HOW AGENTS GET PAID
When a Seller hires a real estate agency and puts their property on the market, they agree to pay the listing agency a certain professional fee, based on the final sale price–depending on the property, the type of marketing most appropriately needed, and the brokerage policy-- commission is negotiable and that compensation is not due until the property is SOLD. Sellers also have the recommended option of paying commission to the agency that brings the buyer to the table - which makes it easier for the buyer to purchase a home without added fees, as they are likely already worrying about their down payment, earnest $, inspection fees, lender fees, moving costs, closing costs. TLC Real Estate also firmly believes that a fair & equitable 50/50 commission split with the Buyer Agency is the best approach to attract Agents and their Buyers to TLC listings. Before even being shown properties, Buyers are expected to have written agreements with their agents, acknowledging they may be responsible for None of, Some of, or All of their agent's commission – such as in the case of a low-or-no commission offered by a Listing Agency or a For Sale By Owner, however, TLC highly recommends the Seller take into account the Advantages of taking that burden OFF the Buyers, as they may not be able to offer as much on your home or property, or may choose to not even see your home.
How does it break down from there?
SAMPLE COMMISSION FEE STRUCTURE
Sample 6% on a Residential House w/ a 50/50 Split
(AGAIN- professional fees are negotiable.)
LISTING AGENCY: On a sample 6% commission, listing agency will earn 3% on listing side w/ sale. TLC would offer 3% to Buyers Agency, as stated in a Compensation Agreement signed between Agencies BEFORE showing.
LISTING SERVICES: ALL MARKETING, property prep consultation, coordinating agency compensation agreements, showings & follow-up, negotiations, inspection/repair/appraisal process, transactional services to closing.
Upon closing, Agent takes check for 3% of sale price to Broker. If a Franchise, a fee is typically subtracted for a Franchise fee (for access to national resources/branding). Broker splits remainder w/ Agent on pre-determined split & cuts Agent a pre-tax paycheck.
Listing Agent Finally Gets a Pre-tax Paycheck minus ongoing time and effort incl. pre-listing CMA research, interviews, listing prep and meetings, marketing prep & implementation, client communications, ongoing marketing time & financial investment, compensation agreements for each showing, inspection/repair/appraisal/coordination, transactional services & sole proprietor expenses, gas, supplies, insurance, license fees, MLS & key fees, equipment, communication costs, general business marketing, overhead etc...+ income tax.
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BUYER'S AGENCY: Prior to showing property, must have a written agreement with Buyers on compensation in case individual Sellers are not offering satisfactory Buyer Agency compensation. For each property of interest, Buyer agent must contact Listing agent to determine any Seller-offered compensation, get a written compensation agreement, and then discuss with buyers which properties they want to see, given any extra costs on specific houses. TLC believes it is in both the Sellers' and Buyers' best interest for the Seller to offer reasonable compensation to the Buyer Agency. TLC also believes in a fair and equitable 50/50 split. For example- on a sample 6% commission, The Buyer Agency would receive 3% upon successful closing.
BUYER SERVICES: Buyer qualification, property research, compensation agreements, tour routing & scheduling, providing maps, plats, sellers disclosures, home showings, negotiations, inspection/repair/appraisal process, transactional services to closing.
Upon closing, Agent takes check for 3% of sale price to Broker. If a Franchise, a fee is subtracted for a Franchise fee (for access
to national resources/branding). Broker splits remainder w/ Agent on pre-determined split & cuts Agent a pre-tax paycheck.
Buyer Agents Finally Gets A Pre-tax Paycheck minus ongoing time and effort qualifying & working with buyers, coordination compensation agreements and showings with listing agent, client communications, inspection/repair/appraisal coordination, transactional services & sole proprietor expenses, gas, supplies, insurance, license fees, MLS & key fees, equipment, communication costs, general business marketing, overhead etc...+ income tax.