Contract specifically states commissions are NOT to be part of the purchase agreement.

Thanks Steven.  We are in that area frequently as we often have listings in JCP and our office is north of there on San Jose... although we don't spend much time in the office at all.  We have a fully equipped home office and prefer to work from there when not out showing homes, etc.