Circumstances, more than anything, affect the commission offered to both the selling (buyers) agent and the listing agent. Short sales, for example, are notorious for slicing agent commissions with the precision of a box cutter, so it makes sense to go for the highest possible commission with the knowledge that the bank is going to cut the commission.
Yes, all commissions are negotiable, but many times the larger brokerages do set the commissions that will be charged, and then leave a small bit of discretion for some reduction in commission. For those of us who work for an independent or low cost brokerage, we can afford huge discounts for our buyers and sellers. Lower commissions does not equal less skill, ability, or marketing power, but simply reflects a cost that the agent must cover before making profit.
On the other hand, there is a growing number of us--buyers agents--who give commission rebates to the buyers. So while the commission offered to the selling or buyers agent is set by the listing agent, the buyer also has negotiating power with his/her agent as well.
So yes, commissions due vary based on size of brokerage involved, cost structures for the agent, type of industry (residential versus commercial property) and the job involved. So it's best to find the best combinations for your particular needs and feel free to ask all agents about commission negotiations.
Allison James Estates and Homes
You should know agents are supposed to refrain from discussing commissions.
There is no "standard practice" when it comes to commissions!!!!
Shame on you........although I must commend everyone here who did refrain from specific responses in regard to their commission structure(s).
The only answer is - all commissions are negotiable.
agree and accept in each individual case based of course on the various services performed.
Good Luck to you
Edith YourRealtor4Life & Chicago, North Shore & Northern Illinois Expert
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Agents US & world wide properties. French, German, some Spanish &more EdithSellsHomes@atproperties.com or EdithSellsHomes@gmail.com
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I have, at times altered my commission structure, either when dealing with someone in extreme hardship, or a repeat customer.
ANY professional business will provide you with a list of their fees.
In real estate this could vary by type of property, such as single family home, land, mobile, etc. It could be by price point. It could be by level of service. It could include a minimum, or flat fee.
I not long ago listed a property for sale and achieved great results for the owner. He told me a little about an offer another top agent had made him if he would list with that agent. With a little thought the offer clearly created a conflict of interest. The agent had a strong incentive to sell the house at a low price. I sold the house for $300,000 more than the other agent thought he would.
The commission rate, though important, isn't the most critical part determining your profits. Be focused on achieving the best results rather than telling the professional how she has to achieve the results.
Top 2 agent nationwide at Keller Williams Realty
Over 30 years experience
Over 1,000 homes sold in Santa Clara and San Mateo counties.
I have in the past double ended deals where I have represented the Seller and Buyer. I requested the permission of both parties (Seller and Buyer) since I have a responsibility #1 to the Seller since I work for them in the listing of their property. Why? Think about it, your the Seller wouldn't you expect the agent to have your best interest in the negotiations be their #1 interest. In these cases I would lower the commission. Should the Seller say no to the double ending of the transaction I refer the Buyer to another competent agent to work with them on the transaction.
Working with the Buyer(s) the commission comes from the Seller and posted in an agreement on the percentage or dollar amount.
One thing to keep in mind, commissions are negotiable. But again as a Seller you get what you pay for. Shop around interview 2 or 3 ask questions.... interview them like they will be interviewing you.
Selling and Buying a property is stressful enough, but having someone working for your best interest can make the process and every little detail stress free as possible.
Hope this answers your question.
Michael Drljaca Realtor Alain Pinel Realtors Los Gatos 408 930 9922
Real estate is unusual compared to most businesses because #1 we can work on an assignment for months or years and not get paid one penny and #2 we publish a rate as a % of sales price.
I'm not sure your question is clear to me. When you say "depending on the type of business the relationship requires", are you saying selling a commercial property vs. residential? What do you mean by "type of business"?
Both Cindy and Edith articulated in their way, that compensation is variable/negotiable based on what the situation requires.
Some use hammer real estate practices...(every situation is a nail and get the one and only solution) while others are free to conform to the circumstances of the moment.
The unfortunate side of this is the confusion this injects into the market as consumers attempt to find the truth. They may hear others repeat the echos they thought they overheard as 'compensation' but they do not hear nor are the capable of finding out if the consumer was buying a KIA or the 'Ultimate Driving Machine'.You will get that for which you pay.