Real Estate Agent Commissions are Paid by the Seller

When a seller decides to sell her house, she signs a listing agreement with a real estate broker (commonly known as a real estate agent or realtor).  That agreement gives the sellers agent (known as the listing agent) the right to list the house for sale on the local Multiple Listing Service. The agreement shows the total commission to be paid by the seller, including how much of that commission will be shared with an agent who represents the eventual buyer (known as the selling agent).

Commonly, but certainly not always, the total commission is 6% to be split equally between the listing agent and the selling agent. Accordingly, when the sale closes, the seller pays 6% of the sale price to the sellers agent, who in turn pays 3% of the price to the buyers agent.

Given this system, a buyer has no say or control over how much is paid to the buyers agent.  Accordingly, there is a good argument to be made that the whole real estate commission system actually works against buyers . But regardless, the buyer has virtually no direct input into the commission paid the buyers agent.

RELATED POST: Compare our Buyer’s Agent Commission Rebate to traditional real estate agent commissions and fees:

We offer Significant Savings for Buyers.

A Real Estate Commission is Negotiable, Whether Directly (Seller) or Indirectly (Buyer)

Its an old adage in real estate that everything is negotiable. This holds true for a real estate brokers commission, although its a lot more complicated on the buyers side.

Sellers Can Pay the Listing Broker Less

There are many, many real estate brokers out there who will list a property for sale on the MLS for much less than the common 3% commission to the listing agent. One such type of broker is the flat fee or discount listing broker. Just google flat fee listing broker or some variant and youll find lots of them. These brokers typically are for the DIYer who is willing to do virtually all of the work and who simply wants access to the MLS.

But there are other alternatives as well. There are a few brokers who charge a fee for service and will provide a variety of services (such as staging, photographs, assistance in negotiating, etc.) for certain fees. And of course there is WaLaw Realty. where you pay a flat fee (currently $4995) and get all the services you need from both a real estate broker and an attorney. So on the seller side, its pretty easy to reduce the costs associated with a commission paid to the listing agent.

Buyers can Hire a Broker who Rebates the Commission

Given the commission system, it gets a little trickier to save money if you are a buyer, but its not impossible. The easiest and perhaps only way for a buyer to save money is to hire an agent who will agree to rebate a portion of the commission paid to the buyers agent. Indeed, the United States Department of Justice has long recognized that commission rebates are an excellent way to reduce the costs of buying a home .

Commission rebates are growing increasingly popular. A large, essentially national brokerage has, since its inception, rebated a portion of the buyers agents commission back to the buyer. We dont want to promote a competitor here, so well only say that the name of this large brokerage begins with an R and ends with an edfin.

But even that large, national brokerage is not the biggest rebater. That honor? Why, WaLaw Realty. of course! We work on a flat fee . The commission we earn as your buyers agent is rebated to you in full at closing after payment of any fees due us. Since we charge a flat fee, but rebate a percentage-based commission, the savings increase as the purchase price goes higher. The more you buy, the more you save.

Finally, how do we know were the biggest rebater? Well, do you know any other brokerage thats rebated more than $65,000 to a single client ? Or that has saved its clients more than $1.3 million to date  with average buyer client savings of more than $14,000 each? We didnt think so! Its why were the smart choice for the savvy buyer (and seller too!).

Posted by Marc

This entry was posted on Thursday, July 19th, 2012 at 10:00 am and is filed under Buyers Agent Commission Rebates. Sellers Agent Commission Savings. Spotlight. You can follow any responses to this entry through the RSS 2.0 feed.