Real(i)ty Check: Agent fees and fee sharing practices

Disclosure, yes. But listing brokers these days may have huge advertising expenses and very long listings.

When I started in this business the commission rates were fixed by the MLS and it was 5% with 60% going to the selling office and 40% to the listing office, so 3% to SA and 2% to LA. Later through the effort of many brokers it got changed to 6% and a 50/50 split. Now the trend is 5% again with the listing agent getting the lions share if it isn’t a 50/50 split.

This might be a greed factor that works in a sellers market, but as basically a listing broker I want the selling agents to be offered 3% or more and direct their buyers to my sellers property, I want the showings. How much is a greedy broker going to make with an unsold listing and how much is a seller going to be asked to reduce his price in a slow market because of a lack of showings and exposure. Maybe they would like to return to the days when the MLS was a place to list white elephants, and almost all the listings were open listings and not on the MLS, that would be fun. You would find one for sale and get your own open listing and then show it.

When offered less than 3% and I have the buyer I put it into the offer that the seller will fund the difference between the amount offered on the MLS and 3%. And because I don’t allow a listing agent to present my offers for me I get to get the experience of a seller getting upset with his agent. The last time was because the agent listed at 7% and offered 2% because it was a very saleable home, priced slightly below actual market, and she expected to double end it. Her trying to explain to the seller the offering of only 2% to selling agents was worth the price of a ticket.