Thread: 2.5% Commission??

I got an REO listing with a 5% comission, but the problem is they want it split 50/50, instead of allowing us to give 3% to the buyer's agency to avoid competition over comission percentages.

I e-mailed and asked if they could alter that, and they said their client requires it to be split 50/50, which I don't understand.

Would you want to show a listing where you couldn't get at least 3%?

The company is Integrated Asset Services.

I typically show whatever the client wants to see no matter the % pay-out. More is better but it does not always work out that way.

I ran into this scenario recently and it makes NO SENSE!

A buyer I was representing wrote on a listing that advertised a 3% selling agent commission. We got to settlement & the asset manager wouldn't approve the HUD until it reflected a 50/50 commission split at 2.5% per side.

We ended up just changing the HUD to reflect 2.5% and the listing broker just cut a check to my broker for the difference.

I have no idea why banks/asset managers would want to handicap their listings by reducing the selling agent commission. I mean, what do they care how the commission is split as long as the total commission doesn't change? Makes no sense to me.

They want it at 50/50, so offer 50% to the buyer's agent. I think in this market, if an agent has a buyer that actually wants to buy, and CAN buy, that agent isn't going to lose a sale over .5%. And if an agent refuses to show their buyer a house because the commission isn't 'good enough', then I feel sorry for that buyer - we are supposed to act in our CLIENTS best interest, not our own.

Originally Posted by reolister

They want it at 50/50, so offer 50% to the buyer's agent. I think in this market, if an agent has a buyer that actually wants to buy, and CAN buy, that agent isn't going to lose a sale over .5%.

I agree.

Originally Posted by reolister

And if an agent refuses to show their buyer a house because the commission isn't 'good enough', then I feel sorry for that buyer - we are supposed to act in our CLIENTS best interest, not our own.

I have some concern with this blanket type of remark. Yes, you should represent your client - but you are in business to make money after all.

So, lets run this type of thinking WAY out to a crazy extreme example:
Instead of it being 2.5%, lets drop it down to.....
2%?
1%?
0%?
-5% (where the seller hates real estate agents so much that he charges a premium THAT YOU HAVE TO PAY to be a part of the transaction to represent your client)
-25%?


Yes, I know its somewhat absurd to run it to that extreme. But, I hear that saying all the time - and its not entirely correct IMO.


At some % (which is different for each person), it doesn't become feasible for you to be in business to represent your client or anyone else.

While I know we aren't supposed to talk commission this would be pretty typical in my market -- often split 50/50 here. The agreement you have with the asset manager is what it is so just put it out there. If you think it's priced well and not getting shown or getting offers then talk to them about either changing the price or the compensation. It is really that simple.

I personal hate deals that arent 3%, there are so many that are i dont really have to show these

I've seen plenty of REO properties @ a 2.25 split for the buyers agent , and 2.5 is pretty common @ a 50/50.

Sure, it's not in the best interests of the bank, but it's nice to see a few listings that don't beat your comission down even more.

I really like intergrated, so I wouldn't complain too much about the extra 1/2%

I have found that working in the client’s best interest will not necessarily pay off for a single transaction, but it will pay off 10 fold in referrals. Plus it is the law...at least in Minnesota

Honestly, I think this topic is inappropriate. If a property fits what the buyer is looking for your are supposed to show that client the property regardless of commission. It is very self serving to only show properties that offer 3%. Think about what you are saying. From the public's eye, discussing topics like this on an open forum really does a disservice to Realtors.