Please do a simple slice and dice of how the commission are split between the listing agent and the real estate agent who brings in the buyer. Examples would be great.
Also, additionally, what if the buyer has has decided to go with Buyer Agent. How does that affect? Are these fees ever paid for by the buyer?
I am a potential buyer in Ca.
If I use the listing agent to show me the home, can I use my own real estate agent (either a buyers agent or a regular real estate agent?)
First of all all commissions are negotiable in a real estate transaction. IN most instance the real estate agent will tell you that my agency charge 6 points per real estate transaction.
Each real estate agent has a contract with the broker with whom the work with as required by most state laws. This commission split within the company will vary depending on the amount of experience a real estate agent have as well as the amount of business this real estate agent bring in the front door that actually closes or end in earning money for the brokerage firm.
1. Most of the time the listing agent and his brokerage firm command a commission of 6 %. If this listing agent is the selling agent as well as the listing agent then his brokerage firm retains the entire 6% commission. The brokerage get 3% and the listing /selling agent get the other 3%. This is a complete in house sell.
2. If the home sell through the efforts of another agent called a buyers agent, then the commission of 6% is split equally between the two brokerage firms thus the selling brokerage firm would get 3% and the listing brokerage firm would get 3%. The inside commission split between the agent and the broker is normally half so in this case the brokerage firm would retain 1.5% of the commission and each agent would get 1.5%.
If you hire a real estate agent as your buyer’s agent, the thinking in the real estate community is that since the seller has normally signed an agreement to pay the listing agent a 6% commission that the listing agent would share this commission with the buyer’s agent. This make sense and is the norm.
Now if you find a For Sale By Owner (FSBO) and decide to purchase this property, you might be in trouble. You signed a contract with this buyer’s agent. The seller did not sign an agreement with anyone therefore is under no obligation to pay your buyer’s agent.
For some reasons the real estate community think that the seller should accommodate the buyers agent and pay at lease 3% of the sale price. Think about this. Why in the name of of all hell would you pay someone that you did not hire?
Some even think that since the seller is not using a real estate agent the buyer should make an offer of 6%-7% less than the sale price.
This person is selling his house by himself for a reason, he want to get the maximum of his equity in his pocket without sharing it with anyone what so ever.
That is to say if you purchase a house from a FSBO you might have to pay the commission of the person you hired. Again the home owner in this case did not sign an agreement with any agent and is not legally or morally obligated to pay the agent you hired.
I hope this has been of some benefit to you, good luck.
"FIGHT ON"