Answers (14)
- Mack McCoy, "Mack McCoy"
- Contributions:2110
Gee, Dan, I thought you'd know by now that not all agents are Realtors®. So right there you have a segment that does not subscribe to the Realtor® Code of Ethics or is a member of NAR.
But this is only an ethical problem if an agent is actively working with a buyer and doesn't show a home based on the commission. (Actually, this is also how agents could protect themselves with a buyer agency agreement - the buyer and agent could agree on a commission, and any difference from the co-brokerage arrangement could be made up by the buyer).
What people don't seem to get is that a lot of homes are sold because an agent picks up the phone and calls someone who is not actively looking, someone who doesn't expect the agent to be actively looking, and someone who is not in an agency relationship with the agent.
Finally. When showing houses to a buyer for the first time, agents may very well put the lower-commission houses at the end of the list - if a buyer decides to buy one of the first homes they see, the agent isn't obliged to make them see all of the others on the market, are they?
But this is only an ethical problem if an agent is actively working with a buyer and doesn't show a home based on the commission. (Actually, this is also how agents could protect themselves with a buyer agency agreement - the buyer and agent could agree on a commission, and any difference from the co-brokerage arrangement could be made up by the buyer).
What people don't seem to get is that a lot of homes are sold because an agent picks up the phone and calls someone who is not actively looking, someone who doesn't expect the agent to be actively looking, and someone who is not in an agency relationship with the agent.
Finally. When showing houses to a buyer for the first time, agents may very well put the lower-commission houses at the end of the list - if a buyer decides to buy one of the first homes they see, the agent isn't obliged to make them see all of the others on the market, are they?
- Dan, "the_country_hick"
- Contributions:4827
After reading this thread and others that are similar just how does the NAR code of ethics really work?
No, I will not show that property because I would get 1/2% less in commission? How is that not an ethics violation?
No ethics exist when it comes to many realtors commission it seems.
No, I will not show that property because I would get 1/2% less in commission? How is that not an ethics violation?
No ethics exist when it comes to many realtors commission it seems.
- Debra (Debbie) Rose, "Livingston NJ"
- Contributions:3273
" There is no set commission,as law in NJ does not allow it."
Well, that's not just in NJ..............legally, all commissions are negotiable, no matter where you are in the country!
There is no "set", "customary" or "usual" commission.
I can only speak for myself........As a buyer's agent, I would show any listing that suited my buyer's needs..........that particular compensation might not thrill me, but I would be thrilled to have a happy client who will refer me to their friends..or use me again in the future........always have to look at the big picture.
Well, that's not just in NJ..............legally, all commissions are negotiable, no matter where you are in the country!
There is no "set", "customary" or "usual" commission.
I can only speak for myself........As a buyer's agent, I would show any listing that suited my buyer's needs..........that particular compensation might not thrill me, but I would be thrilled to have a happy client who will refer me to their friends..or use me again in the future........always have to look at the big picture.
- Caveat Emptor
- Contributions:501
so, price fixing is illegal,
collusion is illegal,
yet you only see 4% commissions on "new constructions" "sometimes."
Sounds like the NAR has that one tied up in quite the nice little bow, doesn't it?
re the OP, in some areas the standard split is actually 40/60 or 2.5%/3.5%. if this is standard where you live, you would be depriving a self interested agent a whole 1.5%(1500 per 100,000). Of course as we all know agents only do what's in their buyer's best interest. Fiduciary duty and all that.
collusion is illegal,
yet you only see 4% commissions on "new constructions" "sometimes."
Sounds like the NAR has that one tied up in quite the nice little bow, doesn't it?
re the OP, in some areas the standard split is actually 40/60 or 2.5%/3.5%. if this is standard where you live, you would be depriving a self interested agent a whole 1.5%(1500 per 100,000). Of course as we all know agents only do what's in their buyer's best interest. Fiduciary duty and all that.
- Howard Cohen, "Howard Cohen"
- Contributions:154
When a buyer negotiates with a for sale by owner,the buyer usually deducts a perceived 6% commission from the asking price before making an offer. When a property is listed with a Realtor,a prospective buyer will make an offer on the sale price without knowing or caring what the commission is. The price of the home should encompass the commission.
As for 4%, In New Jersey at times we see that on new construction. There is no set commission,as law in NJ does not allow it.
Resale homes command more time and effort to sell on the part of the Realtors.
In todays market with so much competion and so many available homes, if you want to expedite the sale of your property I would advise offering higher commissons to entice the showing of your home. The negotiated sale price should cover the commission.
As for 4%, In New Jersey at times we see that on new construction. There is no set commission,as law in NJ does not allow it.
Resale homes command more time and effort to sell on the part of the Realtors.
In todays market with so much competion and so many available homes, if you want to expedite the sale of your property I would advise offering higher commissons to entice the showing of your home. The negotiated sale price should cover the commission.
- Carol McAlister, "affiliatebrk"
- Contributions:27
If she is making full commission selling you a new home than she prob. should be reducing her commission on your selling side. That is up to you and the agent but remember that if she is making very little 1% selling your home then your services and the amount of time spent marketing etc. is reduced Period. As far as showings, if there are 100 homes on the market offering a buyers agent 3% and then your home at 2%, which homes are they going to show in a slow market or any market?? I reduced listing commission thus "buyers agents commission" on two homes in 10 years and refuse to ever do again.
Personally I work to hard.... but on the ones I did reduce they were rarely shown and ended up reducing the list price to finally get the showings. Seller ended up with less than if they had just paid the commission to get the buyers coming thru in the first place.
Personally I work to hard.... but on the ones I did reduce they were rarely shown and ended up reducing the list price to finally get the showings. Seller ended up with less than if they had just paid the commission to get the buyers coming thru in the first place.
- sunnyview
- Contributions:26843
If you are buying a house with that agent, then I would ask her to change the split so that the buyers agent gets a more generous 2.5-3% and she takes 1-1.5% on the listing side for a total of 4%.
The buyers agent is not supposed to avoid your house because of the size of the commission, but they are business people with families to feed too. So you have to be a realist about how many showings you will get with a reduced commission. Talk to your agent and ask them what your options are also make sure you are priced right out of the gate.
The buyers agent is not supposed to avoid your house because of the size of the commission, but they are business people with families to feed too. So you have to be a realist about how many showings you will get with a reduced commission. Talk to your agent and ask them what your options are also make sure you are priced right out of the gate.
- Mack McCoy, "Mack McCoy"
- Contributions:2110
So, here's the real world answer:
Agents who are working with buyers are probably not going to care. However, that's really just a portion of the market.
There are A LOT of agents that work with investors, builders, people that I would call, not especially motivated but open to a good deal. Move-up and move-down buyers can fall into this category, because while they're not actively in the market, agents are often looking for a good listing to sell to them so that they can get that buyer's home on the market!
Anyway - point being, agents working this type of buyer may very well ignore your listing, because. Just because. They see a commission rate 1/3 or 1/2 of what they were hoping for, and they think, "Well, maybe not."
Now, if one of these buyers were to call them up on your listing, most of them would probably try to sell it to them.
But to pick up the phone to try and sell it, maybe not.
Agents who are working with buyers are probably not going to care. However, that's really just a portion of the market.
There are A LOT of agents that work with investors, builders, people that I would call, not especially motivated but open to a good deal. Move-up and move-down buyers can fall into this category, because while they're not actively in the market, agents are often looking for a good listing to sell to them so that they can get that buyer's home on the market!
Anyway - point being, agents working this type of buyer may very well ignore your listing, because. Just because. They see a commission rate 1/3 or 1/2 of what they were hoping for, and they think, "Well, maybe not."
Now, if one of these buyers were to call them up on your listing, most of them would probably try to sell it to them.
But to pick up the phone to try and sell it, maybe not.
- Laura McKenna, "LauraMcKennaHomes"
- Contributions:120
I agree with many of the Agents who have responded to the 4% commission question. It is our ethical duty as Buyer Agents to show all homes to buyers when working as a Buyer's Agent.
Not all Agents feel this way, and even the best of Agents may feel a bit of resentment after they've been working with a buyer for several months and have shown 50+ homes to a buyer knowing that there's another 2 hardworking months of work ahead after an offer is accepted.
If I negotiated a commission as a Listing Agent because of a multiple transaction situation with the seller, then I would give a greater commission split to the Selling Agent in the best interest of selling the home for the seller.
- John Risica, "John Risica"
- Contributions:24
The theory is that buyer's agents should show homes that are best for the buyer, but not every agent works that way. I always advise my clients (seller's) to list at 5% or more if there is a Co-operating agent and I give a discount to 4% if there is none.
- Keith & Kinsey Schulz, "Keith And Kinsey"
- Contributions:103
I personally completely ignore the commission amount when showing buyers properties. I work to get them the best property for their needs, not the best property for my wallet. Although, there are some brokers/agents out there, that won't show a lower commission property.
That being said, your agent could be offering a normal compensation to a buyers agent, and just be taking the commission cut herself. Check your listing contract. There should be a section that says something like "Compensation to Others" or "MLS offer of Compensation." This will tell you how much she has offered to buyers agents.
That being said, your agent could be offering a normal compensation to a buyers agent, and just be taking the commission cut herself. Check your listing contract. There should be a section that says something like "Compensation to Others" or "MLS offer of Compensation." This will tell you how much she has offered to buyers agents.
- Ritu Desai, "VARealtor"
- Contributions:759
There are few percentage of Realtor who would not be pleased by lower commission offered. Also some listing agent may cut corner on their marketing budget due to low commission.
At the end depending on how your home shows compared to other competition, where you are priced and the demand for your home will determine if lowering commission was worth for you or not.
If you don't get many showings you can always updated the listing the going market rate.
Good Luck!
At the end depending on how your home shows compared to other competition, where you are priced and the demand for your home will determine if lowering commission was worth for you or not.
If you don't get many showings you can always updated the listing the going market rate.
Good Luck!
- Sharon Patterson, "Sharon Patterson"
- Contributions:70
Your listing broker might have considered having you pay the buyer's agent the going rate of commission to make sure your home was not passed by
AND offered to lower her rate of commission charged you since she will receive commission on the buy side.
- Sharon Lewis, "Sharon Lewis"
- Contributions:4238
Most Realtors will show your home, a lot of us do not look at the commission, we are there to serve our clients needs.
At 4% commission with other brokers show my house? I assume they will get 2% which is better than 0
I only want to be tied into a contract for a few months. Will brokers show my house or is the commission to small? The price is more competitve than other homes around and it is a better property.
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