Looking for some input as to what other agents feelings are regarding uneven commission splits. I recently had a listing agreement with a 6% commission and advertised at 2.5% split on MLS. It is approved at 6% and sent HUD over to buyer and agent is making a fuss because he feels this is unfair. Mind you its only a 25k property but just curious as what other agents opinions are as he is claiming that I am being unethical.

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I don't understand. Was the co-broke 2.5% in the multiple listing? I'm assuming it was. In my mind he knew that going in so what you get from the lien holder is irrelevant.

Yes it was 2.5 in MLS and no where was it mentioned the split would be 50/50 nor was the coop agreement written up that way.

If that's would you put in my opinion you only owe 2.5% to the Buyer's Agent regardless if the Bank paid 6% total.

At least in Illinois, all MLS disclosures that are short sales state clearly that commission is subject to lender approval.  Smart agents go further and state that any commission reduction is shared 50/50.  The split is disclosed on MLS, so if I say the split is 2.5%, and I earn 4% after your 2.5%, too bad.

Well I just got a little smarter....I dont make any mention to 50/50 split on anything but I will make sure that I do now if reduced.

Mike. I'm completely with you. Allowing the co-broke to be reduced after it is posted in the MLS is foolishness and cheapens the MLS. Co-broker should be guaranteed. PERIOD.

Offer a fair co-broke and pay it regardless of what the lender may or may not agree to. And buyers agent need to be working under an agreement where their buyer guarantees them a certain amount.

I had a lender reduce the total commission to 3% once. I honored the 2.75 co-broke that was offered. This was a 40k transaction that took me almost a year to close. My share of the commission was $100. However, the seller paid me on a prom note and was happy to do so.

I have NEVER reduced what I advertised in the MLS. The comments this agent, Im sorry "broker" made were pretty much insulting. At the end of the day I really dont care what he thinks but  just wanted to get others opinions. Thank you for the feedback!

 

Hi Mike. Let's be a little careful talking about commission splits. I do not split commission 50/50 either. The co-broke in the MLS is what we pay. If the agent doesn't like it....well.....who cares. 

Thanks everyone for your feedback. What a joke. Normally I would have just split 50/50 even though not advertised if was higher but this agents comments were downright insulting so he is not getting another nickel of the whole $118 difference in commission out of pure principle.

I agreed with all the response above. What you get should not be of any concern with the buyer's agent especially if you are getting  what was promised in the MLS.. I never put 50/50 .. I put 2.5% and they get that even if it was reduced.. that's it..no more no less. In one closing  the buyer's agent was mad that he is not getting 50% of the total commission, I reminded him that he is getting what was in the MLS....  

Okay so I do a lot more listings than buyer transactions however due to my knowledge in the short sale niche and being dedicated to getting better I have been working more and more with buyers.

I personally feel it is my duty to guide them and give them a better buying experience by sharing with them all the intricate details a short sale transaction may have. In doing so I just closed on a deal this week with a fellow Superstar who's on this board and respect greatly. This post is very relevant to what took place.

When we made our offer in October it was accepted and we moved forward with the transaction. Fast forward to our close this week and I was upset to see 2.5% on my side.

Now before I go any further I'm a fellow short sale guy and understand fully what we all go through. However I did have an awakening if you will after this closing.

I DON'T BELIEVE it is ethical to offer lower commission to the other side. Yes guys I know I opened a can of words by saying "ethical" but I have to admit it's what I believe.

There is just as much value, if not more from having a great buyers agent who:
-educates the buyer on what a short is, how it works and the scenarios that may play out.
-explains that there may be a deficit and asks if willing to make up the difference
-does an amazing discovery with the listing agent to determine if the time investment is worth it
-prepares the buyer for the time frames
-doesn't nag the listing agent and understand it will take time
-prepares and is aggressive with the buyers lender understanding there is a deadline to meet

I really believe guys that there is great value in two pros working TOGETHER to get a deal done in todays market, save a seller from foreclosure, and get a buyer one of the potentially biggest life changing moments of there life.

I have made a shift this year and turned my back on the whole 3rd party/attorney processors of the world. I don't care if you have to use an attorney or processor to do your work and it shouldn't be my problem or my pay that goes to cover your overhead. My buyer should not be responsible to pay your fees and neither should I.

I think we need to get away from this "so what, I don't care, milk all that I can mentality" there is value in working with great pros on both side and for that we BOTH are deserving of equal share.

My mistake is that it was in the mls and I had no recourse. I'll never make that mistake again. In no way was this a slight to my fellow pro who got the job done I just really feel that we need to start looking at all sides and not just the sometimes selfish nature of our side of the world.
Good comments Eric. So I'm curious as to how you are going to prevent this in the future. What will you tell your clients when you won't submit an offer for the property they want?

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