Michael E. Byczek, Managing Real Estate Broker

Brokerage Commissions

Standard brokerage arrangements require the seller to pay the broker a percentage of the sales price as a commissions. For example, if the property sells for $250,000 and the broker requires a 5% commission, the seller will pay that broker a commission of $12,500.

If the Buyer has an agent, he/she will share the commission with the seller's broker. For example, the seller's broker may offer an incentive to the buyer's agent of 20%. Therefore, the seller's broker will receive $10,000 and the buyer's agent will receive $2,500.

The buyer has bargaining power if they don't have an agent. They will expect a discount on the sales price because the seller's broker keeps the entire commission. In the above example, the buyer may want a $2,500 discount.

Another strategy for homeowners is to offer two different commissions. A fixed price to the seller's broker and a fixed price to the buyer's agent. The seller and buyer can negoitate whether to include a discount on the sales price if the buyer doesn't have an agent.