When you decide to sell your home make sure you know how much commission is being offered as the Compensation to the Selling Broker. I have seen Listing Brokers Advertise a 5% Commission, whereby they take a 3% Listing Broker Fee and offer only a 2% Cooperating Broker Fee. I would advice the seller against this type of commission split.
DollarsBack Realty.com’s Listing Fee is only 1.5%. We then allow our client to choose whether they want to pay a 2.5% or 3.0% Cooperating Broker Commission.
My Best Advice to Sellers is “Don't skimp on the Selling Agent's commissions”. These are the agents that are going to decide whether or not to bring their client to view your home and you want to give them as much an incentive to show your home as possible.
I have heard seller’s say "well all they did is bring this client to my home and sign some papers and they want me to give them $6,000? What a rip off!"
That 6,000 doesn't go into the Selling Agent's pockets.
For example, suppose you have a $200,000 Townhouse to sell and you agree to pay 3 percent compensation to a Cooperating Broker. In addition to the four way commission split shown above, many times that agent had to pay a 30% refer fee to get that client (leaving $4,200) . THEN the broker (company they are under) takes as much as 50% for their cut (Leaving $2,100),
Uncle Sam will take another 25-35% (Leaving around $1,500) and lets not forget about the several thousands of dollars in overhead that is required to be a licensed Realtor.
When an agent shows a property to a potential buyer, one thing they generally look at is how much real estate commission is being offered. All other things being equal, Agents typically will show homes offering 3% before the ones offering 2.5%.
If your home is offering only 2.5% to the other agents, it may get fewer showings. Your property will therefore be exposed to fewer potential buyers. As a result; you will be helping other seller's get their homes sold first.
Bottom Line - I have seen identical house one with a 3% commission and one with a lower commission and typically the Seller offering a 3% will get many more showing and sell their home faster and for more money.