sellers broker/principal broker split

[Account Closed]

Hi all,

Question regarding arranging a split structure with a principal broker. So we agreed on a 65-35% arrangement. However, he says he represents hundreds of exclusive buyers. In which case, any listing or deal I would bring he would likely try to match up with one of these buyers. I guess you can say he's a sellers broker where his interests look out for the buyer?  He said he'd want half of that 65% split in addition to the 35% since he's got the buyer. Now I suppose he's right- its like we-co-broked. However, isn't it only fair that I should be allowed to market the property properly and receive 65%. I'm not trying to prevent him from making money as much money as he can, but something seems off with such an arrangement, that primarily results in him effectively keeping 67.5% on most deals. Maybe its this is common with off-market listings? Im not sure..

How can I better negotiate/ structure terms in this situation? Or what should I be asking for?

TIA

[Steve Milford]

Whatever you work out is what it is. Its all a worry for nothing in my opinion. Easier to see in dollars and cents. If the traditional model is used, hypothetically if gross commission for the whole transaction was $10,000 split evenly between listing and selling agent, each side would receive $5,000. Initial split means that he would receive $1,750, leaving $3,250 for you. Now if all the $10,000 commission goes to the same brokerage, he receives $6,750 (as principal and buyer's broker) with $3,250 remaining to you. In the end you made the same.

If he is NOT the Buyer's broker, then he is then he only receives the initial 35%. In the end, it doesn't matter because if another agent at another brokerage presented the offer, you would be splitting the gross commissions with them.  

You should still be able to market it as you see fit, appropriately. He may provide oversight as your brokerage would be providing dual-agency, but it is your duty to represent the seller as their fiduciary. If not, I would find a different brokerage.