Uneven Commission Splits
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.
Replies to This Discussion
-
Permalink Reply by Eric Mieles on
-
Thanks Camelia and good morning to you. So great question. I would never, NEVER bypass a listing because the commission is low. If that home fits my buyers criteria then I'm showing and if they want it I'm going to fight to get it.
My goal next time around in this scenario is to
-disclose it to my buyer that this is what's happening and unfortunately the listing agent feels my work doesnt warrant equal share
-address it upfront with the listing agent and try my best to negotiate and show him the value I can bring to the transaction ie great buyer, educated, ready, well qualified, submit DU Findings rather than a measly pre q etc
And mostly go out there and use my mouth and hustle to start educated my community on the inner working of this short sale niche. Really go out on a mission to produce great content that will show sellers what's going on behind the scenes, show buyers what to look for, tell sellers they don't have to just fall for whatever the agent says and everything ,else that should be brought up and left for the community to be empowered to make the right choices!
-
Permalink Reply by Jeff Payne on
-
Good responses here. The advertised commission in MLS is what gets paid, except if the lender reduces commission, we split thre reduction 50/50 on a short sale. I always split 50/50 on every deal, I am a listing agent but always err on the side of the buyers side not taking a cut if at all possible. I want the buyers agents to show my listings first.
-
Permalink Reply by Kevin - Greenville, SC on
-
I pay 3% maximum because my Broker won't allow me to pay anything less unless the Bank reduces it (then it's 50/50). I can keep more than 3% if the Bank approves more than 6% (total) if my client approves. I've had this happen a couple of times with Litton.
-
-
Kevin, your broker is telling you that you have to pay 3% on a co-broke? So if you take a 5% listing, you have to pay 3% to the co-broke?
-
Permalink Reply by Thom Colby CA Brkr 888-391-5245 on
-
Maybe it's time to look for a new Broker !
-
-
Ya think? I could not or would not work for a broker who tried to micro manage me. At KW, as you know Thom, we have a cap on commission and I cap usually in 30 to 60 days so it does not really affect my broker on how much I charge, they only get so much out of me anyway :)
-
Permalink Reply by Susan Sandoz on
-
Excellent Eric! I do the same!! Thanks to all the agents who have brought their buyers to my listings over the last 20 years. I know and have always known how equally valuable or more you are.
-
-
It is very simple. The commission offered in the MLS is the amount the LIstign agent offered as coop - this is whole fundtion of teh MLS itself - to offer cooperative commission to other brokers for selling your listings. It is, was it is. If you offered 2.5% that what they get. As for short sales, our MLS rules require it be stated that any reduction of commission due to short sale must be clearly define "the method the reduction will be calculated" so rather than commission will be split 50/50, most Listing Agents here in SoCal now use "Any reduction in commission by short sale lender will be reduced equally to each brokerage" - so if there is a 1% reduction, each side takes a ½ percent reduction.
As long as it is spelled out, it's fine.
You offered 2.5% and it's not been reduced by a lender so that's what the other side gets - period.
Good luck,
-
Permalink Reply by nancy calderon on
-
Perfectly stated. Even without short sales I have seen agents list and offer 2.5 and keep 3.5, and I cant complain. As has been stated, I saw the commission before I showed property so where is the problem. Dealing with short sales, I also know going in that there may be a problem with reducing the commission, so again, eyes wide open, I move forward. I also , like someone else on this board practice in Illinois, and it is common to put on cc that any reductions will be split 50/50. I usually split the commission 3 and 3 to begin with, but am starting to rethink that stragegy, since most of my Short Sales seem to go through 2 or 3 contracts before we get one that sticks... Perhaps, if you want to stay in as much control as possible (in a short sale!), you should concentrate more on taking the listing side rather than the buyer side.
-
Permalink Reply by Evelyn Santiago on
-
Nancy -
Well stated - eyes wide open - MLS stated split is what you get - don't like it - get it from your buyer - should not be an issue if you know how to position yourself as a "short sale" expert or whatever you believe to be.. I too am in IL and how about splits on rentals???? Talk about uneven - good one for another discussion.
-
-
If we all had the same level of expertise and gave our short sale buyers the education that Eric gave perhaps his theory would hold water. The reality is that the listing agent is the one doing the bulk of the work to get the offer accepted. They are the ones that either are on hold for hours, being transferred uptem times, hung up and dealing with "negotiators" that negotiate paper through a maze that is constantly changing. If my business model dictates a different split than you think is "ethical" than you should figure out either a way to get paid by your buyer to make up the difference by actually having them sign a buyer's repreesentation contract indicating that they have to make up the difference if the "brokers" commission is less than "insert whatever you deemed you deserve" in a short sale transaction or all transactions. Buyer's agent should be able tonpresent a short sale offer with ALL required disclosures, copy of earnest money and pre-approval letter and make periodic status calls to listing agent, assure buyers that the offer is still being worked on despite months of "under review" status calls, hold prayer meetings at appropriate times and then once approval is reach scramble to get buyers lender to meet the seller's lender deadline for closing despite having a buyer that did not want to apply for mortgage until it was a "sure" thing....
Let's remember that the commission is earned by the listing broker who offer's a portion as an offer of cooperation to members of their MLS to bring a "willing and able buyer". If the offer indicates that any reduction in commission by lender is split "insert %" then you need to assume that your brokerage's split may suffer a reduction and make arrangement's with your buyer to cover that possibility instead of complaining and moaning about unethical behavior.
If you have not noticed our world has changed due to short sales. So our business models have had to change along with it. I have been on both sides as a listing broker and as a buyer's representative. The commission on short sales are a moving target which the lenders will use to undercut since they are fully aware that we can not ethically use to prevent an approval since our fiduciary duty is to our sellers.
So as business people we need to stop fighting among ourselves and either accept the new way of doing business or look to those we are representing and who we are assisting in getting rid of tens of thousands dollars of debt for the shortfall on listing side or to our buyers who are getting amazing deals for the perceived reduction in fees.
So you can either work with buyers who are only interested in traditional sales or you can work with buyers that are educated to your worth in doing a short sale and sign them to a buyer's rep contract where they will pay you what you deem you are worth. Two choices, right? Oh, wait...3rd choce.....you can quit real estate and get a "real job", you know a 9-5 where you make x amount every week no matter how hard or how little you work!
Each side has value and works differently to achieve the same goal - a successful transaction! Look for solutions instead of slinging accusations on your fellow agents about "ethics". Speaking about ethics....how about those lenders????
-
Permalink Reply by Kimberley Kelly on
-
Fantatic..ha-ha..List Agents do the work. Experienced List Agents with Short Sales deserve every cent!
© 2024 Created by Short Sale Superstars LLC.
Powered by
**********************************
like buttons