Real Estate Commission While Agent Selling His Own Home

[Jaago Viitkin]

Hey,

I am an agent and I am selling my own property. I am thinking to offer 3% to buyer's agent, but mark 0% to listing agent in Exclusive Right to Sell Listing Agreement. I am working in a bigger real estate office and always have to give one copy of listing agreement to my broker of record. 

My question is, HOW COMMON IS THIS? Anybody else doing it? 

I renovate many houses every year and would like to save when selling. I am not sure how brokers look at it, since once house is fixed and resold commission is much better than when buying.

Thanks

[Joel Owens]

This is why I currently have no agents at my commercial brokerage. The tend to be all takers and give off little to no revenue for the headache provided.

Some of my friends watch and babysit agents instead of selling and just add tons of them to a brokerage. That's not something I can get excited about.

To the original poster you need to re-read your IC ( independent contractor) agreement you signed when you joined that brokerage. It should mention in a section somewhere about selling your own properties and what the fee structure is. If it does not you need to get with your principal broker or the (designated broker in charge ) of the firm to find out.

Your post it sounds like you are not selling a personal residence you live in but buying and selling off rehabbed properties. I would not think a head broker would let you list no fee on your side and bring no revenue to the brokerage. They provide support to you and take all the risk with investment resale properties and their E & O policies and then get nothing in return. Why not get your brokers license and take all the risk yourself if you do not want to pay anything?

You can't have the cake and eat it too. This is another reason I do not like taking on agents. They have a think of themselves mentality while offering little to nothing for the brokerage. This is often why brokerages do not like investment only type agents versus those looking at it for a career where it can help the brokerage flourish and win long term as a team effort. Those just looking for the cheapest structure and deal of the day move from brokerage to brokerage as re-treads. The brokerages focused on quality would rather have 10 great agents dedicated to the firm then 50 constantly cycling in and out with lot's of grief and drama.

Your structure might call for 10,000 minimum to brokerage and then rest free until year starts over. You might have hybrid of low fee per transaction and monthly desk fee. You might have 80/20 split until certain number is met. Maybe they allow free resale of personal live in residence once a year but other properties there is a split etc. it could be over  a 100 different ways and models.

If you are selling say a 100k house and 3% to the brokerage in IC agreement and were on a 50/50 split then even if you take nothing the brokerage would still want 1,500 in that deal. The listing agreement is not with you anyways but the brokerage for the commission. You are an independent contractor working on behalf of the brokerage so cannot make commission decisions anyways.

You see some agents agree to low commissions to try to win business. Example they agree to 2% their side and 3% to selling broker for 5% when brokerage did not agree to that. So you then get 2,000 but brokerage bases it off of 50/50 split of 3,000 so they still get 1,500 and you get a whopping 500 bucks.

If your brokerage does not allow a low fee etc. then you might could get a flat fee company to list it and you deal with negotiations as the seller anyways.

Some brokerages you need to check as well do not allow advertising if you are going to take under 6% commissions as it can erode the other broker and agent base at the firm that charge 6% or higher and confuse the public on what fee structure the overall brokerage uses.

Good luck. No legal advice given.