7% Agent Commission?

[Peter Skobic]

My agent says that 7% commission is normal in Georgia so as a buyer's agent her share of the commission would be 3.5% instead of the 3% that I'm used to seeing. Has anyone seen this before?

[Joel Owens]

Hi Petar,

I have lived in GA all of my life. I am a broker and 11 years in the business.

I am telling you this because I have seen it all practically over the years.

I focus on larger commercial deals.

7% is VERY COMMON here especially if you are buying what I call the low end investment properties ( sub 100k houses ). It's typical to offer more commission from the seller because of the low price point.

Think about this. Established agents usually work in much higher price points. So if it's a new agent they are splitting 50/50 likely with their broker.

75,000 investment property X .035 = 2,625 / 2 = 1,312.50 to the agent.

That is BEFORE all other business expenses. I personally do not like the bonus approach. It is saying hey stiff your clients interests and we will pay you one percent more. I have seen this approach fail many times. Instead the seller should just offer an above market co-op to the buyers broker and price it appropriately to sell. That will usually get you way more activity. If you as a seller offer a bonus with a bunch of crap conditions tied to it to give you an out  then a lot of brokers and agents won't even show it. They also tend to think the seller is going to weasel out later on and stick it to the broker/agent on a technicality.  

Land listings here can be 10% and 5/5 split.

If the agent is getting 3.5% from the seller then it's usually in the listing agreement stipulated as a co-op from the listing broker off the total commission.