The old 50/50, going "halvesies" is NOT in any way a required thing, and in many cases, frankly, in some cases it is short-sighted.

Those that come from the 50/50 background are surprised at times to get to a closing and find they are only getting 50% of what the other broker is (that's not the "50%" deal they were thinking!).  However, not only is 50/50 atypical, and not the norm, in much of the country, and in many segments of the business it is almost unheard of.  At the very least, there is no legal obligation, no moral obligation, and no rule in the MLS or otherwise that requires it.

Starting with the residential side of the industry, many regions do not have 50/50 as the typical split.  Generally in these regions the buyers' brokers get more than 50% of the total commission.  In Chicago, where we live and do a lot of work, 50/50 is the norm in residential (but not commercial, keep reading).  In the expanded metro D.C. area, though, Lenn Harley always offers more to the buyer's broker (a 7% commission will generally end up 4% to the buyer's broker there).  Bryant Tutas also has said he generally offers more than a 50% cut to the buy side of a deal.  In some cases this is the market norm, in others it is specific to certain (I would say wise and insightful) sellers' brokers.  The logic is simple - offer more to buyers' brokers, get more traffic, more showings = more and faster sales - it's simple.  However, if I have really high commission agreement with a seller (maybe it's a relative or friend) I don't have to even offer 50% - if the market co-op tends to be 2.5% and I have a 6% listing agreement, I can still offer 2.5% and keep 3.5% for myself without hurting my buyer (espeically if it's a "pocket" listing and there is no open marketing and it goes straight to a buyer client that I know is looking for something just like that listing).

In the commercial and corporate real estate world, where I spend my time, there are very few 50/50 splits.  In Chicago, unlike the residential practices here, the tenants' brokers get double what the listing (building rep) brokers do.  This is not atypical across the country, where I have worked in 6% markets in which I got 4% as the tenant broker, etc.  Most of the country (for corporate leasing) is this way.  The interesting thing in some markets is that if the building representative leases the space to a company who does not have broker (a rarity in any substantial size deal) they get a "full" commission - double what they get if there is an outside/tenant's broker.  If there is an outside broker they get a half commission and the tenant broker gets a full commission, so the landlord pays 1 ½ commissions total.  I still like to negotiate for a higher commission than even what is offered that way, almost always (hey, I'm worth it).  In the commercial world, all commissions are negotiable.

Greatly in contrast is the investment brokerage market.  In the small property arena of $1 million to $20 million properties, there is often a co-broker split offered, which may or may not be 50% of the total commission (and again, is not set in stone, so I will invariably negotiate for a higher split/percentage, unless they are overly generous to start).  However, for larger properties, there is almost never a co-op split offered.  That's right, we almost always get paid by our buyers for large deals.  Granted, if the property isn't already on the market and therefore there is only one broker involved, the seller may also pay something (I like those deals!), but again, that's the needle, not the haystack. 

Getting paid by a buyer (especially to the tune of several hundred thousand dollars or more) is something many agents can't fathom approaching a buyer on, but we have to do it for every deal.  Once in a while a buyer agrees to the fee but then wants the seller to factor it into the deal and pay it.  I don't understand why they want this, but it generally doesn't matter, because most sellers won't agree to it (though from the seller side, I also don't see why it matters, it only hurts the buyer to show a higher gross sale price to the extent that hurts the tax assessments later on).

For those not used to anything but a 50/50 deal, my message is this: don't count other peoples' money.   If you agree to a certain co-op arrangement, don't throw a fit at the closing table if you find out the listing guy kept more than half - you agreed to what you got, right (it's not like anyone put a gun to your head)?  Likewise, listing agents that agree to pay the buyer's/tenant's agent more shouldn't be bitter about that either - again, they did what they did of their own accord to get a deal done, and isn't that why anyone offers a co-op commission to begin with?

Does anyone remember the disco song "Ten Percent" by Double Exposure..."ten percent of something...it beats one hundred percent of nothing at all."

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