How to structure a flip commission?

11 Replies

I'm just wondering how a commission is usually split on flips when working with an agent. Is it usually 3% on the purchase and on the re-sale? Are some agents willing to budge a little there? I just want to make sure I understand how that works.

Thanks,

There are no set commissions, everything is negotiable. I'd encourage you to focus not on the cost, but on what you net out of a transaction. A good agent is worth every bit of 3%!

Chris is absolutely right.  I personally will say that I've done plenty of deals where I don't get a commission on the buy side (laywer's auctions, some Auction.com, etc), but I know I'll get it on the sell side.  I will say...investors that are willing to give me it on both sides and that don't try to cut me down on rates absolutely end up getting more attention.  

I absolutely agree with Michael...not only that but a lot of the work an agent has to put in from viewing MLS listing, constant CMA, dealing with listing agents, etc are intangibles that you can't put a price on it. My guy in South Carolina I believe is the best at working deals for me and in return I have no issues getting him the 3% on both sides...money well spent.

I agree with what all of these other folks are saying. I will reduce my rate some if the rehabber is doing a lot of volume and they understand the process because that means less explaining and ushering for me. 

Hi, a question regarding CMA agent sends you. Is their CMA the most accurate to go by to use to formulate a deal/ARV? Doing my own due diligence/looking on Zillow,Trulia, etc, for comps, but see that some of the properties criteria on CMA are very different from the one I am looking at: SQFT, 2 story instead of 1 story, etc.

Originally posted by @Astrid Van Boom :

Hi, a question regarding CMA agent sends you. Is their CMA the most accurate to go by to use to formulate a deal/ARV? Doing my own due diligence/looking on Zillow,Trulia, etc, for comps, but see that some of the properties criteria on CMA are very different from the one I am looking at: SQFT, 2 story instead of 1 story, etc.

Use a realtor's CMA with caution and reason unless you have specifically trained them on what you are looking for. Then its usually gold. imho

Bill J.

Thanks Bill. Just needed some confirmation, as I have told my realtor that comps on there is not really suitable comps.  Just also wondering about changing realtors. I am doing wholesaling/assignment of contract which would mean I am looking at houses that need some kind of rehab. However, I often get send turnkey properties, that I don't see how I can flip them without no money down.

@Aaron Ormiston

When working with the agent on the acquisition of the property you intend to flip the commission is paid by the seller. Once you have renovated the property and want to sell you then sign a listing agreement with your agent where you will be paying the commission. Typically you are looking at 6-7%. Your agent will then offer a portion of that commission to all of the other brokerages on the MLS so that they bring in a buyer.

Thanks guys. 

My REA said I have to add a 3% commission to my offer price as the property wasn't listed on the MLS. I don't mind paying her 3% commission, just want to know if that is standard practice.