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A lot of brokerages will also require the agent to pay the company what they would have received on a 2.5% listing. So for example, if you only pay the agent 1% the broker will still deduct their amount as if it was a 2.5% commission, leaving the agent with very little. Brokerages usually make the agent charge a "not less than" commission. If they agree to lower the commission for a client, the difference is coming from the agents slice rather than the brokers. This is why most agents have set agreements with clients as to what their commission will be.
A lot of brokerages will also require the agent to pay the company what they would have received on a 2.5% listing. So for example, if you only pay the agent 1% the broker will still deduct their amount as if it was a 2.5% commission, leaving the agent with very little. Brokerages usually make the agent charge a "not less than" commission. If they agree to lower the commission for a client, the difference is coming from the agents slice rather than the brokers. This is why most agents have set agreements with clients as to what their commission will be.
Except my question was about the buyer agent commission rather than the listing agent commission.
I think what would be helpful is if you include what they plan to give the listing agent. Where I'm at the listing agent usually splits commission in half and while the numbers you give sound reasonable, a buyers agent might see the big picture, meaning the actual percent commission the listing agent gets & tries to deal for part of that so it doesn't come out of his clients pocket if they did sign an agreement to pay the commission.
I'm in NJ and have never heard of buyers agents agreements that would allow for the agent to collect directly from the buyer. I personally wouldn't sign something like that.
Our buyer's rep agreements state the commission at X% that the buyer owes, then state that we will first go to the seller's agent and the seller for that, but that if the compensation is lower than agreed to, that the buyer will make up the difference. Chances are that we won't actually pursue that, but it is there to protect us. Mainly it applies in the case of FSBO's, and in those cases, where the seller doesn't want to pay a commission, the amount is simply considered by the buyer when they are deciding what their offer will be, just as any other costs would be.
Location: Mokelumne Hill, CA & El Pescadero, BCS MX.
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Quote:
Originally Posted by debbiekr
A lot of brokerages will also require the agent to pay the company what they would have received on a 2.5% listing. So for example, if you only pay the agent 1% the broker will still deduct their amount as if it was a 2.5% commission, leaving the agent with very little. Brokerages usually make the agent charge a "not less than" commission.
As the owner broker, I like the concept, but I'm sure I'd be sitting by myself in the office if we worked it that way.
If it works that way in your office I'd suggest moving your license
Our buyer's rep agreements state the commission at X% that the buyer owes, then state that we will first go to the seller's agent and the seller for that, but that if the compensation is lower than agreed to, that the buyer will make up the difference. Chances are that we won't actually pursue that, but it is there to protect us. Mainly it applies in the case of FSBO's, and in those cases, where the seller doesn't want to pay a commission, the amount is simply considered by the buyer when they are deciding what their offer will be, just as any other costs would be.
I actually lost a sale IMO due to the commission.
In our listing it said 5%, somehow my agents secretary typed up 6% in the contract, split 50/50. When my agent saw it (after they'd gotten the paperwork) he tried to fix it, both the buyers agent & their broker had a cow for what was a 1/2 percent; next thing I know I was getting a letter from their attorney stating they wanted out.
I witnessed him speaking to the buyers agent and heard how pissed they were with my own ears. Some agents are driven by money, even small amounts like from our sale. This is why I don't think 1% would work.
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