Comments on: Who does the buyer’s agent’s commission belong to? Maybe… the buyer’s agent?

By: Billable Hours, Straight Commission, Hybrid or Both? | Real Central VA

Billable Hours, Straight Commission, Hybrid or Both? | Real Central VA — Mon, 02 Feb 2009 15:02:24 +0000

[...] One giant stipulation for this somewhat hypothetical discussion is this – in this make-believe world of fairies and unicorns, the buyer pays the buyer’s agent and the seller pays the seller’s agent – in other words, we have succeeded in rending total control of the buyers’ agents’ compensation from the seller and the sellers’ agents. (hint: we’ve divorced the commissions). Or, as the inimitable Kris Berg said in ‘07: [...]

By: Cash Back Realtor Buyer's Agent Rebate - Testimonials Atlanta, GA Georgia

Cash Back Realtor Buyer's Agent Rebate - Testimonials Atlanta, GA Georgia — Wed, 04 Jun 2008 17:40:47 +0000

Common sense would suggest that a home buyer is free to shop around without a buyer’s agent. Furthermore, the buyer may not understand about buyer agency until further research — which may be after visiting new home communities. Should the buyer be denied representation because he/she did not enlist a buyer’s agent from the beginning? Absolutely not.

The buyer bears some of the burden for real estate commissions through the price of the house; hence, the buyer should be able to select whomever he/she wishes prior to signing a purchase & sale agreement. While listing agents and/or home builders might contend differently, look at what the USDOJ has to say on the matter:

“Although the seller pays this commission, the buyer bears part of the burden of the commission through the sales price of the home.”

By: Until it happens...

Until it happens... — Wed, 02 Apr 2008 14:32:18 +0000

Unless and until dual agency becomes a thing of the past, the buyer broker commission will always be a cause for conflict of interest. Ask any true professional who is paid on fee like an attorney or an accountant.

By: Kris Berg

Kris Berg — Fri, 27 Jul 2007 14:55:20 +0000

Thomas – Just saved you from the depths of my spam catcher. Sorry.

You are absolutely correct in that the commission is the broker’s. Appreciate the clarification.

By: kc

kc — Tue, 24 Jul 2007 04:41:54 +0000

Better watch out Dale, most of the Realtors here will call you a “discount broker”, with no skills offering clients subpar service. Hope you serve your clients well but some agents will boycott working with “discount brokers”. How can you offer any service comparable to the “full service” agents? Where is my 6%!! Its mine! Good luck, but you should do a search here on Redfin. I have read posts from Realtors who call colleagues in the limited services field as “ilk” and so on. Hard to have a business relationship with people who do not respect you. I do hope that the client is better served in the end. That is what it is all about……….

By: Dale Rainey

Dale Rainey — Tue, 24 Jul 2007 01:40:38 +0000

I’m probably jumping into hot water here by entering the discussion, but I’ll throw in my 2 cents worth. I am one of the limited service companies http://www.ulistit.com. My opinion is that commissions will at some point cease to be based on a percentage model. It seems to make more sense (except if you are on the receiving end of a large commission) that real estate services are charged similar to other professions like accountants and attorneys which “generally” charge by the hour. An agent would then based on his professionalism and experience be able to garner more per hour than an entry level agent does.

What sense does it make now that an agent makes the same, be it 2%,3% or whatever irregardless of the level of service he provides as long as the deal closes. I see so many agents in our transactions that do not do their job, yet get paid the same as the goods ones.

In the end capitalism will win, those that provide the service will be able to garner the higher fees, regardless of whatever fee structure we end up with.

Cheers

By: Kris Berg

Kris Berg — Mon, 23 Jul 2007 00:49:00 +0000

And that, Mr. Shaw, is why I love you!

By: Russell Shaw

Russell Shaw — Sun, 22 Jul 2007 20:47:05 +0000

Kris,

I agree (pretty much with everything you ever say).

By: Phil Hoover

Phil Hoover — Tue, 17 Jul 2007 16:24:46 +0000

Jeff ~
I was just tryin to be a lil tactful

By: Thomas Heimann

Thomas Heimann — Tue, 17 Jul 2007 10:37:37 +0000

Actually, if you want to be factually and legally accurate, then the co-op commission does *not* belong to the agent, but to the broker. Which part, if any, belongs to the agent is determined by the compensation agreement between the agent and the broker.