What does It mean when the commission reads 3/1.5

Asked by Janine.hendrickson, Seattle, WA Sun Sep 30, 2012

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12
Dan Edwards, Agent, Bellevue, WA
Sat Nov 17, 2012
Interesting answers to these questions. I set my compensation directly with my buyers. We talk and determine what it's worth to have my representation. What the seller offers has no impact on the level of service I will provide.

The literal is 3% on the first 100,000 and 1.5% on the rest.
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Meg O Harris…, Agent, Puyallup, WA
Wed Nov 7, 2012
It means the listing agent or property owner just told you what your services, expertise and client list is worth to them.

You may want to consider whether or not you value your business at a higher price than some builder does before showing those properties. I have an agreement up front with buyers who want to look at properties that attempt to make me a "discount" real estate broker; they sign a buyer's agreement confirming they will make up for any deficiency on the seller's end should they choose such a property.
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Ann.ferguson, , Lynnwood, WA
Wed Oct 31, 2012
The assumption has been made here that the selling broker's commission is always the same as the listing broker's. They actually can be different -- that is, the listing actually could be split 3/2 (3 for the listing broker and 2 for the selling broker), 2/3, 4/2, 4/3, or any combination that the sellers and their listing agent have agreed to. The listing shows only the amount offered to the selling broker, and the listing broker's portion may or may not be different (though they usually are an equal split).
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Ardell Della…, Agent, Kirkland, WA
Tue Oct 2, 2012
This offering to the Buyer's Agent is 3% on the first $100,000 and 1.5% on the price amount over $100,000. It is more commonly seen offered by builders on listings where the house has not yet been built.

I just did a double check on that and virtually all of the 3/1.5 homes were built in 2012,
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Jennifer Oha…, Agent, Bothell, WA
Mon Oct 1, 2012
Generally 3% paid to the broker on the first 100k, 1.5% paid on the remainder. This would be a low fee to pay because the standard market commission in this area is 3% on the entire purchase price to EACH side.

And keep in mind that the agent doesn keep all of that - most of the time the majority goes back to the brokerage, toward paying taxes and insurance, and reimbursing the agent for the steep, up front, non-refundable costs to market the home and operate while working for the buyer/seller.
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Ginny Sawatz…, , Seattle, WA
Mon Oct 1, 2012
Janine,

You already have some great responses to this question. Just keep in mind that the commission amount truly effects the person listing the property because they are responsible for paying the commission. If you are the buyer this does not effect you, as this is not a cost that you are responsible to pay. It will however effect your agent and the amount of commission that they will recieve at closing. I hope this information was helpfull.
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Dan Tabit, Agent, Issaquah, WA
Mon Oct 1, 2012
Janine,
Just some additional information; commissions are negotiable is true, up until they are posted. When Broker "A" posts that the commission for selling their listing is 3/1.5 it would be a NWMLS rules violation to demand more. A posted commission rate has already been negotiated by the listing broker and outside of any other posted incentive is the maximum amount available for the buyer's broker on that property.
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Jirius Isaac, Agent, Kenmore, WA
Mon Oct 1, 2012
You already have some good answers belwo so no need to say the same things again. Prblem is, we do not know who you are relative to the listing & it makes me wonder why you ask the question in the first place.

Good luck,
Jirius Isaac
Isaac Real Estate Team
Champions Real Estate Services
TriStar Finance #MLO-107799
Office: 425-483-6849 Cell: 206-841-9976
Winner of Seattle Magazines 5 Star
Real Estate Agent Best in Client Satisfaction Award
Mortgage Loan Originator Best in Client Satisfaction
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Ray Akers, Agent, Seattle, WA
Mon Oct 1, 2012
The simplest explanation is; this is likely the selling office commission only. The commission payable to the selling broker will be 3% of the 1st $100,000 of the selling price, and 1.5% on the remainder of the sale price. If the home was sold for $400,000, then the selling broker would receive $7,500 commission. The selling broker would share this commission with the Managing Broker according to their arrangement, which varies from company to company. All commissions are payable to the Managing Broker, not the individual agent. The listing broker will have a separate commission for their services.
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Puneet Sachd…, Agent, Bellevue, WA
Sun Sep 30, 2012
In most cases it means 3% of the first 100K of the purchase price and 1.5% on the remainder of the Purchase price.
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Emily Griffin, Agent, Seattle, WA
Sun Sep 30, 2012
That would be a question for listing broker, as they will have the specifics.

It very likely applies to whether the sales commission is 3% or 1.5% depending on whether the selling broker is present or not present when showing the listing to the buyer clients.

But again, you will want to check with the listing broker.

Hope that helps!
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Joanne V McC…, Agent, Woodinville, WA
Sun Sep 30, 2012
Hi Janine,
Just some thoughts to keep in mind when you are looking at commission. It IS negotiable. The customary rate is 6% (which means the brokerage fee is split 50/50 between the listing agent and the selling agent, equaling 3% to each side). Specifically the 3/1.5 means that the commission structure is 6% on the first $100,000 of sale price and 3% on anything over and above $100,000 ---- hence the 3 and 1.5, because it is split between the listing and selling agent. The other common commission structure is 7% - which equates to 3.5/1.75.
Remember, as a buyer who is looking at listed properties with a licensed agent---sellers who have signed listing agreements and whose properties are listed on the NWMLS have agreed to pay the brokerage fee. The agent that you work with is representing you, although they are paid by the seller upon a successful closing, according to the terms of the listing agreement.
Hope this helps and Happy House Hunting!
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