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NFT: Realtor commission questions Ė condo sale.

davek3698 : 1/6/2019 9:55 am
Trying to sell my elderly momís condo in Bergen county for her. Its not an assisted living place, but is 65+ in a secure building.

The realtor that I met with is very active in the building and probably sells the most units in the complex. She wants 5%, which I am happy with. She mentioned that her split is 3% to her and 2% to the buyers agent, instead of the traditional 50%-50% split. When I questioned her why, she mentioned that since the building requires pass card entrance, it entails her being present for each viewing instead of the traditional lockbox/key scenario, thus taking more of her time. Is that the norm? I have only sold single family houses before and never condos, and it has always been an even split.

Also, when I asked if there would be a reduction in commission if she identified the buyer herself she said that is not the case. Previously when I sold houses the listing agent put in verbiage in the contract showing a commission percentage reduction if they did both sides of the deal. Something like a half a percentage point, if I remember correctly. The realtor did mention that she already might have a client in mind looking to move within the building, so it very well may be a one realtor, quicker scenario. Thanks.
Ask the condo assoc  
jestersdead : 1/6/2019 10:01 am : link
About the card access she mentioned to you. If sheís lying, call her out on it. Iíve done listings where I have to accompany the showing agent and always do a 50/50 split.

Also good to get a second person in for a listing presentation
unless you are trying to get it down to 4%  
UConn4523 : 1/6/2019 10:18 am : link
Iím not sure why you care (not being a dick). The seller is out the entire commission and once itís gone the split is between the brokers. Unless you think someone wonít make an offer because the buyers agent isnít getting 50/50, than Iím not sure what the big deal is.

If her reasoning is BS you can call her out on it but if sheís bringing you offers, then that split is already agreed upon.
I'm sure that's the set up she had  
Miami_JintsFan : 1/6/2019 10:35 am : link
with other listings that she's sold in the building. Take the 5% and let her do her thing.
Uconn  
davek3698 : 1/6/2019 10:38 am : link
Fear of buyers agents stearing their clients towards properties with more favorable terms for them, thus higher commission. Commonplace occurance.
5% is extremely reasonable.  
section125 : 1/6/2019 10:40 am : link
And I agree, why should you be concerned over the split. That is between her and the other agent. I'm sure this is something that is well known between the agencies.
Subject of realtor fees is like fingernails on a blackboard  
baadbill : 1/6/2019 10:44 am : link
... it is the world's biggest ripoff... as though the fees for selling a million dollar property should be ten times the fees of a $100,000 property... there should be consumer protection laws that outlaw fees for service to be based on a percentage basis (lawyers who handle bodily injury claims based on a percentage in clear liability situations are equally reprehensible).
RE: Uconn  
section125 : 1/6/2019 10:48 am : link
In comment 14249545 davek3698 said:
Quote:
Fear of buyers agents stearing their clients towards properties with more favorable terms for them, thus higher commission. Commonplace occurance.


Ok, reasonable. Except the buyers agent basically hands the buyers to the selling agent who does all the work at the closing. So the buyers agent is getting a referral fee. Who would turn their nose up at a few grand to show a condo/home.
Your  
mdthedream : 1/6/2019 10:55 am : link
doing this for someone else and your worried about the 5% or 1% in the end extra? Get the person who sells it the quickest and move on.
If  
mdthedream : 1/6/2019 10:56 am : link
she doesn't get full price and comes back with a offer than say I can do that for 4%. You can work with them if your losing more on your end. They want to make a sale.
Commission  
Mike in NY : 1/6/2019 10:57 am : link
I donít think any Selling Agent would not show a property because they are getting 2% versus 2.5%. Now a reduced Commission if Agent works both sides I have seen before. I have a client who is selling a house in Queens and the broker agreed to take off 1% if he was also Selling Agent
RE: Uconn  
UConn4523 : 1/6/2019 11:04 am : link
In comment 14249545 davek3698 said:
Quote:
Fear of buyers agents stearing their clients towards properties with more favorable terms for them, thus higher commission. Commonplace occurance.


Ehh, Iíd say thatís a very small chance of happening. Agents want to sell properties. If the client likes something, itís in their court to make an offer.
Your right to question it  
KWALL2 : 1/6/2019 11:24 am : link
If there are similar condos for sale, some buyers agent will direct their clients there if the commission is higher. And this could impact your time on the market and your final sale price.

Is it standard practice to have this split? Iíd want to know.

Contact a few other agents in the area.

With direct access to all listings  
UConn4523 : 1/6/2019 11:27 am : link
buyers direct themselves to what they like. The agent is their for the paperwork, run comps, and if you have a good one like I do, help assess updates/repairs/etc.
And buyers are often influenced by their agent  
KWALL2 : 1/6/2019 11:33 am : link
Condo Isnít the same as a house with different location and features. If there are similar condos for sale, the lower buyer commission could impact his sale.

If it is not standard for the area, heís a fool to accept it.

The listing agent claims itís ďextra workĒ to have to go to every showing? LOL. Thatís his job or get an assistant to go there to open a door. Or find another agent who will. Plenty of them can handle an easy condo sale.
What is the price on the condo?  
KWALL2 : 1/6/2019 11:38 am : link
Is Redfin in your area. You can save 1 -1.5% on the listing side with them and still offer the 2.5% to the buyer agent.

At least contact Redfin before signing with this agent.

Also, they do have another discount if they bring the buyer too.
RE: And buyers are often influenced by their agent  
allstarjim : 1/6/2019 12:11 pm : link
In comment 14249596 KWALL2 said:
Quote:
Condo Isnít the same as a house with different location and features. If there are similar condos for sale, the lower buyer commission could impact his sale.

If it is not standard for the area, heís a fool to accept it.

The listing agent claims itís ďextra workĒ to have to go to every showing? LOL. Thatís his job or get an assistant to go there to open a door. Or find another agent who will. Plenty of them can handle an easy condo sale.


I'm an agent, agree with KWALL. I think the greater concern is the cut-rate co-broke. The idea is to attract more buyers. An agents can and do steer clients toward or away from a deal on a particular property. If an agent won't reduce their commission for working both sides, their prerogative, it is extra work and I think that's less of a concern. However I would, if I'm the seller, demand close to what is the "normal" commission split for agents on the co-broke.

On another note, a lot of people here have no idea what an agent does, it seems.
Lots of comments here-  
HomerJones45 : 1/6/2019 12:11 pm : link
not all good or sensible, but lots of comments. I apologize in advance for the length of this post.

In the first place, it is an old chestnut that agents "steer" potential purchasers to the properties with higher splits. Would that agents had that kind of influence anymore with the vast majority of buyers starting their shopping online and seeing what is available on the market. a) buyers usually know what is available and what they are interested in when they sit down and b) the real estate market isn't so wonderful that any agent can afford to turn their nose up at a potential commission of any percentage.

In the second place, unequal splits are not illegal, unethical or uncommon. It depends on the practice in the area, the brokerage firm's policy, the amount of work involved, the amount of advertising etc.

The listing brokerage needs to assemble a lot of information to place the property on the MLS and to websites to which listing information is syndicated. Guess who becomes responsible for that information? Guess who needs to order documents from the HOA,especially if this condo is located in a state that follows the Uniform Common Interest Ownership Act which provides the buyer with the right to rescind the deal? Some brokerages want a higher split to compensate for the increased responsibility and workload of having the listing.

By all means get another listing presentation from another brokerage; it is expected and it will help educate you.

Ask both agents some other questions: what tools do they have to market to buyers other than MLS. What sites are listing info syndicated to? What contact tools do they use (not "available". Many brokerages make tools available but the agents don't use them because the brokerage charges the agent) with buyers? (there are CRM programs, email programs where buyers sign up and receive info directly from the brokerage), what is the brokerage firm's own website like? With the agent who does a lot of business in the condo, ask what percentage are her own buyers? (agents that do a lot of business in a particular condo, coop or subdivision have an edge since potential purchasers often contact them to let them know when a unit or lot comes up for sale- that may be one reason this particular agent wants the higher split), who will be arranging for resale documents? Will the agents be going direct to contract or do you need to hire an attorney to draft a contract? What advice are they offering on staging and pricing?

A word on Redfin. It can be a good deal or a bad deal. Redfin tends to attract a lot of new agents because of the promise of a paycheck. Experienced, successful agents with a book of business are making a lot more money and don't need Redfin. Talk to a Redfin agent if the dollar back sounds attractive. Just quiz the agent on their experience and the not-in-MLS marketing tools available to them and that the agent actually uses.

Again, sorry for going on. Good luck.
RE: What is the price on the condo?  
allstarjim : 1/6/2019 12:14 pm : link
In comment 14249615 KWALL2 said:
Quote:
Is Redfin in your area. You can save 1 -1.5% on the listing side with them and still offer the 2.5% to the buyer agent.

At least contact Redfin before signing with this agent.

Also, they do have another discount if they bring the buyer too.


I got to split with you on this one. You get what you pay for. If you have an agent that performs, they are much more likely to get you better terms, a smoother transaction, and a higher price rather than a discount agent who in reality is probably someone who just got their license and really is just going to put it on MLS and doesn't know anything. No top agent or very qualified agent is going to discount their services to 1 or 1.5% because they are worth more than that. Why would they?
RE: Lots of comments here-  
allstarjim : 1/6/2019 12:21 pm : link
In comment 14249675 HomerJones45 said:
Quote:

In the first place, it is an old chestnut that agents "steer" potential purchasers to the properties with higher splits. Would that agents had that kind of influence anymore with the vast majority of buyers starting their shopping online and seeing what is available on the market. a) buyers usually know what is available and what they are interested in when they sit down and b) the real estate market isn't so wonderful that any agent can afford to turn their nose up at a potential commission of any percentage.




Buyers are online but that doesn't mean they are more educated. In fact, Zillow puts out so much bad information they do more misinforming than anything, with the exception of the public seeing what is out there in inventory.

And yes, an agent does still have plenty of influence over a purchase decision. This fact shouldn't even be in debate. An agent can play up negatives of a home or play them down. Buyers do trust their agents if they are working with them. Personally, I never allow the commission split to affect how I represent my clients. I always put client-needs and wants first. But I'm also not naive enough to think there aren't agents out there who reject properties because the listing agent or the seller are discounting the co-broke. Their are agents out there right now that have a strategy of giving 5% to co-broke, and taking 3% themselves, to attract more agents and their buyers. And that's also why Agent bonus offers are a thing.
Homer  
KWALL2 : 1/6/2019 12:23 pm : link
Why should the owner have to deal with any potential impact of a lower buyer commission. Is it commonplace? Probably not. But it only takes a few words here and there from the buyer agent to have an impact on a buyer.

And nobody stated unequal splits are illegal but they sure as hell are not common. The justification for thishigher listing fee is not about gathering info or posting it on ďsyndicated sitesĒ (which takes no time and is part of the job of every listing). The reason for it the agent would have to be there for every showing. Thatís a joke.

Many people do not allow lock boxes on their property. When this is the case, it is not the normal business practice of the listing agent to demand a larger commission.

The listing agent wants a bigger cut? They better make a much better case than I have to be there for showings.
Kwall  
UConn4523 : 1/6/2019 12:27 pm : link
what words can a broker say the greatly impact said sale? ďDonít buy this, the roof is falling inĒ? What logical comment can they make to ruin a sale just because commission is a little lower.

Thatís paranoia, IMO. Everyone wants the sale to go through, quick and easy is best for everyone. The buyers broker getting a deal domes means he/she can focus on the next client and increase their sales. Shopping around for no other reason than an extra 0.50% will wind up costing them money instead of making a deal that works for everyone.

I sold my house at 5.25% (or thereabouts after some referall discounting) and the split wasnít even. It had no effect on the sale, got many offers the first week and sold it quickly.
The only issue I could even  
pjcas18 : 1/6/2019 12:34 pm : link
see with this is that my realtor when I was looking to buy a house did research and found houses that met our criteria for us to look at that we didn't see.

We found a lot of what we wanted to look at from realtor.com, trulia, and other sites popular at the time, but she found many others that we hadn't initially included based on her knowledge of the area, access to listings before they were on those sites, and connections.

In fact, it's how we actually found our first house.

So, I guess you might be able to make a case a buyer's agent would in theory avoid those houses where there was not a 50/50 split, but I doubt it.

It can't hurt to check and see if it's typical and if perhaps other agents could do the same for you and have experience in the building and offer a 50/50 split, but I wouldn't spend too much time on this.

it's the same 5% from you and I think the chances a realtor avoids the list because of the split (is that even disclosed in the listing?) is remote.

just my 2c.
Plenty of things  
KWALL2 : 1/6/2019 12:38 pm : link
Can be said and done. It is not about ďruiningĒ the sale. Failing to show it, Showing it last. Pointing out more issues in this unit. A few words can impact a lot and it could easily carry offer to the offer the agent recommends on that unit.

If itís not common for the area there is no reason to do it especially with that joke of a reason the agent gave the owner.
Pjac  
KWALL2 : 1/6/2019 12:51 pm : link
The commission is absolutely disclosed and every agent knows about it. If itís not common, many buyer agents will have a problem with it and with the listing agent trying to reach into their pockets.

Will it have a ďgreat impactĒ? It could be a case of losing only one buyer to have a great impact on a sale especially now with the big drop in # of buyers vs listings.
I guess I just donít see it  
UConn4523 : 1/6/2019 12:51 pm : link
I tell my broker what I want to see, not the other way around. He has zero impact on what I see and when I see it.
Many people do not tell  
KWALL2 : 1/6/2019 1:03 pm : link
The agent what they want to see or have any idea on how to make an offer. They expect hell and input for their agent.

You may have a great agent and wouldnít have to worry about it. There are a lot of agents out there and all types. And for many buyers the agent can easily impact how they view a property and certainly what kind of offer to make.

Just unnecessary if it is not common in the area to have this split.
RE: I guess I just donít see it  
pjcas18 : 1/6/2019 1:13 pm : link
In comment 14249726 UConn4523 said:
Quote:
I tell my broker what I want to see, not the other way around. He has zero impact on what I see and when I see it.


I agree the impact is likely minimal, like I said, but it kind of depends. we were looking for our first house, didn't know much at all about the home buying process, or the areas we were looking.

We did find homes to look at on our own that met our criteria, but like I said we did get some referrals from our realtor and one of her referrals was actually a house we bought.

I suspect many home buyers are in the boat as us, especially first time home buyers.

I think it's remote that a buyer's agent would avoid listings with less of a commission, but it's certainly possible.

Sorry to miller  
mattyblue : 1/6/2019 9:38 pm : link
But do real estate agents make enough money to get by nowadays? Iím not talking about people who have done it a long time or sell mansions. My wifeís cousin turned her life around from all kinds of problems including drugs. She had some serious physical problems and got hooked on opiates. She was really sick and things didnít look good but she has gotten through all the physical and mental stuff including getting off the pills and really is doing well now. Somebody convinced her that real estate would be a great field for her to get into and she is running with it. She passed up taking college courses and a few other options that seemed better. My wifeís family are concerned that if she gets into real estate and fails she wonít be able to deal with everything. I know nothing about real estate but have to imagine itís a tough field and you gotta be able to really hustle. I guess my question will she be able to survive on real estate alone nowadays? She would be working in upper Fairfield county and north. Around the Danbury/New Milford CT area for those familiar.

I apologize for rambling.
RE: Sorry to miller  
allstarjim : 1/6/2019 11:32 pm : link
In comment 14251496 mattyblue said:
Quote:
But do real estate agents make enough money to get by nowadays? Iím not talking about people who have done it a long time or sell mansions. My wifeís cousin turned her life around from all kinds of problems including drugs. She had some serious physical problems and got hooked on opiates. She was really sick and things didnít look good but she has gotten through all the physical and mental stuff including getting off the pills and really is doing well now. Somebody convinced her that real estate would be a great field for her to get into and she is running with it. She passed up taking college courses and a few other options that seemed better. My wifeís family are concerned that if she gets into real estate and fails she wonít be able to deal with everything. I know nothing about real estate but have to imagine itís a tough field and you gotta be able to really hustle. I guess my question will she be able to survive on real estate alone nowadays? She would be working in upper Fairfield county and north. Around the Danbury/New Milford CT area for those familiar.

I apologize for rambling.


Matty, a very small percentage of agents make the majority of the money in real estate. To make money, you really have to be a business person, you have to study and learn, become a contract expert, and also be able to market your client's property, but even more importantly, yourself. It is hard. Very hard. It is also rewarding for those who really make the commitment. It is a full-time job and it has big emotional swings, in a business where you can't allow emotions to get in the way. I know what it's like to have a ton of hours and expense in a deal, and right before closing, it falls apart because one side or the other just decides they aren't going to close. Here's what you get for all the time, money, and work you put in...bupkis.

Further, you spend a lot. If she doesn't have the ability to pump money into her business on a consistent basis, and then the commitment to follow through and grind, while also recognizing that even when she gets her license she has a huge learning curve ahead of her... it's not going to work out for her and it could be detrimental. It's not for the faint of heart and many people think it sounds like a great business to be in not understanding what it takes...and get crushed.

I am still in it and have perservered through some tough stuff but I even can't say knowing what I know now, if I had to start from the beginning, that I would make the same choice.
RE: RE: Sorry to miller  
mattyblue : 1/7/2019 5:56 am : link
In comment 14251619 allstarjim said:
Quote:
In comment 14251496 mattyblue said:


Quote:


But do real estate agents make enough money to get by nowadays? Iím not talking about people who have done it a long time or sell mansions. My wifeís cousin turned her life around from all kinds of problems including drugs. She had some serious physical problems and got hooked on opiates. She was really sick and things didnít look good but she has gotten through all the physical and mental stuff including getting off the pills and really is doing well now. Somebody convinced her that real estate would be a great field for her to get into and she is running with it. She passed up taking college courses and a few other options that seemed better. My wifeís family are concerned that if she gets into real estate and fails she wonít be able to deal with everything. I know nothing about real estate but have to imagine itís a tough field and you gotta be able to really hustle. I guess my question will she be able to survive on real estate alone nowadays? She would be working in upper Fairfield county and north. Around the Danbury/New Milford CT area for those familiar.

I apologize for rambling.



Matty, a very small percentage of agents make the majority of the money in real estate. To make money, you really have to be a business person, you have to study and learn, become a contract expert, and also be able to market your client's property, but even more importantly, yourself. It is hard. Very hard. It is also rewarding for those who really make the commitment. It is a full-time job and it has big emotional swings, in a business where you can't allow emotions to get in the way. I know what it's like to have a ton of hours and expense in a deal, and right before closing, it falls apart because one side or the other just decides they aren't going to close. Here's what you get for all the time, money, and work you put in...bupkis.

Further, you spend a lot. If she doesn't have the ability to pump money into her business on a consistent basis, and then the commitment to follow through and grind, while also recognizing that even when she gets her license she has a huge learning curve ahead of her... it's not going to work out for her and it could be detrimental. It's not for the faint of heart and many people think it sounds like a great business to be in not understanding what it takes...and get crushed.

I am still in it and have perservered through some tough stuff but I even can't say knowing what I know now, if I had to start from the beginning, that I would make the same choice.


Jim thank you so much! That was an excellent description and exactly what I was looking for. I do believe that she has been convinced that it will be easy money, or that she wonít have a problem breaking into it. I immediately thought that it would absolutely be the opposite of an easy job lol. She has had a rough go of it, and while getting hooked on the pills was her own demon everything else that has happened to her was not something she could have controlled. She is a really sweet person and someone anyone would root for. I just donít think she will fit well into real estate. Exactly as you said losing out on something at the last second is exactly the type of thing that she wonít be able to handle currently. I am going to use your exact post and send it to her verbatim, I think it will be an eye opener hopefully. She is just someone that needs a win. Thank you again, very much appreciated.
Matty you are welcome  
allstarjim : 1/7/2019 11:08 am : link
If she wants to talk to someone about the business, I would be happy to chat. I could give you my number offline. If she is on the fence or if she decides to go forward, I can certainly talk to her about best practices and give some practical advice to give her a better chance at this if she decides to go forward. She should be prepared to make little or even no money for awhile. I have a heart for people that have to pull themselves up from the bottom...I've been there too. Tell her I'm rooting for her as well.
Thanks Jim!  
mattyblue : 1/7/2019 3:42 pm : link
I will put that offer out there to her and see if she would be interested. Either way itís really appreciated. I also have been down pretty low before and had to change my life, itís one of the reasons I want to help her. Itís tough for me because I really have no clue about real estate and I am trying to avoid coming across as telling her what to do. You seem like a good dude Jim! Really appreciate it!
RE: Thanks Jim!  
allstarjim : 1/7/2019 5:33 pm : link
In comment 14252543 mattyblue said:
Quote:
I will put that offer out there to her and see if she would be interested. Either way itís really appreciated. I also have been down pretty low before and had to change my life, itís one of the reasons I want to help her. Itís tough for me because I really have no clue about real estate and I am trying to avoid coming across as telling her what to do. You seem like a good dude Jim! Really appreciate it!


No problem. You can email me at allstarjim30@gmail.com any time and I will respond if she would like my number to talk or text.
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