As a home seller, ask the industry to answer this scenario:
“I’m going to sell my house and choose one of two Realtors® from the same office and both tell me they also have a buyer. One is on a 50 percent broker split and the other a 95 percent broker split. My commission costs are $20,000 and if choose the 50 percent agent, I’m paying commissions of $10,000 each to the Realtor® and the broker. However, if I use the other 95 percent Realtor® I pay them $19,000 and the same office broker now only receives $1,000. Based on this information I’d like use the first Realtor® and still pay them $10,000 and then pay the broker the $1,000, who would have gladly accepted this amount had I chosen the second Realtor®”
As the client, I’m paying for the Realtor® services, then why can’t I negotiate the commissions I pay? In the above case, the financial outcome will remain unchanged for one Realtor® and I’ve established the broker was prepared to accept either broker/Realtor® commission split outcome. This result reduces the total client commission costs by $9,000 for receiving identical Realtor® services. By providing a full Realtor®/broker commission split disclosure, this empowers the seller to negotiate their commission fee costs. The seller should also know what commission split the buyer’s broker will take. Both these amounts should be fully revealed to the sellers, who in many states are also paying for the buyers Realtor® and broker. When I’ve represented the sellers and buyers as their Realtor®, to help ensure the transaction closes, I’ve gladly taken a hit on my commission. I’d rather have $5,000 in the bank than see the total $10,000 walk away from me.
For the real estate industry, their branding claims a consistent level of professionalism provided by all their Realtors®. So no argument can be presented by the industry that by choosing the Realtor® on the lower commission split over the higher split Realtor®, that a client will receive a different level of professional service. As all Realtors® are self-employed and are all professionally equal, it begs the question once again as to why there is such disparity on Realtor /broker commission splits when all Realtors® do the same job.
Many bank owned listings only offer a 4 percent commission. It seems ironic to me that the industry that caused the real estate meltdown, now dictate the commission they pay but individuals are still held to ransom by the industry for a full 6 percent commission. Once again double standards prevail and all supported by the real estate industry.