How Realtors® Get Paid For Their Professional Services

After a successful sale of your property, the real estate commission is shared
among all who assisted in this important transaction. The commission is usually divided four ways: to the listing broker, the listing agent, the selling broker and the selling agent. In recognition of the important roles each played in the sale of your property, each is compensated by a percentage of the commission.

Initial commission established when property is listed between seller and their listing agent (i.e. 6%, 7%, etc). Portion or Co-Op Commission is offered to the buy side representation usually one-half commission.

$300,000.00 Sale Price
6% Total Commission to be paid in deal = $18,000.00
3% paid to Listing Agent’s Brokerage = 9,000.00
3% paid to Buyer Agent’s Brokerage = 9,000.00

Note: Listing Agent and their company split the total commission 50% and Listing Agent may have fees deducted from commission earned as a result of associated franchise fees, expenses, and federal and state taxes.

Why do I set the Commission as a Realtor®?
I am a Professional Realtor® and I have a set rate for my professional services, skills, and representation. As in any profession that is commission based, it is up to the Professional Realtor® to determine their value and fee for services. Currently in Real Estate the Listing Agent & Seller select the co-op commission that is offered to Buyers Agent & Company in the transaction.

Why should someone else be setting the fee for the services that I provide you as my client?
I am not a discount Broker as there is a number of discount broker’s listing and marketing homes and co-op commission can range from $50 to 2%. Because I am NOT a discount broker, I feel it appropriate to negotiate with each of my buyers and sellers to determine appropriate compensation for the services I provide through out a transaction.

My commission for representation is 6% to 7%, per Exclusive Right of Sale Listing Agreement. All or a portion of the commission fee is provided through Co-op Commission as stated in the Listing Agreement. Any difference equal to 6% -7% total owed Brokerage can be built into Buyers total purchase price or added to buyer’s total closing costs and paid at closing to the Brokerage.

$300,000.00 Sale Price of Property
3% due Buyer’s Agent Brokerage = $9,000.00
2.5% paid per Listing Agreement = 7,500.00
0.5 % diff due into buyers closing costs = 1,500.00

Note: Buyer’s Agent and their company split the total commission 50% and Buyer’s Agent may have fees deducted from commission earned as a result of associated franchise fees, expenses, and federal and state taxes.

Payment Option 1
Attempt to negotiate with listing agent regarding the co-op commission being paid out. Make it a part of the terms of the deal per your buyer’s request. As long as the number works out for the seller in sale price and buyer pays what
they are comfortable with there is everything right with the terms of the contract.

Payment Option 2
Funds at closing payable to Buyer’s Agent’s Brokerage for the difference equaling #% commission. This is the best option if you have the funds liquid in a bank account and do not wish to build them into your loan.

Payment Option 3
Build difference into the contract offer asking for the % back at closing. There are limitations through lenders on how much we could ask back, specific to each buyer’s financial situation.

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