If there is no buyers agent does the listing agent pocket all 6%?

Question

I'm trying to understand exactly how agent commissions work.

Is this correct - When a seller lists a house, he comes to an agreement on commission with the listing agent and this is typically 6%?  What happens if he only wants to pay 4% or 2% total?

If the house is sold, and if there is no sellers agent, the listing agent keeps all 6%?  Or does the seller typically pay less commission when there is no buyers agent?

Thanks!

Brie Schmidt · Answer

The seller agrees to pay a percent to sell their house. If there is no buyers agent the full fee is still due to the listing agent. The listing agent could act as a dual agent with permission from all parties, or the buyer could be unrepresented.

That is why I never understood people who thought not using a buyers agent was going to get them a lower price, it just gives you less protection.

Marian Smith · Answer

I don't know where anyone gets the idea that a listing broker pounds the pavement to find a buyer.  the listing agent makes sure the price is as high as it can be with justifying comps, makes sure the listing is accurate....with plenty of photos that inspire a desire to view in person...and is a buffer between negotiating parties and a sales contract proofreader (and ideally a negotiation advisor, but incentives do not allign in this well.)  Some listing agents have good reputations for listing houses only after they are completely ready to show...saving time for realtors with the average client ie. One who prefers a new home but willing to look at resale to save money or get the location they want.

The agent who brings the buyer sells the house.  Or the location sells the house.  Or the price and condition.

So if you don't have an agent and you have a house you seriously want to offer to buy, find an agent who gives a rebate to the buyer...or ask for one from the selling agent if you place an offer through them.

Joel Owens · Answer

It's all negotiable.

There is no set commission but you will find areas tend to have certain percentages in the MLS and listing agreements.

Do not focus on the commission so much as being able to sell your property. You do not want to step over dollars trying to save pennies.

Joel Owens · Answer

As a broker the perspective is how easy is the property going to be to sell and how fast will determine a lot.

If the seller wants ultra top dollar and you have to make a hundred calls and pound the pavement for a month to find the one buyer will to pay that premium than that is worth a lot of commission. The reason is it involves a lot of time and energy for the end result of a closed transaction.

If a property is grossly underpriced someone might say they would take less of a commission because it would sell fast. The broker might be better off buying it themselves or getting it under contract to assign it instead of taking a commission to list it for sale.

Example why list a property with a client relationship where you could make 2.5% giving them a deal on a 100k house when you can make 15k buying it yourself??

So smart brokers/agents will look for a situation that is advantageous to them. A broker/agent that isn't worth much will just do anything for anyone without any thought to value to it.

Just the way I see things.

Jay Hinrichs · Answer

@James Wise

concur I would do the same MOst of the OREO brokers I know that sell low value properties say 5 to 20k charge a flat fee of 2k .. which is wholly reasonable in my mind.. I mean who is going to work on an escrow for some investor who is a pain in the A--- buying a 5k house and make 300 buckaroo's.... I always laugh at the BP post ragging on Brokers because some investor trying to buy sub 20k house expects some kind of royal treatment. !!!

James Wise · Answer

It is all negotiatable.

I have heard of some listing agents who will reduce commission if there is no buyer side but it is pretty uncommon.

I have had sellers try to get me to list their homes for 3% I have always declined.

If I list a house for 6% commission that is the commission that will be paid by the seller no matter if there is a buyer agent or not.

50% to the buyers broker  is common but offering more or less then a 50/50 split also happens.

Darrell Shepherd · Answer

I have bought with no agent and negotiated a 3% reduction in commission plenty of times.  The only time I had a problem with that was a new home purchase in a neighborhood and the other agent was acting like I stole something from her and was uncooperative and hostile through the whole thing, even though I had my end covered.   I've also worked in my contract a 4% commission if the agent does both sides, 6% if there's another agent when selling.  Like has been said, its all negotiable.

I'm licensed, but still use agents regularly, good ones bring plenty of value to the table, but I do expect them to earn their commissions.

Albega Roman · Answer

i also think that it is not good to focus on the commission so much as being able to sell your property.

Mike Johnson · Answer

I can pretty much guarantee you there are unethical Realtors who would try to convince a seller to take an offer that was lower than they wanted in order to secure 6% instead of 3%.

James Wise · Answer

@Jay Hinrichs Yes if were talking high end properties I am open to entertaining more discounts.

Generally 6% is the lowest I will go for the 50k-150k range.

I also work with a lot of distressed low end homes were Im charging a flat fee commission which ends up being about 10-20% of the selling price.

If there is no buyers agent does the listing agent pocket all 6%?

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