Is this a typical commission strategy?

moonshadowJuly 8, 2013

x% commission, and on top of that a fraction of x% commission dedicated for advertising? (In other words the fraction of a % of commission is separate from the sales commission.)

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rrah

I've not heard of it broken down like that with a typical real estate agent. I do know of a similar strategy being used by auctioneers. Seller pays advertising fee upfront, and the rest of the commission is charged to the buyer.

While it's important to know how a commission is split up for advertising and the buyer's agent, the bottom line is important in the end. For example, if an agent is charging 7% and offering only 1.5% to buyers' agents something is wrong in my opinion.

    Bookmark   July 8, 2013 at 11:00AM
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moonshadow

Thank you. In this scenario the x% 'sales' commission is split equitably between any participating agents. The additional fractional % for advertising is retained by listing office, not shared. (So basically it's a listing fee.)

    Bookmark   July 8, 2013 at 12:58PM
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Suzi AKA DesertDance Zone 9b

It's bad marketing by which ever agent did it.

We recently sold a home and interviewed 4 agents from different brokerages (found them on Trulia and Zillow). We chose the one who sold us! The ladies were realistic and negative.

He included advertising for FREE! Yes, we paid the same commission, but he made it seem like it was a part of his service!

He won! And, later we noticed there is an entire freeway off-ramp named after him in that town in Southern California.

The man is GOOD, and he sold our home FAST!

Suzi

    Bookmark   July 8, 2013 at 1:10PM
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sylviatexas1

I once worked (briefly, but not briefly enough) for one of the "big houses", a franchise of a national company, & one of the things they did that I did not like was to charge a "transaction fee", a separate amount on top of the commission.

The transaction fee, $65 if I remember correctly, was supposedly to cover administrative & miscellaneous costs, & it was charged to every principal in a sale.

If the agent didn't fill it in on the listing agreement or the buyer rep agreement, & the seller or buyer didn't pay it at closing, it was deducted from our checks.

If one agent in the office had the seller and another agent in the same office had the buyer, or if the same agent had both seller & buyer, the agency charged $130, & if an agent shared the commission with another agent in the office or paid a referral to another agent in the office, we *both* were charged the $65.

I do not work there any more.

I seem to remember that the Texas Real Estate Commission put a stop to it.

I wish you, & your agent, the best.

    Bookmark   July 8, 2013 at 4:16PM
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gyr_falcon

Seriously, Suzi? An off ramp? I'm curious!
The only reasons I know of for naming CA freeway sections are public servant memorials, trash cleanup agreements or things of that nature. Maybe add political favor paybacks, lol, which would not be a plus column item IMO. Why would a real estate agent a named ramp? Care to share any more details?

    Bookmark   July 8, 2013 at 10:51PM
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gyr_falcon

I don't know the answer to your question, moonshadow. Was the commission percentage quoted lower than what is typical in your area?

    Bookmark   July 8, 2013 at 10:55PM
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ncrealestateguy

Tell this agent and their company to go take a hike!

    Bookmark   July 9, 2013 at 7:36AM
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moonshadow

Was the commission percentage quoted lower than what is typical in your area?

On the lower end of the range.

    Bookmark   July 9, 2013 at 1:54PM
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ncrealestateguy

Sounds like they want to charge less "commission" because 50% of the "commission" is split to the buyer's agent. If X amount is classified as a "fee", and not split with the buyers broker, then they will net more.
I still say tell them to take a hike.

    Bookmark   July 9, 2013 at 6:03PM
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