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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The angels are singing for you as I write!  Your response is articulate, to the point, and (how fortunate we all are) lacks typographical and grammatical error.  An educated real estate agent . . . . Hallelujah!  (I suppose it doesn't hurt that I totally agree with you)  Adapting to the latest world of real estate is surely a challenge, but it is at least a small part of how we survive in this industry.  Thank you, Evelyn, for taking the time to write such a fine piece and for clearly knowing how to succinctly articulate your position.  

The comment "unfortunately it’s easier to bitch an moan about "fairness" was as "Articulate" as can be!!!

 

lol Just joking (Not really), Anyway once again guys I understand you defending your position and we all have views on this subject and that's what makes this board great. I want to state that I never disputed that what is in the MLS should not be the final say so or that the agent was wrong and should have given me what I wanted. I clearly stated and admitted it was my fault and I really have no recourse.

I also said how I would handle it next time and I don't believe I am "Bitching and moaning" rather I clearly and "articulately" stated how I plan to take action and hopefully prevent it in the future.

Also I do apologize as I didn't mean to come off pompous or arrogant when claiming my commission haven't been reduced. However I did state "I can't remember the LAST time my commissions were reduced" Big difference!

 

I do not "split' my commission.  I put in the MLS what the Buyer's broker will receive..no matter any reductions or not.  I'm the List Agent doing the work to get it done.  I also respect my Buyers Agent and there should be no gray area as to what they will earn.  

Good morning guys. Okay so can I ask if you take a SS listing, advertise 2.5% and then get the buyer yourself and close the deal. Will you take the .5% and give it away, refuse it, pass on to buyer as a rebate..etc??

I think we know the answer and I think I know the reason why.......because you will say you deserve it!

Again I will state I'm one of you guys. I love this stuff and CHOOSE to work in a niche I really feel that is making a difference. As for Evelyn comments yes our world has changed as yes we have had to adapt however where did it change where we can't work together as two great agents on a transaction to get a deal done and both be equally compensated for our good work??

Please note I'm not here complaining or crying about it I'm here having an intelligent discussions about issues in our industry that quite frankly are issues that need to be discussed. Please don't sling mud and just throw out "go get a 9-5 if you don't like it" it's kinda of disrespectful and shows your inability to have heathy debates about issues within our niche.

Yes guys I know you bust butt getting the deals done. Again I do more listings and bust butt too andi understand however let me state

1. I don't know when the last time was that I had my commissions reduced (seriously)
2. If your going through 2,3,4 buyers than maybe your not putting in the hard work that some claim and maybe you need a great buyers agent to come along and "HELP" you save your seller!!!

Eric:  My first paragraph addresses the fact that if all agents had the same level of "expertise" that would not be an issue but unfortunatley agents on both side of the transaction have different levels of expertise.

 

Whether I am on the list side or buyer's side I take responsibility on doing whatever I can to get the transacton done whether  it's a short sale or traditional sale.  My personal experience is that a lot of agents are not making the effort to learn their niche especially in short sales.  Just because this group takes the time to learn more about short sales by taking additional training beyond required CE, or beyond the "short sale designation" certificates/designations that are cropping up every minute by learning from others that are in the trenches doing them themselves instead of paying 3rd party negotiators/attorneys etc. does not mean that everyone in our industry is doing the same.

 

What is listed in the MLS as our co-op is what we get unless you negotiate it before you show the listing or figure out another way to get what you deem is your worth. 

 

Bottom line we are responsible business people and making comments about ethical or non-ethical behavior is a touchy subject espcecially on public forums such as this.  I value every single buyer's agent that brings me an offer and that is why I will go ahead and go the extra mile by mkaing sure I get all the documents that I need to actually have a contract when they don't know what to submit, forget to submit or it's their first deal.  It's my job to make the deal work for all involved.  It's my listing, my seller, my responsibility to get it done. 

The buyer's agent can assist me but he can't speak to the lender, or collect the paperwork, or keep the seller from filing BK or vacating the home or taking "his upgraded kitchen cabinets" or a myriad of other challenges.

As you stated we all have to work together but unfortunately its easier to bitch an moan about "fairness" instead of finding the solution to your perceived problem.  If both the government and the lenders realized that a short sale involves more work from real estate professionals and gave us the respect we deserve since we are bringing them a solution to the non-performing asset that they hold, we would not be "throwing stones" at each other.

 

As my Board stated when I discussed a commission issue that I was trying to prevent  -"if life was fair we would all be rich, beautiful and famous". 

 

You have been lucky if your commission has not been reduced but since I have been doing these before they were "popular" and the lenders had dedicated staff my experience has been different, as have the experiences of many on this forum.  Every deal is different and they sometimeshave additional surprises that we don't anticipate such as a HAFA deal where the buyer is also a buyer's agent and can't get any of the commission and they want the commssion or the deal is off...or the 3rd party company that the lender outsourced the work to wants to get paid 1% from the real estate commission, etc.etc..  So far, I have been able to pay the buyer's agent exactly what I offered on the MLS and what I have between my seller and myself regarding how that commission is split is my business as long as the bank agrees with the total commission.

 

Oh regarding point 2...really...now who is gtting a "dig" in????  It's just human nature to protect our position by throwing a zinger even in the most intelligent discussions including for the highest office of the nation, so what can we all expect when we are having a debate on a salient point such as uneven distribution of a commisssion.   Your point is well taken.                 

Bravo, Evelyn!  (sorry I didn't scroll down before my earlier reply to you)

Again, on-point and professional.  Thank you!

I don't think most buyer's agents, unless they also list short sales understand how much more work the listing agent does to negotiate a short sale. Because I am in a high cost area of the Silicon Valley most of my short sale commissions get cut from 6% to 5% so I just offer to split commission 50/50 as well as reductions. 

Just an FYI, Thomas, it is required in my state to disclosure and get affirmation from my seller client regarding the payout posted in MLS.  No dance required.

I don't understand your comment

"I think this problem would be reduced if the listing agent had a discussion with her seller about this type of reduced buyer agent split. The listing agent's dance would be fun to watch.

Do you think a seller would be happy about a reduced buyer's agent incentive?"

 

In our state, the Listing Agreement signed with the Seller clearly outlines the Total Commission (for both sides) as well as the commission being offered to the Selling (coop) Agent so why would anything be a surprise to the seller?

As a broker/owner I was taught that the compensation for selling agent is whatever is promoted on the MLS period.  The selling agent doesn't even have the right to question it.  The person who said be careful about discussing it is correct.

 

The only caveat could be if there were specific language in the final approval dictating commission split.  I agree we work very, very hard on short sales.  I know the buyer agent brings the deal to the table.  But it is ultimately the listing agent responsibility to put in the hours and hours of time and efforts to bring the deal to closing.

Hi Mike,

There's no doubt that what's posted on the MLS is what you owe the buyer agent.  It is perfectly OK to tell the other agent to grow up, learn the rules, and stop being a crybaby.

However, I always advertise 2.5%, but split 50-50 with the buyer agent if the lender allows 6%.  I tell the buyer agents up front that we'll split the commission if it goes above 5%.  I believe, as a result, I rarely have to sell my short sale listings over and over.  The buyer agent appreciates the consideration, and helps me keep the deal together. 

 

Eric, I'm curious.  If the commission had been reduced to, say 4%, and the listing agent came to you and said, sorry, bud, I have to reduce the 2.5% I offered, would you have been willing to do that?

Value to your client is irrelevant to this discussion.  You were offered a 2.5% fee for bringing a buyer to the table.  You accepted that offer and then want to grouse about it later.   The LA did exactly what (s)he offered to do.

Suggestion: have your compensation addressed in the Buyer's Representation Agreement.  Your agreement with your buyer is that you get x% of the sales price of the home. If the amount paid through the MLS is less, the buyer writes a check to you for the difference.

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