Discounted Listing Commissions- Who pays the price?

Real Estate Agent with London Foster

As a luxury/waterfront oriented Realtor in Miami, I see lots of things that make me scratch my head each day, but I know it is not just here in South Florida. Luckily the weather is usually good and I get to see views like the one below on a daily basis- so at least that helps.

Aventura Waterway- William McClain

Let's talk about commissions for a second. On the listing side in my area, it is generally 6% (3% to buyer's agent/ 3% to listing agent)- nothing new here... Or is there?

Some brokerages allow for discounting commission while others do not. I know personally that my brokerage (Brown Harris Stevens) does not allow for discounted commissions and neither did my previous broker ONE Sotheby's.



For the brokerage's that do allow their agents to list a property at less than 6% commission, I see a ton of agent's offering the reduced split ONLY ON THE BUYER"S AGENT SIDE. So they will effectively meet with a seller, tell them something like this:

"Hey, I'm not like the other brokers out there who charge an arm and a leg... I'll sell your property for 5% commission instead of 6% and you'll save money and get exactly what you want."

The seller has no idea about what is going to happen next and thinks to themselves, well... I'm saving money which is a good thing- so lets sign today!

Then what does the listing agent do? They keep their full 3% and then offer a measly 1.5%-2.5% commission to the buyer's agent and pass it by the seller without blinking an eye.

My question is this... Is this greed, Laziness or just bad business?


It depends how you look at it... I am not the type of agent to "selectively" show buyer's properties based solely on commission, but is it really fair for the listing agent to take 3% and leave the buyer's agent with less than what is commonly expected? And I know there are a lot of agents that will not show properties offering any less than 3% commission (and I understand why!)


I am ok if listing agent takes 2.5% and offers buyer's agent the same- because some seller's just don't budge. but to take the listing and put it on the market and keep a full listing commission at the expense of the buyer's agent is mind boggling! If my buyer really likes a property, I'll take a hit if you take a hit- but why should I take a bullet while you make a clean getaway? I thought we were in this together!

Now that the market has cooled off- I still see this happening (more now than ever) and I really feel like seller's are getting screwed by their agents. And I see this in some of the top areas from North Bay Road, Sunny Isles, Bal Harbour, Miami Beach and just about everywhere in between.

My approach as a listing agent is this: NEVER MESS WITH THE BUYER'S AGENT COMMISSION...

I don't care if the listing is $250k or $5M- you NEED the buyer's agents to sell the home, don't alienate them because your seller is tight with their money... Either communicate to the seller where the 6% goes and demonstrate your value- and if you can't do that- then YOU, AS THE  (LISTING AGENT) DESERVES TO TAKE THE HIT on the commission.


Nothing is worse than busting your hump and doing the lion's share of the work with a buyer, only to see the HUD prior to closing and notice that Listing agent sat back and cashed in at my expense.

I am curious to hear from other listing agents in other markets to see their thoughts and experience with this in today's market... Am I crazy or am I calling this correctly?


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William McClain

William McClain, MBA Luxury Real Estate Specialist


New York | The Hamptons | Palm Beach | Miami


Check out my  new Penthouse Listing in Aventura: Currently offered at $1,149,000

William McClain is Real Estate Professional specializing in marketing and selling of luxury waterfront homes and condos in some of the most exclusive communities throughout South Florida. These areas include Miami Beach, Aventura, South Beach, Sunny Isles, Coral Gables, Brickell and  Downtown Miami.



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Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • Green • GRI • HAFA • PSC Calabasas CA

If someone hires an agent for very low %, they get what they paid for. They pretend to pay, and that agent pretends to work. Also, if the agent could not negotiate her own commission, how they expect that agent will negotiate the highest price for their home? 

Mar 05, 2018 10:58 PM #2
Susan Weissman
Weissman Properties - Delray Beach, FL
Personal, Professional, Individualized Service

I also have this gripe. So many agents in my area take listings for 5% or only pay out 2.5%. I feel like not showing their listings, but often they are exactly what my buyer wants, so I tell the buyer upfront that I work for 3% and if the seller is only paying 2.5%,  the buyer will have to pay the other .5%. That way they can know to make a lower offer. Some agents who take listings at discount commissions never answer their phone once they get the listing, they give you discount service as well.

Dec 13, 2018 06:49 AM #3
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • Green • GRI • HAFA • PSC Calabasas CA

In my corner of CA, we write into a listing agreement how commissions are split.

Dec 22, 2018 12:00 AM #4
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • Green • GRI • HAFA • PSC Calabasas CA

And to tell you the truth, if a listing agent agrees to discount her commissions, it is up to them, the buyer cut is rarely reduced since that agent brings a buyer.

Dec 22, 2018 12:02 AM #5
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William McClain

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