Offering Less To The Buyer's Agent? - Counterpoint

Lots of interesting view points on this subject and I understand why.

It's not an even split for most transactions here. When I'm the listing agent though, I prefer to split evenly, or at least give a healthy commission to the buyer agent (depends on the total amount and specific transaction).

On another note, I recently had a seller tell me he didn't want to pay the buyer agent because that agent wasn't "doing their job" - he definitely knew his money was going to both the buyer agent and me because we discussed it.

Since my comment just followed Marte Cliff , I hope I used "and me" correctly in that last sentence!

Exactly!!!

I take more because it's my listing. I buy the marketing, I pay for the professional photographer, I manage the listing and I do this until it sells. I earn my pay and the sellers know what that pay is....they don't have to use me or accept my terms.

As a buyers agent I appreciate an even split.  Where would listing agents be without buyers agents?   Now I also list.

 And yes they know up front what the split is , and sellers are a lot more savy now so they expect a commission drop if there is not an even split.

It is also more popular here as well, listing agents taking more.  I don't agree because I feel I work hard to get that listing sold.  They are not sitting on the market for long periods so cost of advertising, pictures  etc are no more expensive than showing buyers, writing contracts, negotiating deals, dealing with inspections, appraisals  and repairs.

It would be nice if it were required to split.  My opinion. 

In my buyer agent agreement I state the percentage of my commission. I explain to the buyer that if the listing agent offers less than my commission then they will make up the difference, and it states in the agreement. If the listing agent is offering less, I will generally make a note of it and leave it to the last of my showings hoping that my buyer will fall in love with something else. I also work hard for my money. 

In the end, it does not matter one whit what the "split" is between the listing broker and the buyer's broker. If a buyer's broker hasn't already covered their own expected fee with their client and made arrangments to get paid whatever it is they think they're worth -- regardless of the amount being offered by the seller -- then that's their own fault. 

Every market has what they consider to be "usual and customary" and in our market it IS just that for the listing side to get more...to berate that is....more than unprofessional.

I answer my phone, make appointments and stay in touch with lenders, escrow etc....I know what I will do and why. The extra benefit (1/2 point-to a point) goes to me. In any event, it is still a win-win. Good posting

I avoid agents and percentage splits like this as if they were the plague when I am working the buyers side of the deal. Are you saying that you work harder than a buyers agent when it comes down to a new property/construction? I understand that each scenario is different but we are all here trying to make the most money possible while helping clients to meet their goals and deadlines. I would rather work with a FSBO, who has the worst hatred towards real estate agents but is still willing to pay the buyers agent a better commission.

I have read both sides of this blog, thank you both for your viewpoint. Aren't we all inclined to show the listings that split the commission? Unless it's an awesome property, I'll blow by the homes that offer less to buyers agent and choose the ones that offer a 50/50 split. Especially in a Sellers market. There are so many to choose from.

I can understand your reasoning and you have to do what you think is right for your model.  I usually do an even split, except for when I am working a short sale where I do a lot more of work after the contract is received.

Professionals are fearless competitors whose performance is valued by their compensation package. While some agents indicate they won't show their clients your listings simply because they don't accept your stated commission IMO indicates a lack of fiduciary responsibility to their clients.

Posting the commission in the MLS simply informs the buyers agent what the opportunity is worth for their performance, it's none of his business how much the sellers agent is earning, especially since he doesn't know the opportunity cost to the agent. Great post.

When I have my buyer's agent hat on, whatever is offered in the MLS is what I expect to be paid.  Sometimes it's less than the listing agent, other times it is more.  If it's not what was offered, that is the only problem I would ever have with it.  If I want more money, that's between me and my buyer-client.

My only comment here is that what my listing says is what is in the MLS and the other agent knows what they are getting paid from my sellers (which is an agreement between me and my sellers)  

And on the buyers side I know what the MLS says and I'm either okay with it or handle it with my buyers brokerage agreement.

HA!  Why did your client accept the buyer's offer in the first place?  And in a hot market, what do you care if the deal falls out . . . you have back-ups.  There's no damages to the seller in a hot market.  Move on, and stop blaming the buyer who didn't created the sale fail on purpose.  Geez, Karen Fiddler, Broker/Owner a buyer wants to purchase a home and then can't.  It wasn't intentional, and the seller and their agent seem to take it as a personal affront. Move on!  Sell it to someone else.  

Karen, I like your strategy, especially since you share the philosophy with your sellers. While it's true that listing agents often spend more on advertising, etc., the buyer agents do all the driving around, often showing dozens of properties (clearly in a buyers' market). In our area, the commissions are usually split down the middle and one hope things equalize over time.

In some cases, I see your point Karen as I have done that myself for specific reasons. The counter balance to this discussion as I mentioned on Greg's post is that when I represent buyers, I exclusively work with a buyer broker agreement that specifies my fee for my services a guaranteed minimum % of the sale price. I make no exceptions.

So, if the buyer and I come across a listed property that is less than my fee, I point this out to the buyer and the buyer must pay the difference if they desire to purchase the property. If so, what happens? Sometimes (more often than not) the buyer may offer less on the property to take into account their total cost of acquisition. In most cases, the seller accepts. I make exactly what I expected, the listing agent, a little bit less. But listing agent usually only finds out at settlement time. In the end, it all washes out.

In some other cases, it leaves the buyer pondering, and they decide to move on to another property. Their call, to perhaps the detriment of the seller.

It's the way it rolls.

No way, I don't believe this blog.  Actually I was initially moved but after a couple reads I think you wrote this to be controversial, not because you practice this policy.  I see you're from Orange County and a few things from the post don't sound right.  I have always split the commission down the middle for the following reasons, and I bet you do the same:

1) I want agents to show my listings.  I actually want agents to be excited about the possibility of working with me.  Although I'm a tough negotiator I am professional and honest.  I would hate, and I mean hate to have the local agent community start chirping to each other about how I have an unbalanced split.  You take this chance?  On all your listings?  

2) All parties are going to see the commission instructions prior to the repair request.  How could this not haunt you in those negotiations?   

3) You don't believe in the Golden Rule?  Does everyone know the Golden Rule?

4) 3.5% higher than the market average?  Really? How many listings are you considering, and over what period of time?  

5) How does your client (in a seller's market) get harmed by a cancellation?  

You're a good writer and I think you're just trolling for fun.  This is not your policy.  

As long as the Buyer Agent receives the Published Offer of Cooperation , they have no beef !!!

Interesting! You make some good points. I never really thought about this. In new construction buyer agents often get a higher commission than the developer rep, volume being the great leveler. Buyer agents work very hard, some coaches say you have to work 10% harder with buyers than with listings, but I think it depends on the individual and the listing. It's your business model, if it works for you and no one's complaining, go for it.