How do we know what's in their listing agreement? 🔮

But to your question, if you need a certain fee to make it worth doing a deal on that property with that client, you can always ask your client in your buyer's brokerage agreement to make you whole in the event the co broke goes below your fee.

The sellers brokerage fee and the co broke are agreed between the seller and the seller's broker. Most MLSs only require that they give us something. We've seen a $1 co broke.

I don't worry about such things.

If the MLS says you are getting 2% and you are happy with that, why does that change when you find out that the listing agent is getting 4%?  You were happy with 2% when you saw it on the MLS.

If buyer agents need a certain percentage in order to make their business work, that needs to be negotiated with the buyer up front and included as part of the buyer-broker agreement. Many sellers/agents do not split the commission evenly. And regardless of whether that might be seen as "fair" or not, it's common.

Now if what you're saying by"we know their listing agreement isn't gonna match up with that" is that the split paid out at closing is different than the split agreed upon between the seller and seller's agent, that would certainly be an issue. And in that case, options would be to raise the issue (along with copies of the listing agreement and closing docs) to the attorney or title company depending upon what state you're in and see what the next steps are. Although I'm not sure how you'd have a copy of the listing agreement.

If you don't like the co-op fee that the listing agency is offering... you can go out and get some listings of your own, and offer whatever co-op fees you'd like. 

But in the meantime, you brought your buyers to this listing... it was offering 2% when you showed it, and you chose to show it, and now that's the co-op fee you're stuck with.  Be happy that your buyer found a property they like and suck it up.

(and you have NO idea what's written in their listing agreement!)

1) You have no idea what the total commission agreement is.

2) What does it matter if the LA makes more than you?  It'll swing around eventually.

3) There is no law, rule, NAR code or even common courtesy to evenly split the commission.

4) If the listing agreement doesn't match up to the commissions paid, that's something the seller would know and need to address.  You're not a party to that agreement and that would be out of your scope.

What the listing agent and the seller negotiate is between them.   If your buyer agency says to pay a certain amount, your buyer can make up the difference.   

Hmm, I have never really thought about that and I am not sure there are options but there should be.

Candice A. Donofrio is well known for telling it like it is!

Many excellent responses, especially from Candice A. Donofrio and Ryan Huggins - Thousand Oaks, CA 

@Kevin McCullough: as a broker you should be well aware that the listing commission is not always split equally and there is no assumption of a certain seller commission as the math in your question implies.

I am going to agree with Alan May . It doesn't matter what the listing says between the seller & their agent. In our board, we write out exactly what we are going to pay the buyers side so the seller has an idea if it is split 50/50 or not. I have always done it that way but who knows if a seller wants to pay their agent more?

You have to suck it up in this instance or have the buyer compensate you. Hope you have an agreement with them.

Everything was decided between seller and listing agent prior to the listing going live. You have an opportunity to get more money from the buyer in the BB Agreement if you wish to pursue. 

Every business model is different. There may be many reasons for an uneven split. 

1. At some point we may all be in the environment where every agent is paid by their client. PERIOD. None of the  "I'll help you buy a house FREE of charge."

2. However, the compensation to the buyers agents is PUBLISHED. That is the fee you AGREED to work for.

3, It seems you think the other agent is being paid too much or feel the compensation must be equal.

Until #1 becomes a reality, it is incumbent upon you to educate your BUYER redarding your minimum compensation. They may agree to pay the deficit or instruct you to skip all listed property for which they must pay you. Or you can contact the listing agent and say, "Not gonna show for less the 5%!" Take it from there.

There were BROKERS in my area who listed property in the MLS with the published buyer compensation of ONE WHOLE DOLLAR. That is a trap to avoid.
My suggestion is to have "the talk' with your buyers to let them understand in the sea of smiley faces that looks like the real estate agent pond, there are some bottom feeders.

How do you know the listing agreement doesn't match up? In NC our listing agreements state the split of the total commission and that is what is offered to the selling agent in MLS. There's no rule that a commission be split 50/50.

I don't ever know what the listing agent is getting paid. In your scenario, that agent could be doing a 4% commission and splitting 50/50

Commissions are listed on the seller and buyer estimated closing statements. My escrow officer carefully goes over the estimated statements with my clients. I am always in attendance at the sign-off. As an independent broker, I submit the commission demands directly to the escrow officer.  The seller knows what they signed in the listing agreement.  If anything were called into question the seller would verify the commissions paid with the escrow officer. 

what the listing agreement is you don't know and don't have any right to know.  You get the co-op in the MLS, need more, have a buyer's brokerage agreement that gets you more.

You need to have a buyers agency agreement that specifies what you will be paid, then your buyer can write into the offer that the seller will pay you your required percentage.  If the seller refuses then the buyer will need to come up with the remaining amount.

MLS Rules are usually- Once you make the appointment to show a property , you have accepted the published Offer of Cooperation

Learn from this going forward. Ask the question early on and ask for an equal split.

I was stumped on the knowing their listing agreement isn't gonna match up part.  Isn't the compensation noted in the MLS listing?  If you show it without negotiating something different beforehand, that's what you get AND if the listing agent is getting paid 4% that is between agent and seller, not you.

There isn't much you can do because proof would probably come after the transaction closes and proof is difficult and of course the listing agent could back date a listing agreement and put on some false signatures.  

THe new NAR MLS rules now require the buyer's agent commission be published on all public facing listing displays.  This may curb that incident, as the seller may now see what the listing agent entered as a cooperating commission, and if the seller is knowledgeable as to how the industry works, knowing paying a buyer's agent a reasonable commission (a buyer is as good as a listing) is worthwhile.

One option is to get out of the traditional legacy compensation system. The co-broke, commission paid at closing is long overdue for change. Find an alternative that works for you and implement it, rather than complaining about a listing agent not paying enough. The "only get paid at closing" compensation model is high risk to the broker/agent. High risk means high reward to the broker/agent and a high cost to your clients. If you change the risk/reward calculus you can get paid for your time, knowledge, and expertise, while saving your clients money. They love it. High risk to the broker/agent means little to no risk for the seller/buyer. If they have some skin in the game, your compensation can be ensured, while they save money. Think about real estate consulting, hourly fees for services, etc...

Spell our the terms of your fee in your Buyer agent agreement As far as the listing agent goes, your reputation is everything in this business and if someone operates in the manner you described they probably won't be around very long.

I never see the other agents' agreements, whether they be buyers or sellers. My client has agreed to pay me - if the seller doesn't pay what my buyer agreed to pay me, the buyer can make up the difference.

I don't fret over what I am being paid by the seller if I'm representing the buyer. I'm just grateful that my clients won the bidding war so they can buy their dream home!

No options other than asking your buyer to pay the additional 1% which should be addressed in a buyer broker agreement. I doubt if any listing agaent is going to share their listing agreement. Many times the LA charges more because the seller wants lots of expensive advertising.

WOW!  Assuming something is very dangerous and it isn't only a coincidence that the first part of the word is ASS.   How would you ever be party to the Listing Agreement between the listing brokerage and the seller?   Please explain.  If you feel you are worthy of a higher commission, make it happen for yourself.  Charge your Buyer or earn some listings of your own. 

I have told buyer agents bring me something extraordinary and I will pay more for it. If not, I can get offers all day and pay commissions as listed. Giving and getting what you pay for holds....

Agreed wholly with Candice A. Donofrio 👆😁👍

Show or don't show the home.

It is written in our contracts what percentage each agent will make. If the seller is a repeat client of mine and I decide to cut my commission it is written up as such. Our commission is 7% - 3.5% to listing agent and 3.5% buyers agent depending on if I am cutting my commission my % will be lower than buyers agent. We also have to give our clients whether it is a seller or buyer a form indicating our remuneration. Everyone knows the total commission being paid.

Follow the rules of your MLS. 

It's the contract with your buyers that can make YOU whole. In a Buyer Agency agreement you can specify your return, e.g. 3%, with the buyers liable fot the difference if the listing brokerage only offers 2%, for example. Make sure you explain the concept to your buyers up front.

If you are referring to the closing table, then the attorneys will sort that out.  If you have been informed of your compensation, then you know what you will get.  Don't worry about the LA and their compensation; it's really not your business.  If they listing agreement doesn't match up, the attorneys will have to sort that out with Seller at closing.  You should be  covered with your agreed upon commission, if you have that in writing.  Good luck!

Inventory has always been King. In small rural markets, 85% of the sales are list what you sell and no splits, no drama. You do the A to Z and the layers of players is missing. Alan May is right. Take on the listing co op or don't . Accept the compensation if everything pans out to get front row seats at the pass the keys / slide the check successful real estate closing.