Midtown Direct Real Estate News

There is a dirty little secret that some Midtown Direct Real Estate listing agents are keeping.  This little secret eventually gets out but usually not until it is to late for the home owner or anyone else to do anything about it.

It all starts with the real estate commission which is negotiated at the time that the home owners sign their listing agreement.  What happens is a decision is made as to how that total commission is to be split.  The normal practice is to split the commission 50/50 between the listing agent and the buyers agent.  Sometimes when the listing agent is trying very hard to bring in a buyer quickly the listing agent will pay out a higher commission to the buyers agent as a incentive to get more showings.  Same thing that many car companies do when they offer rebates on certain cars, the number of people looking at that type of car increases and the sales increase.

Now to the dirty little secret:  In a few of the cases this has taken place it just so happened that the home seller was looking over the Hud1 form (The legal form that spells out where all the money from a real estate settlement is going) and asked why the listing agent was getting much more money than the buyers agent.  In other words the seller was unaware that there listing agent was paying them self much more than half the commission and the sellers did not even realize that they had agreed to that.  To me this seems more than a little shady!!

Why is this a bad thing to have happen?  It is not a bad thing to pay a higher real estate commission for performance, but 9 out of 10 times the listing agent for a home is not the selling agent.  The listing agent is going to do about the same amount of work if the real estate commission is 50/50 or arranged in some other way.  Don’t get me wrong, a listing agent should get paid for the services they provide, and many times a 50/50 split is fair, but in my view it is never fair to the home seller or to the buyers agent for the listing agent to be receiving 20% more of the real estate commission than the buyers agent is.

I regularly use the commission split to the home sellers advantage.  How do I do that, I regularly will make sure to be paying out to the buyers agents a higher percentage than is the norm in a given area.  This helps to generate more showings and more showings usually means a offer earlier in the sales process, which usually means a higher price for the home seller.

James Boyer REALTOR 973-647-0253 your Midtown Direct REALTOR.