Each area is different. I think your representation of the listing boker keeping 3.5% and giving 2.5% is NOT the norm anywhere I have worked. If you did see that somewhere, it must have been a very strong seller’s market. Usually if the buyer agent is offered 2.5%, the total would be 5% and not 6%.

One of our agents called the other day regarding offering a 2 1/2% Buyer Agent Fee on one of her listings. I advised her that if she were taking a 5% listing, that should be 2% to us and 3% to the buyer agent. If that is not the case, then the seller should be made fully aware of the that fact. She agreed to drop back our percentage, seeing that it would be in the best interests of her/our client to do so. I always counsel agents to consider how these decisions affect the client and they always agree.

In very high end markets in CA, I have seen total areas pricing at – 5% splitting it 2 1/2% -2 1/2%. In low priced markets in Florida several years ago, the entire area “norm” was 7% – 3 1/2% – 3 1/2%. Many builders are offering huge buyer agent incentives up to a full 6% buyer agent fee or more. I don’t think anyone can say there is one absolute norm for the entire country, and norms in slower times in the fall and winter vary in the same market vs. high season sale time.

I don’t think any office in the Country can go through a year’s worth of actual sales and find one rate used absolutely consistently across the board.

Thanks for the input.

My final thought on this:

I wonder if the list price to sale price would increase if the buyers agent knew the seller had to agree to pay him out of closing. I wonder if the buyers agents would be as aggressive if they knew insulting the seller may result in their client having to write a check to pay for their service.

As a seller how could this be a bad thing.

Practically speaking, you are right. The buyer could always condition the acceptance of their offer on the seller agreeing to pay their amount of their agent’s fee at closing. This might work in many situations but buyers and their agents would be put in a very difficult situation when the seller would not agree to pay the fee and the buyer really wanted the house. Then what? If buyer is cash poor (most of them), they have a dilemma and I suspect many of them would rather get the house than pay their agent.

This is all solved if the buyer could finance the selling broker’s commission.

Russ

Commissions are financed every day. My friend just purchased a home and put 5% down. With the commission being 6% he financed 1% of the commision. (if you choose to look at it that way) Am I wrong ? It wouldnt be the first time.

The seller just has to agree to pay it out of closing or choose not to and not have a deal. (this is my understanding)

I feel some of these hard hitting buyer only agents (chest pounder types) should be giving the rebates not to the buyers but to the listing agents who are locking in easy money for them.

My sister is the most brilliant person I know, but she doesn’t know as much about real estate as I do. That doesn’t make her “stupid”. Someone who buys a house every ten years just doesn’t have the same knowledge bank and perspective.

Ben, I’m only halfway through your comment, but obviously I cannot give you the mls #, though I can get one of my clients to support my statement. The reason it is priced $200,000 over is because it is a tear down worth lot value, the structure should not be comped against other structures as it was and as Zillow does. That fact may come up at inspection…it’s still STI. We’ll see if it makes it to the end as you say, hope not.