Home Selling in Hillsborough>Question Details

Dave Griswol…, Real Estate Pro in Bridgewater, NJ

Why are a good deal of Realtors/Brokers giving 2.5% on the Selling End and 3.5% on the Listing End?

Asked by Dave Griswold/ Lisa Payne-Griswold, Bridgewater, NJ Wed Jul 29, 2009

Commissions and on the Listing end taking 3.5% plus anywhere from $50 to $200 in mls fee?

I can understand it if it a total of 5% commission 50/50 and all that and if you had to relist charging $100 but lately I've seen 0 on the listing end and 2.5% on the Selling end then when it comes to closing the deal we find out that the listing office collected 3% & higher WHY?

I and my partner own our office so it's not as big a problem as Agents out there working hard for commission spending time, money, traveling showing multiple houses the work involved for them is rough. Also for ourselves but more so on the Realtor who doesn't own their own office their splitting it.

I'm happy to say that our office 98% of the time splits 50/50 only on very rare occassions very rare do we not practice this and usually it's because of sisuations involving the property that are beyond reasonable work or effort. Such as short sales

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Susan McLaughlin’s answer
Two thoughts:
Since the market changed and properties may have to be advertised longer - particularly luxury properties, I could understand a higher commission rate for the listing agent. They may be purchasing ads in the Wall Street Journal and other expensive venues if the sellers mandate it.

I just closed on new construction this week where I marketed it and worked it for a year - the buyer's agent purchased a lead and walked in the door with buyers she didn't even know and voila'. A sale for her. I wish I had the lion's share there, when in fact, I was less than the buying side commission. Don't always assume the seller's agent is getting more when it is blank.

Sometimes you sell a listed property in a week - sometimes it drains you until it sells. Like they say - Sometimes you get the bear - Sometimes the bear gets you.

Don't worry about what the listing agent is getting - just bring those buyers for the offered commission.
1 vote Thank Flag Link Wed Jul 29, 2009
Yes, to pick up on Jeremy's point - where are you coming from? What is your real issue here?
Web Reference: http://www.feenick.com
1 vote Thank Flag Link Wed Jul 29, 2009
Well this is not my practice but the answer is pretty simple. What the seller agrees to pay the listing agent is between the agent and the seller not buyers agents. Buyers agents simply agree to show a home under whatever the seller is offering. How much a listing agent is making on a deal whatever it is less or more is really nobody else's business..... There are times when a lisitng agent may feel justifiable in taking a higher split. A referal fee may be involved. Perhaps additional marketing or staging fees.... I do understand where you are coming from though.
1 vote Thank Flag Link Wed Jul 29, 2009
Common with short sales because the listing agent does the processing of the short sale
0 votes Thank Flag Link Wed Aug 22, 2012
To comment on Jack, On a recent contract we were putting together the listing agents commission was missing. Of course I called the agent who didn't answer, then emailed the agent. TheI response I got back was,
My commission shouldn't matter just present the offer.
We've done contracts where the listing agent just never discussed commissions .
We wrote as it said in the listing zero, then when closing time came so did the commission bill, and 90% of the time it was higher than the selling end.

As to short sales I agree a higher commission on the listing end is acceptable and should be written on the listing. It is hard work.
we've been handling some short sales it is time consuming, and difficult.
Web Reference: http://www.urhomerealty.net
0 votes Thank Flag Link Fri Jul 31, 2009
There really shouldn't be a surprise at closing. Commissions are clearly disclosed on the sales contract. If it's not filled out yet, just ask and the info can still be added before both parties sign.

One of the most obvious reasons I've seen for dissimilar splits is the short sale. The listing agent really does the lion's share of the work there and should at least try to be compensated for that. The bank still may block that and nix the original listing agreement, but I would at least try.

Jacobus "Jack" Vollenberg
RE Appraiser - Vollenberg Appraisers
Asset Manager - ERA Statewide Realty
Cell (973) 590-0142
0 votes Thank Flag Link Fri Jul 31, 2009
The standard NJAR contract states the listing agreement determines the listing agents commission and it's not a fillable area.

On our MLS listing agents will often put in PLA (per listing agreement). When presenting an offer, why not just ask what the commission split is?

Laura Giannotta
Keller Williams Atlantic Shore
0 votes Thank Flag Link Thu Jul 30, 2009
Hi there, I'm not sure why the convention is to keep it off the listing - with my listings I have split the commission evenly. Sometimes the listing commission is over an even split and sometimes it is under - in either case, I do not see it disclosed generally. I've never really looked at it as "keeping it secret" - just a convention.

Listing a home for sale is hard work and so I don't object to a listing agent negotiating the best fee possible for their efforts. From a marketing standpoint, I caution sellers not to cut below customary levels in what they will pay out to the buyer's agent.

Everybody works hard and surely deserves to be compensated fairly for their efforts.

Jeannie Feenick
"Unwavering Commitment to Service"
Search the MLS at http://www.feenick.com
Web Reference: http://www.feenick.com
0 votes Thank Flag Link Wed Jul 29, 2009
Not surprise the seller thats not what I'm referring to. I mean why does the listing agent not write what commissions they are recieving??? Why Hide it? And yes I know it''s common I just want to know why?
In addition every time I've seen this on a listing it's been because they are not splitting the total commissions 50/50.
Web Reference: http://www.urhomerealty.net
0 votes Thank Flag Link Wed Jul 29, 2009
Well said, Jeanne- I agree. Let me add that one reason for some agents to place a higher mls fee (paid by selling agency) is to cover costs of relisting he home, whereby it is $25 cost to the agency EACH time it is listed. Some agents will use a ploy to relist just before expiring to make the listing look fresh to those who have done their research, but this is at a cost to the buyers agency. Another reason is that some offices have a service they use like e-showings that automate the showing process, but that also comes with a cost - about an extra $100 for the convenience. The seller has to decided if it is worth the extra money to automate the showings, make their listing look fresh, etc and then make a decision whether they should "push back" that fee. It is all about choices, and some may be happy with that if it gets their home sold quicker and nets more in their pocket as a result.

Lynn Dachisen http://www.FindMyHomesValue.info
908 256-0508
0 votes Thank Flag Link Wed Jul 29, 2009
Hi there, I don't think it is even legal to surprise a seller with a commission that has not been agreed to when the listing is negotiated. Are you perhaps referring to the fact that the listing commission is not stated on the MLS listing but the sales commission is? This is quite customary - but it does not mean that there is no commission, it just isn't disclosed on the listing. Unless it is a limited service agreement, it is safe to assume that there will be some commission agreed to at the time the listing is taken.

As for the MLS fee - this does annoy me as well. I believe it should cover the expense of listing the home on the MLS - if the home is only on the Garden State MLS then that fee is $25 or $26. If the home is listed in multiple boards, well then, it should cover the fee and nothing else. I think the reason that you see the variance is that no one is policing it. My office only puts in the actual MLS listing fee, but I have seen it as high as $200. I would caution sellers that this can negatively impact the attractiveness of your listing and you should push back on your agent if you see it. It is customary for this fee to be paid by the buyer's agent. Inflating it is a silly ploy on the part of the listing agent/broker to recoup costs that should be covered by whatever commission they are earning. You will not see me doing this - my company doesn't do it, but even if they suggested it....I'd push back.

Jeannie Feenick
"Unwavering Commitment to Service"
Search the MLS at http://www.feenick.com
Web Reference: http://www.feenick.com
0 votes Thank Flag Link Wed Jul 29, 2009
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