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Rainmaker
887,783
Candice A. Donofrio
Next Wave RE Investments LLC Bullhead City AZ Commercial RE Broker - Fort Mohave, AZ
928-201-4BHC (4242) call/text

The seller pays commission to the listing agent who does represent them. The listing agent chooses to share that commission with a cooperating broker because it's good for the seller to invite cooperation and widen the pool of buyers to their clients property. See, we don't have a problem cooperating as listing brokers. I never have. And my sellers get it.

May 27, 2019 04:46 PM
Ambassador
4,201,209
Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
The right Charlotte REALTOR!

As a seller, you are enlisting a brokerage to procure a buyer for your home. Your brokerage then pays the other brokerage for procuring that buyer.

It makes total sense to me since that is how it has always been done since I've been licensed.

May 27, 2019 04:21 PM
Rainmaker
1,213,734
Thomas J. Nelson, REALTOR ® e-Pro CRS RCS-D Vets
Big Block Realty 858.232.8722 - La Jolla, CA
& Host of Postcards From Success Podcast

I'm not understanding your question.

The seller is not paying the buyer's agent, the listing broker is.

 

May 27, 2019 07:04 PM
Rainmaker
5,571,310
Barbara Todaro
RE/MAX Executive Realty - Retired - Franklin, MA
Previously Affiliated with The Todaro Team

the seller pays the listing office.....the seller's agreement is with their listing office not the agent.... all listings belong to the office not the agent...

the listing office cuts the check to the office of the buyer's agent.... the buyer agent's office will pay the buyer's agent....

May 27, 2019 03:05 PM
Rainmaker
3,321,246
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of the Manchester NH's area Leading Agents

If it were to be fair, then the buyer would pay their own agent, not the seller. The problem i see at least here, is that many buyers just barely have funds for down payment and closing costs, they have no money to pay an agent. Therefore when a buyer agency gets paid a fee from the listing agency, it works for those buyers. 

May 27, 2019 04:21 PM
Ambassador
3,037,137
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate

Agree or disagree. It's the model we've been left to work with. Good points have been made by Scott Godzyk and Debe Maxwell, CRS 

 

May 27, 2019 05:36 PM
Rainmaker
714,050
Brian L. Sirota, Esq.
Bristar Realty (Realtor/Attorney) - Orange, CA
For Solutions: (714) 501-7660

This is an interesting question; the present model is being tested in Moerhl v. NAR.   

The language of the model has changed over the years.  Sub-agency morphed into cooperative agency, while disclosure of agency relationships have strengthened, the bottom line hasn't really changed.  

The seller authorizes the listing broker to offer a cooperative fee to the buyer's broker, but if the class action lawsuit is successful--and the challenge is serious in my view--it would create a chaotic void, giving rise to a significant change in the industry.

As Debe Maxwell, CRS and Scott Godzyk mentioned, the present model works, as long as courts find it free of anti-trust issues.

May 27, 2019 05:27 PM
Ambassador
2,583,240
Wanda Kubat-Nerdin - Wanda Can!
Red Rock Real Estate - St. George, UT
So Utah Residential, Referral & Relocation REALTOR

A seller would want the home opened up to an entire local potential purchaser pool brought on by buyer agents, increasing the odds of getting the property sold in little time for as much as possible. It is a WIN-WIN for all! You see that, right?

May 27, 2019 05:10 PM
Rainmaker
679,629
Peter Testa
Nationwide Homes - Danbury, CT
PETER TESTA

STAHP

If Seller agrees to the Agent co-broking the listing (& why wouldn't they want that exposure) then they pay a commission to their Agent that will be split with whoever sells the house. 

May 28, 2019 04:52 AM
Rainmaker
696,192
Steve Higgins
RE/MAX Kelowna - Kelowna, BC

The average commissions here are between $12,000 - $15,000. The average buyer is not going to have an extra $6,000 - $7,500 laying around to pay a buyers agent commission. Why not cut the agents out totally then the seller and buyer don't pay anything. Hence FSBO's. 

May 27, 2019 05:30 PM
Rainmaker
520,551
Greg Cremia
Shore Realty of the Outer Banks - Nags Head, NC

We all pay a commission/fee to the car salesman, stock broker, homeiz, every store we buy from, insurance agent, banker, and everybody we do business with and none of them represent us. A fee for services provided is a normal capitalist way of conducting business.

May 28, 2019 03:45 AM
Rainmaker
4,059,870
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Interesting question and the answers provided offer information of the common practice along with some insight.  Nothing more to add.  

May 27, 2019 05:40 PM
Ambassador
5,358,471
Bob Crane
Woodland Management Service / Woodland Real Estate, EXP - Stevens Point, WI
Forestland Experts! 715-204-9671

The work is still done whether for a client or a customer, just a matter of how it is done and what is said.

May 27, 2019 03:05 PM
Rainmaker
1,870,410
Anthony Acosta - ALLATLANTACONDOS.COM
Harry Norman, REALTORS® - Atlanta, GA
Associate Broker

You have received answers from very experienced real estate agents.  

What is the purpose of your question?

May 28, 2019 06:00 AM
Rainmaker
1,716,204
Lyn Sims
RE/MAX Suburban - Schaumburg, IL
Schaumburg Real Estate

No, there are a few little problems with your scenario. Buyers never have enough money or the system might change.

May 28, 2019 04:49 AM
Rainmaker
1,514,305
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • GRI • HAFA • PSC Calabasas CA

Well, yes, it is complicated, the selling agent does not represent you as a seller. It is true, that agent even works sometimes against you trying to negotiate the best terms for his client, but this agent brought a willing and able buyer. 

 

May 27, 2019 11:57 PM
Rainmaker
468,799
Dan Pittsenbarger
Keller Williams Western Realty - Bellingham, WA
Improving Conditions

Give me a break - the buyer already pays everyone - the seller, all the sellers fees and both agents - all the money comes from the buyer.

May 27, 2019 09:09 PM
Rainmaker
1,874,100
Bob "RealMan" Timm
Ward County Notary Services - Minot, ND
Owner of Ward Co. Notary Services, retired Realtor

If there are two agents involved they both deserve a commission.

May 27, 2019 07:10 PM
Rainmaker
6,543,982
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

You may have a good argument but the traditional process prevails....for now.

 

May 27, 2019 05:26 PM
Rainmaker
985,222
Doug Dawes
KW Evolution - Topsfield, MA - Georgetown, MA
Your Personal Realtor®

The seller pays the listing brokerage then that brokerage pays the listing agent and selling agent

May 28, 2019 07:33 AM
Rainmaker
4,158,260
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Two lawyers in a room can provide 3 or more hypothetichal solutions. Many sound good but have no economic reality. Oh, the power of the dollar!

May 28, 2019 03:47 AM
Rainer
368,218
Clay R. Seay
Florida Homes Realty & Mortgage - Saint Augustine, FL

This is one of those gotcha questions that have faced Brokers and Agents for year. Yes, totally agree that most if not all the funds come from the Buyer, therefore it is logical that the Buyer is paying for everything, including the total commission. The decision on what happens to those funds lies with the Seller. Thus the Seller Listing Agreement with the Broker is part of what disburses those funds, including a Buyer Broker share of the commission.

It has been this way in the real estate industry for many decades and unless there is a systematic change in the way business is done, it will remain.

If you do not like it, either work to change the system, change the way you do local business or get out of the industry. NO one forces you to work in Real Estate. We are Independent Contractors in most all cases.

In my area of Florida, a Buyers Broker Agreement is not common and most Buyers baulk at signing an agreement that ties them to a specific Broker or Agent and requires them to pay a commission REGARDLESS of whether they use that Agent for the Transaction. Most Buyers will find another Broker or Agent that does not require such Agreement. Since it is not used by all Brokers in the area, a simple phone call and presto, a new Agent that does not force the issue, but works within the established norms. Sad but True.
May 28, 2019 06:57 AM
Rainmaker
735,339
Carla Freund
Keller Williams Preferred Realty - Raleigh, NC
Carolina Life RealEstate & Relocation 919-602-8489

I agree with Candice A. Donofrio Debe Maxwell, CRS and Barbara Todaro . To understand why it is done this way may require going back to pre-internet and a time when buyer's had no representation. Also keep in mind, many buyers can barely get into a house now. If things change, it will most likely change our market including home sales/values. 

May 28, 2019 04:50 AM
Rainmaker
1,149,109
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

In Asian countries seller agent gets like 2% and buyer agent charges 1% from their buyers. Nothing is on the interest. Seller can hire multiple listing agents.  

May 27, 2019 04:58 PM
Rainer
187,002
Raj Taj
RE/MAX - Lake Bluff, IL
Drive By Blessings!

"Totally makes sense to compensate the agent who succesfully brings in the buyer."

May 28, 2019 03:10 PM
Rainmaker
1,635,542
Sandy Padula and Norm Padula, JD, GRI
HomeSmart Realty West & Lend Smart Mortgage, Llc. - Carlsbad, CA
Presence, Persistence & Perseverance

As Barbara Todaro wrote. This is a system that has worked very well in the U.S. I know in other countries, it is dealt with as you wrote.

May 28, 2019 06:43 AM
Rainmaker
1,707,423
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

Whatever works.

May 28, 2019 06:20 AM
Rainmaker
3,997,352
Richard Weeks
Dallas, TX
REALTOR®, Broker

Like everything in life.  You don't get what you deserve, you get what you negotiate.

May 28, 2019 05:37 AM
Rainmaker
882,427
Annette Lawrence , Palm Harbor, FL 727-420-4041
ReMax Realtec Group - Palm Harbor, FL
Making FLORIDA Real Estate EZ

I believe the buyer and the seller should pay their agent directly.

Why? Because in today's environment the seller is defrauded of the dollars they agreed to pay. The seller believes they are paying the professional fees of the agents involved only to find out a nice piece went directly to the buyer.

SELLERS do not want to pay the BUYER!!!   Yet real estate professionals pretend to be blissfully ignorant.

May 28, 2019 05:17 AM
Rainmaker
2,020,150
Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

This question has been out there since the 1980’s when they started splitting the Commission on the HUD 1

May 28, 2019 05:14 AM
Rainmaker
3,969,656
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

The seller agent is paying the coop.

 

May 28, 2019 11:24 AM
Rainmaker
1,596,531
Valeria Mola
SIB Realty - Miami, Sunny Isles Beach - Sunny Isles Beach, FL
305-607-0709 SIB Realty Condos for Sale and Rent

Thank you, Candice. 

May 28, 2019 08:33 AM
Rainmaker
2,634,187
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

It has long been a bone of contention this point raised by you. I always remind the other agent about this when they get too picky & demanding

May 28, 2019 06:04 AM
Rainmaker
4,055,271
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

When a buyer's "agent' does not have an a buyer agency in place, they are technically a seller's sub-agent... and if the seller is willing to have their agent pay a commission to a sub-agent, who does all the work of an exclusive buyer agent at the end of the day, they should be paid a commission. In any event, the seller pays an agreed upon commission to their agent... that brokerage has the right to determine how to pay any licensed professional who brings a buyer.

May 28, 2019 04:52 AM
Rainmaker
2,062,464
Evelina Tsigelnitskaya
SIB Realty - Sunny Isles Beach, FL
www.SIBRealty.org 305-931-6931

No comments...

May 28, 2019 12:42 PM
Rainer
57,022
HOMEiZ.COM Real Estate Technology
HOMEiZ.COM - Agoura Hills, CA
The Real estate social network

Yes , the traditional way for now is, seller to pay buyer`s agent commission, or the listing broker to pay buyer's agent commission, call it as you wish.All is understood here. But, if I put myself in the seller`s shoes, why in the world I need to pay an agent who is basicilly going against me? Trying to reduce my asking price!  That dose not make sense to me at all. The fact that it workes this way for many years dose not make it right. Lets see what the court has to say.

May 27, 2019 08:31 PM
Rainmaker
4,884,514
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

It sounds like you are following the current DOJ issue.  

Jun 13, 2019 08:51 AM
Rainmaker
1,380,473
Ryan Huggins - Thousand Oaks, CA
https://HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

Out here in California, the seller pays the listing Broker who then offers to split it with the buyer's Broker.  The seller doesn't directly pay the buyer's Broker.  Out here the rule is to be in the MLS you must offer at least $1.  There is no set percentage that the seller pays the listing Broker and no set percentage that the listing Broker offers to share to the buyer's Broker.

Jun 10, 2019 10:57 PM
Rainmaker
1,669,749
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

If you want to limit the number of buyers exposed to your house, then fine. Pay only your own agent and instruct the agent that he or she must bring the buyer. Of course, that might present another problem, since many buyers are smart enough to want their own representation.  You could just lower the price enough for the buyers to pay their own agent, but that might present a different problem, with getting the loan approved.

Jun 03, 2019 03:56 PM
Rainmaker
895,177
John Juarez
The Medford Real Estate Team - Fremont, CA
ePRO, SRES, GRI, PMN

 Your point may be resolved by current class action litigation. 

May 29, 2019 05:42 PM
Rainmaker
5,526,298
Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

You have many good answers.  A

May 29, 2019 04:44 PM