Commission Split 50/50?

Real Estate Agent with Cactus Mountain Properties, LLC
I am thinking out loud!  How is it that the SELLER in a real estate transaction carries the burden of the cost of both sides of the real estate commission?  Why isn't it split equally between buyer and seller's agents and distributed at the close of escrow?  Wouldn't that help level the financial disparity for both parties allowing for a more active market?  Both the buyer and seller enlist a real estate practitioner to negotiate in their behalf and exercise their expertise in securing all legal details of a transaction, then why does the SELLER pay all the commission?
Posted by

Barb Merrill Works 4 U!

Comments (7)

Sherri Elliott
INTEGRITY TEAM - eXp Realty, LLC - Flower Mound, TX
Good Question..This is how it has always been. However I do know Buyers agents who get paid even if they do not sell the client a home. Agents will do the buyer rep. and ift their client buy's a FSBO, BUILDER or any other home they still pay the agent their agreed amount for commission. Some even get paid this on top of the commission for selling a MLS listing! No I do not agree with that, but know it happens!
Oct 21, 2007 01:38 PM
Vicky Poe
Good Ole Rocky Top - Crossville, TN
Realtor/ Auctioneer
I have thought that the buyer should shoulder some expense.  At most auctions the buyer pays  a buyers premium.
Oct 21, 2007 01:38 PM
Brandon Causey
Coastal Palmetto Realty LLC - Loris, SC
Realtor, Coastal Palmetto Realty LLC
If I'm doing a land acquisition (I love these) I charge a up front retainer fee plus I get a commission from the buyer...Sometimes I am able to negociate a commission from the seller as well.  Remember this is not an easy process.  I almost always have to deal with zoning and the local governments in order for my buyer to use the property for it's intended purpose. 
Oct 21, 2007 01:38 PM
Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Really, such a logical question, and by a matter of habit we do not even think about it. I am curious if there is a reason for that. You asked a terrific question.

Thanks for the idea

Oct 21, 2007 01:39 PM
Gary White~Grand Rapids Home Selling Pro Call: 616-821-9375
Flexit Realty "Flexible Home Selling Solutions" - Grand Rapids, MI
Real Estate Services You can Trust!

Well Barbara....the old standard..."it's always been done that way"!  The primary reason is the seller is the party that engages the selling representation.  The buyer's agent is paid a portion of the selling brokers fee to bring buyers.  It was and is an incentive to do so. 

Why would a buyer share in the marketing and sales costs of a property they do not own?  It might be more equitable but has no incentive for the buyer to participate.  Nice thought probably not going to happen.  Currently sellers even contribute to closing costs and other expenses incurred by the buyer as additional incentives.  Great post Barbara...very thought provoking.

Oct 22, 2007 01:40 PM
Patricia Kennedy
RLAH Real Estate - Washington, DC
Home in the Capital
Barbara, the buyer does pay the commission as it is included in the price the buyer pays.  By doing it this way, it can be bundled in with the mortgage.
Nov 29, 2007 02:03 PM
Cathleen OnullHannigan
Keller Williams Realty - Cary, NC
Cary NC Homes Pro

The seller shouldn't have to pay all of it, but the buyer has lender fees and if you add commission, it's just to much for most buyers, especially now with such tight lending requirements. Also, if buyers have to pay 3%, I think they will just use the internet and contact sellers directly, totally bypassing the agent.

Aug 24, 2008 12:49 AM

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