Profile picture for kmd2buy

Commission Sharing from Realtor

I have heard that some Realtors share the commission that they receive from a home purchase with the buyer. How often does this happen and is this a valid question to ask my Realtor?
  • February 08 2010 - San Diego
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Answers (11)

Best Answer

Profile picture for wetdawgs
It occasionally happens.   It is most likely to happen if you have found the house yourself and are asking the agent to just write the contract for you. 

Be aware in commissions, that it is split four ways.    If the total is 6%, one typical breakdown would be 1.5% for the buyer's agent, 1.5% for the buyer's agent's broker, 1.5% for the selling agent and 1.5% for the selling agent broker.  (The percentages can vary so this is only an example).   As a consequence,  the agent you are working with may be getting a much smaller percentage than you expect.
  • February 08 2010
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For all the "haters" out there that insist buying a house is only a few days work for the Realtor are obviously not agents.  Buying a house is NEVER a couple days work.  Often months of searching for a property, previewing properties without the clients even being aware, countless hours throughout the day looking for new listings...all that before an offer is written. 

Then the offer...are there multiple offers...tell me Mr. Hater....who's offer is going to be accepted....Mr. Hater with no expeience or an experienced Realtor.....who is going to know how to get the septic/well/zoning/unpermitted structures on property issues resolved...just to name a few..very few...of the issues that arise during the transaction. 

Please do tell us Mr. Hater will this property qualify for FHA financing and what is the min down payment?  Well here we go again with questions that Mr. Hater will not have an answer to....what do I have to disclose and what are the timelines for disclosures...what is recent legislation that may affect me and my family if we short sale...we have a house on 90 acres with an income producing avocado grove...is it a business or a residence...will value be given to the land?...and the list goes on.

I'm sure Mr. Hater doesn't think a cardiac surgeon should get ten's of thousands of dollars for one surgery...I mean really what is that...3 hours at 15K an hour?  Maybe Mr. Hater can buy the book "Cardiac Surgery for Dummies?"

Not to be negative but here it is in a nutshell

"Contempt prior to investigation" which sumarizes a quote by William Paley 1794.
Terry Dyer Realtor
Broker 01144254
  • May 30 2012
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Profile picture for Dunes ..
Woo Whooo..an oldie but goodie!

Everyone should read the Information on the Department Of Justice
Anti-Trust Division Web Site about all the options Consumers actually have
New business models are emerging that allow consumers to save thousands of dollars when they buy or sell a home

like Consumers can save thousands of dollars in commissions

"New business models are emerging that allow consumers to save thousands of dollars when they buy or sell a home. Where these practices are allowed, some buyers' brokers are offering refunds on commissions, and some sellers' brokers are charging only for services actually used. "

or

"Ten states forbid buyers' brokers from rebating a portion of the sales commission to the consumer. Eight states require consumers to buy more services from sellers' brokers than they may want, with no option to waive the extra items. HUD recently clarified its rule that rebates are permissible under RESPA as long as they are reported on the HUD-1 form." What are the laws in your state?

Don't get all your info fron people selling their specific type of Services
Inform yourself..do some basic research
This is a HUGE Financial Decision an....so do not be Lazy or foolish or uninformed
  • April 11 2012
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Profile picture for Arcanlaw
At $10 an hour a $500K sale would put you in at about 1500 hours, or about half a year working full time.

At $50 an hour a $500K sale would mean you're putting in 300 hours, or over 37 FULL DAYS of work!!

And this is only at 3%.  Find a good rebating agent, don't buy the "we do so much work for you behind the scenes" angle.  BS.
  • April 11 2012
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People who bash realtors really don't have a clue as to how many hours they put in and what the real comission is. Wet dawgs gave a good explaination of a typical transaction. These complainer think everone should work for $10 an hour.
  • April 11 2012
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Profile picture for Arcanlaw
Real estate agents are almost never worth the full commission they charge.  On a $500K house, who in their right mind would give someone with no qualifications besides a simple REA course $15K for a few days of work?  Ridiculous!!  Find a qualified agent that will rebate you some of that commission - more often than not they will even be a better agent as they understand the scam that is standard commission structure in real estate and are willing to work for (more) honest pay.
  • April 11 2012
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Yes, it's a valid question. Never be hesitant to ask, the answer may be a pleasant surprise.
  • February 11 2010
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This same poster asked a question about Real Estate offices being closed on weekends. It seems, they may have a case of "endless cake" syndrome.
  • February 08 2010
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It's a great reason for buyers and agents to have a buyer brokerage agreement in place, so that each party understands up front what the compensation will be.

I'm hoping that in the meantime, buyers will start thinking of ways to share the profit when they sell with the agent that got them the property in the first place.
  • February 08 2010
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There are lots of different real estate models out there, and some of them offer a buyer's rebate.  An example would be Redfin and there are local San Diego companies that offer buyer rebates.

As the other agents here have answered, commissions are how we make a living and are split with Brokers.  Also since agents are self employed for the most part, they have to pay taxes and business expenses out of the gross commission paid.  What looks like a huge amount of money is spread out to many hands.

When you start working with an agent this would be a good question to ask them.  Some agents will be willing to do this, others will not.  

Commissions offered in the multiple listing service will vary - so usually the rebate would be a percentage of the gross commission.  Real estate commissions in California are negotiable.

In life I have found it best to pay a professional what he or she is worth. Purchasing a home is the largest single expense you probably will have in your life and having an experienced professional REALTOR® on your side is invaluable.  Saving a thousand or so dollars and having someone that is a weak negotiator (after all they are giving their income away) may not be your best choice.

Does that mean you won't get good service from an agent giving back their commission?  Not necessarily but in life you usually get what you pay for.  You can hire a $100.00 an hour Attorney or a $500.00 dollar an hour attorney - there is always a reason the one can demand 5 times the pay.

Being a real estate agent is hard work, we have to be available 24 hours per day 7 days per week.  We have to understand the local markets and real estate laws.  We need to be able to refer to reliable real estate lenders, home inspectors, escrow and title companies, and the experience to get you through the transaction.

If you want a rebate have the conversation early with the REALTOR® that you choose.  They will know your individual circumstances and be able to decide if they want to make that business decision.

If you are using a lender you can only receive so much back on the HUD-1 so make sure your lender understands your arrangement with your REALTOR®.

Besides looking for a rebate, also consider the honesty of the agent, experience, real estate agency, technology, and past references.  As my father used to say - A cheap man pays twice....

Reminds me of a funny story I posted a while back

http://www.sandiegolifestyle.info/2009/07/cheap-helicopter-ride-real-estate-experiance/

 



 

 

 
  • February 08 2010
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As a real estate Broker, I know you are talking about a commission rebate.  The real estate commission in NJ has found this to be legal, but of course, the realtors don't like it.  In CA, I don't know.  It certainly can't hurt to ask your sales person, but I wouldn't get my hopes up.  The commission is the only way a realtor gets paid.  For all the work they do for you to get the best home at a fair price I would think you would want that person to get paid.  They are already sharing the commission with their office and possibly another office.  The real estate salesperson only gets a small share of the commission. 
  • February 08 2010
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