Home Selling in Worcester>Question Details

Tracey Swope, Other/Just Looking in

If I am selling a house, do I pay the entire commission or does it get split with the buyer?

Asked by Tracey Swope, Wed Aug 15, 2007

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The seller pays the fee from the proceeds of the sale. The seller pays a fee as negotiated between the seller and the listing broker. It is strongly in the sellers best interest to provide compensation to a cooperative broker who may represent a buyer. Most properties are not sold by the listing agent, but rather a buyer agent. As a seller, the fee that you pay your listing broker will contain a provision for part of that compensation to be paid to the buyer agent.

There are theoretical arguments that debate whether the buyer or the seller is actually absorbing the fee. That becomes a matter of perspective. Is the cup half empty or half full? Some state that the buyer pays since he/she brings the dollars to the table. Others say, the seller pays. The HUD closing statement lists it on the seller side. I say that the transaction pays the fees, and that neither buyer or seller will participate unless the net number is acceptable. When the transaction makes sense to the parties, a deal is made.

In practicality, the seller pays the fees to both the listing broker and buyer broker, and generally those commissions are earned at contract presentation, but paid at closing.

Buyers often work under contract with their buyer agents. The fee that the buyer agrees to pay their buyer agent may be more than your offer of co-op compensation. If so, an offer may sometimes include that additional fee. It is similar to a buyer asking a seller to pay closing costs or some other transaction cost. If that happens, simply look at your net number, your likelihood of getting another contract at a higher net, and determine whether the transaction makes sense
3 votes Thank Flag Link Thu Aug 16, 2007
Deborah Madey, Real Estate Pro in Brick, NJ
The entire commission is usually paid out of the sellers proceeds. But these proceeds are part of the purchase price, so you could say the buyer pays you to pay the fees! But in answer to your question, it is the seller who pays the fees in most cases.
Web Reference: http://carriecrowell.com
1 vote Thank Flag Link Thu Aug 16, 2007
As a seller you pay the commission. That commission is then split with the realtor that brings the buyer. The buyer does NOT pay any commission. The only fees that are split are certain title fees which buyer and seller pay equal amounts. Hope that helps.
Web Reference: http://www.amywengerd.com
1 vote Thank Flag Link Wed Aug 15, 2007
Typically the commission paid by you is split between the seller's agent and the buyer's agent.
1 vote Thank Flag Link Wed Aug 15, 2007
I noticed that this question was asked about a long time ago, but we want to contribute for anyone else that comes across this thread.

Commission is always negotiable, and the Department of Justice even condones it as good competitive behavior among agents. The seller does pay the commission that covers both agents. But in a way, the buyers also pay for it since commission rates are typically accounted for in the selling price.

Many agents are willing to be flexible on commission rates, but it's not something they like to advertise. And most clients are not very capable or comfortable negotiating rates.

At UpNest (http://www.upnest.com), we created an online marketplace where home sellers can confidentially submit their homes, and multiple top local agents will compete to obtain your listing. Some agents lower their commission rates to stand out, and every agent that submits a proposal is an experienced agent, so it's not the same as working with a low grade discount brokerage.

Hope that helps!
0 votes Thank Flag Link Mon Apr 13, 2015
Tracey, yep, you pay for it all. But, thankfully, since the house is being purchased, really the buyer is coughing up the money. Good luck!
0 votes Thank Flag Link Mon Apr 21, 2008
Tracey - when you first list with a Realtor, you sign an Exclusive Right to Sell Listing Agreement, which will have the percentage you will pay the Realtor to list your home. That percentage comes off the full sales price that you agree upon with the buyers to buy the home. That percentage will either go all to your Realtor if they acquire a buyer themselves with no other agent (which in turn gets split with their office for advertising and marketing expenses of your home), or that percentage of money will be split between your Realtor and a Buyer's Agent if a buyer buys it with another realtor. The buyer pays you the full sales price agreed upon, and the commission comes out of that money, so technically you are not paying anyone, but the buyer is paying that commission. Hope this helps and if you are wanting to sell your home, I'd be happy to assist you in anyway. If you decide you'd like to sell the home yourself, then it would be good to send flyers to local real estate offices so agents can bring buyers to see you home, and you could offer them usually 2-3% of the sales price, since that is a usual split a Buyer's Agent would get anyway.
0 votes Thank Flag Link Thu Feb 28, 2008
The entire commission comes from the proceeds of the sale of the house.
0 votes Thank Flag Link Mon Oct 8, 2007
The fee for proffesional marketing is traditionaly initiated and assumed by the Seller of the home, and in most cases, paid at the time of closing as proceeds of the sale. In the Seller's interest, the proffesional marketing premium should assure that your home is exposed to the most buyers actively looking for a home in your category and price range. Your agent should be working very hard for you to assure and maintain your best interest in negotiating your highest value for your home with the least amount of time. Our Multiple Listing Service (Baystate), does still require that participants include some form of compensation offered to other agencies using the service, and this is where the confusion begins.....
Many Buyer's agents will refuse this offered compensation to avoid any inference of compensation being paid directly from the Seller, especially since offered compensation is normally in the form of a percentage of the agreed upon sale price. A good Buyer's agent may be able to negotiate a better price for you, and would consequently reduce his commission. In this case, your buyer's offer should be written to respectfully refuse the compensation offered by the Seller, and:
(a) propose a fee to be paid from the sale proceeds by the Buyer, as a convenience to the sale, or
(b) separately agree to a figure to be paid directly from the Buyer at the closing in a seperate contract.
If this is the case in an offer you receive for your home, your agency may return the portion of the offered compensation directed towards the Buyer's agent to help balance your transaction costs, since it is no longer needed to compensate the cooperating Agency.
In either case, the homes market value should not be affected by the change, and your net proceeds as a Seller remain relatively constant.
0 votes Thank Flag Link Mon Oct 8, 2007
If you sell you home thru a Real Estate agent, the common practice is for the seller to pay a % of the sale price at close for services rendered by the listing broker. This normally includes a % of that fee being paid to a co-op agent who represented the buyer and is also a members of the same MLS in which the home was listed. It would not be common practice for the buyer to pay any of the commission to the listing broker.
0 votes Thank Flag Link Wed Aug 15, 2007
One way to look at it is this:
The buyer is supplying the money to purchase your property. So in essence they are paying for everything!
:) !
Actually, then, if you want to look at it that way, the buyer is supplying the money for you to distribute to the listing broker.

Techinically, the proceeds from the sale are held in an escrow account until all the appropriate paperwork is completed, then "everyone receives their payment". And the buyer receive the grant deed for the property (and hopefully the keys and garage door opener).

The best way to see this is to ask your Realtor for an "Estimate of Seller's Net Proceeds", which will list in detail, line by line, what happens to the proceeds from the sale. You can ask for this BEFORE you put your home on the market.

Hope this helps.
0 votes Thank Flag Link Wed Aug 15, 2007
Keith Sorem, Real Estate Pro in Glendale, CA
As the seller you do pay the entire commission after the house is sold. The amount is usually split between your listing agent and the agent that brings the buyer. However if the home does not sell you do not have to pay any commission
0 votes Thank Flag Link Wed Aug 15, 2007
Sellers pay the commission at closing. Usually a line deduction on your HUD-1 statement. In some states, the commission is actually a lien against the house until it closes.
Web Reference: http://www.dianeglander.com
0 votes Thank Flag Link Wed Aug 15, 2007
Usually the commission you agree to pay to the listing broker is split 50/50 with the broker of the buyer. Hope this helps.
Web Reference: http://pamwinterbauer.com
0 votes Thank Flag Link Wed Aug 15, 2007
Pam Winterba…, Real Estate Pro in Danville, VA
Just depends on how you look at it1 Is the glass half full or half empty. With out the buyer and the loan then there would be no monies at all to pay a fee. This is all parties working together to make a successful transaction.
0 votes Thank Flag Link Wed Aug 15, 2007
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