Real estate commission on one agent (buyer) sale of property

20 Replies

I'm in Michigan. Selling my home. My previous listing agent contract expired in November. No signage and not listed with anyone. The same agent brought a buyer. Wants me to pay 4% and broker's commission. They are getting the house for a good (fair) price based on comps and this is considering a Michigan winter market. I feel the 4% is generous and do not see any reason to give anything more in the way of commissions. Is this correct and if not, why? Why should I give her 6% or anything more than the 4% I'm willing to contract. Thank you for any comments I may get! I am willing to let this deal go because I am getting ready to put it up FSBO in a couple of weeks.

What's the price point of the property? Is it a $8,000 mobile home or a $1.4 Million Horse Farm etc. That would make a difference to me. As far as a "standard priced" property that I had listed and was not back on the market. If I had a buyer I would make contact with the seller for 4%. It sounds like they are asking for like 10%?

Thanks Mike for your response. This is a SFR on 5 clean acres with a 2 story small barn. House is updated and clean, 2172 sf. When I asked the (ex)agent what the terms were the response was 4% and $250.00 compliance fee to broker, which I am willing to pay (could you tell me what a compliance fee is)?

Offer to purchase received at $265,000. Zillow has a zestimate of $271something...I know Zillow is not final word on price. So, at that price and 4% comm. I am good.

I look at the contract and it says seller pays broker's fee. And mentions in one party agreement that broker's fee (in addition to the 4%) TBD. Also trying to put in"seller's commission obligation hereunder shall apply regardless of whether Seller subsequently lists the Property with another licensed real estate broker or any other party (I have crossed this out).

As an investor (this is not an investment property,is my personal residence), I want to be fair and care about my reputation but am not going to be taken advantage by agent.   I do not want to pay more than the 4% and do not see any reason to.   Any thoughts?


@Kathryne Omaits ok maybe I am reading this wrong but isn’t the agent o my asking for 4% and a broker fee of $250 and your ok with this correct? I guess I am not understanding what is it you don’t want to pay? The broker fee? 6%?

The standard contract in NV has language that says if a former listing brings a buyer within x days of contract termination the agen is due the commission.  X days is usually 0-21 days.  Does your contract have that language?

Bottom line here is do you want to sell the property...???  How much is the argument worth?

Normal commission is 6% and in general its split between the buying and selling agents .  it sounds like this agent is asking for more than they would normally of recd.....

Or maybe I read the question wrong? 

It sounds like your ex agent is representing the buyer they brought to you which leaves you without representation. If you are comfortable with this then go for it. 4% isn't too shabby, especially if you have a qualified buyer lined up.

In TX we have what is called an option period on a listing agreement where the agent can recoup a commission up to X numbers of days after the representation expires if they bring a buyer to you.  This could be what the agent is getting at but it sounds more like the 1st choice above.

Thank you to all who replied, love how helpful the BP community is. The property was post 90 days expiration of listing.   I understand the protection period for bringing buyers and it is there for a good reason otherwise realtors are going to taken advantage of and, in this case, ex-agent is bringing the buyer.

I ended up selling the house and am awaiting inspections which begin today.   What ended up happening was, and this is based on comps, I increased their initial offer of $265k to $268k and decreased 4% commission to 3%.  I thanked the agent for the learning experience and that I actually enjoyed it (new ground for me!)     I was willing to let the deal go because I was not going to pay 4%, only the 3% she would have made during the listing contract. I know I would be able to sell this property within weeks without this deal.

There was language in the one party listing that was really disadvantageous to me (unrepresented) as a seller.   Although boiler plate contract  to the real estate agency,it was a garbage contract for me.  They accepted my counter and it was a fair deal good for all.


New developments, the septic system inspection revealed a failing field.  Buyer backed out.  i will have to get new septic.  Very expensive but has to be done.   So I am now thinking that in order for this to work out at all, I will have to sell myself and hire a real estate agent to do a transactional review of paperwork or take the paperwork to an attorney.   Real estate, you gotta love it.

@Kathryne Omaits It is quite common, and perhaps a bit generous on the agent’s part, to charge 4% in this they Are having to do work for Both the the buyer and seller, where normally they would get the full 6% on a normal listing. 
As for getting hung up on a $250 fee with a $8-$10k commission, seems a bit counter productive. 
Good luck with fsbo, but 80% or so the potential buyers will never know about your house. 

Thanks  for your comment Mike.   The septic inspection was buyer paid.   I have a local septic man I am contacting tomorrow (know to check that licensed and certified if applicable).  He has pumped my tank in past years and in fact the man who plows my driveway and grew up in this area recommended him before knowing of my acquaintance with him.   Was told by plow man that generally have to have engineered fields now (lots of clay out here).   Real estate is interesting for sure.   

Wayne, thanks for your comments. For clarification, I did not object to the $250 broker fee, wanted to know if anyone familiar with it, and nothing was said to the buyer's agent objecting. I want to know what I'm spending my money on though.  

Wanted to check, are you saying that an agent is generous charging 4% comm. on a one-agent listing? You said that otherwise they would get the full 6% on a normal listing, (that being a listing agent and buyer's agent, right}? It is my understanding it is 3% each. What am I not understanding here. Please educate me as to how the buyer's agent is doing work for both. She is not providing pics, gave me an offer to purchase and one-agent listing agreement and disclosure. I'm preparing the house for show and inspections. Using title company. I'm reading what I need to do. What more is she doing for me that she would not otherwise do with listing agent, with both sides getting 3%. I see myself as being at more of a disadvantage not being an agent.

Wayne interestingly the agent who brought the buyer (of which sale failed due to septic) was the previous months ago listing agent. I did not get many showings at all during that time. It was priced wrong from the get go and there were other problems. I have a lot of respect for agents (including the one I had) and I'm not excited about FSBO, but can't afford having an agent now that I have to pay for septic. If I do my target area research and price right, FSBO can go on MLS and can do well, better than what I did with my previous attempt when I had an agent. I'll pay an attorney to look at the paperwork. I think my analysis involves: what do I have to do to make this work, how to best accomplish that, learn and keep moving forward.

Looking forward to hearing your learning-for-me comments.  Thanks Wayne.

The SEPTIC has nothing to do with the value of a broker/agent.

What it likely sounds like you are mentioning in a round about way is that the broker/agent should pay in the form of lower commissions because of a problem you found out with your property. Doesn't work that way.

I had a commercial deal one time where I was making 100k commission as  a buyer broker and mid-deal seller said they did not estimate their tax liability properly so needed to change commissions. I told them their problems have nothing to do with me and they need to pay the fee or will see them in court. They caved. Their problem had nothing to do with me.

Just like being an investor myself if I used the services of a broker/agent to sell one of my properties I am not going to try and make them pay for property issues I am having when selling. It is my responsibility to maintain and upkeep the property while I own it. Live in ready, sale ready, and rental ready can all be different levels and standards of care with a property.

As for commissions amounts brokers and agents are typically doing DOUBLY DUTY when there is not a broker/agent on the other side. That is because often unless the seller is seasoned and selling tons of properties every year then they are not up to speed on the latest contracts and processes. So often what happens is sellers think they are making things easier but in fact it can be more liability to a brokerage. This can be because there are client acts and then ministerial acts. FSBO can often ask items of broker/agent on the buyer side that could cause implied agency for the seller. Brokers and agents often prefer a broker/agent on the other side. This way a professional is on one side helping the buyer and the other side helping the seller.

Sometimes FSBO can work in very hot markets where stuff flies off the shelves days in the market. Most markets are not that hot they are good to average at best. When someone sees a FSBO the buyer thinks the seller is saving a commission so they low-ball them. Additionally what you need out of this property has nothing to do with market values. A good listing broker/agent tends to have the seller do a pre-listing inspection of the property. This way the seller can decide to make the best impression before going to market and decide on what they want to fix or update and what they want to leave to negotiation once an offer is received.

Had an inspection been performed pre-listing then you might have decided all together now was not the right time to sell or could have taken steps to make an easier transition to selling the property.

Maybe going FSBO and having an attorney help you might be the answer. Remember most times they are getting paid by the hour and it can add up really quick!

Good luck and the best of success to you in the sale of your property.

No legal advice given.         

@Kathryne Omaits It is quite common, and perhaps a bit generous on the agent’s part, to charge 4% in this they Are having to do work for Both the the buyer and seller, where normally they would get the full 6% on a normal listing. 
As for getting hung up on a $250 fee with a $8-$10k commission, seems a bit counter productive. 
Good luck with fsbo, but 80% or so the potential buyers will never know about your house. 

@Kathryne Omaits

The realtor brought you a buyer. Take the deal!!!! Or hold the property. Just remember..... a bird in the hand is worth two in the bush. Taken advantage of??You mean because the listing expired and they still brought you a buyer. I generally despise realtors because many of them are so greedy and narrow minded. But in this case I would take the money or keep the headache. Just make sure that you’re peers don’t find out that you let someone take advantage of you.

Joel, I want to respond to your comment.  Somehow there's been a complete misunderstanding on your part of the events and I'd like to be clear on that.   After me initially being okay with the originally requested 4% commission, the commission reduction on my part from 4% to 3% was agreed to by all parties at the time of signing the Offer to Purchase.   The septic inspection was done after the commission agreement.   In no way, and I want to be clear on this, do I believe that property issues on my personal residence (this deal) or any other deal fall upon the value or responsibility of the agent.  The first few paragraphs of your response were totally not the scenario here and I don't believe I said anything to imply that so I am perplexed why you went in that direction.

When questioned about why pay the 4%, the buyer's agent (my ex-listing agent) told me, as others and you have said, that she is doing work for both sides.   I asked her what is she doing (beyond what she'd being doing with a listing agent, of which she's would be couping 3%) and did not get an answer.  I would take care the things on my end that I need to and feel capable to do so.   If I put something on her she doesn't feel is her management/sale issue to deal with she can tell me that I need to speak to someone else to get the answer-no problem, I am learning and don't know the boundaries but am not afraid to learn.   I feel 3% is fair in this deal.  

I want to point out that having been initially the listing agent in the sale of my home, and now on the buyer side, she has the right and advantage of being able to tell the buyer anything that she learned about my situation and property while my listing agent that will enhance the buyer's purchase to their advantage.  And to her credit, the price we ended up agreeing on was fair and good for all.

I have experience beyond selling my personal residence, but not much, and that is where I can be taken advantage of.   I am willing to pay for services and care about my reputation.  Joel I don't talk in a round about way as you said and never said anywhere that I thought the agent should get a lower commission because of a problem found with my property.  For some reason, you decided that was what I was thinking and that was very incorrect.  

Thank you though for pointing out that contracts and laws are constantly changing and I will be mindful of that and will be glad to pay my realtors for their expertise, service and knowledge.

I also appreciated your comments about FSBO and getting low ball offers. Fortunately it is easy to do some comp comparison through the various online real estate presences.

Your comments about pre-listing inspection was interesting and very useful information.  In my particular situation, my own personal residence, it had been suggested by my agent I pump my septic tank,  i had done it 5 years ago and decided against it.   Found out the septic FIELD failed the inspection, I was there, and told the inspector the previous maintenance pump said my tank was good, no problems.   The inspector said that could be, that the field failing hadn't yet reached my tank.   In that case I was glad I didn't have the tank pumped prior to sale (it had been done within a safe range of years prior).   

Anyways, you were I think trying to be helpful (giving me a heads up about attorney costs).

Thanks Joel for wishing me luck. I suspect I'll be changing course again and hiring a listing agent. My exit strategy is I want to sell my home as I am moving to Atlanta and looking forward to getting real estate deals under my belt there and at least one buy and hold in Michigan.

@Kathryne Omaits

To clarify this piece 

"Wanted to check, are you saying that an agent is generous charging 4% comm. on a one-agent listing? You said that otherwise they would get the full 6% on a normal listing, (that being a listing agent and buyer's agent, right}? It is my understanding it is 3% each."

When I list a property The seller signs an agreement for me to receive a commission (We will say 6% for this discussion). I then begin looking for buyers. One action I normally take is to put it on the MLS and offer other agents some commission. (Could be 1%,2%,3% I have even offered the bulk to a buyers agent before on something I had to move quick). Also I don't always sell at 6%. I have sold at 2% and I have sold at 15%. Plenty of factors to consider. So even though commonly people think 3% is some standard it isn't. It is just what commonly is done in areas with common houses. I have as a buyers agent been offered 1% and had to let my buyers know if they wanted this one they had to make up the rest of my commission themselves.

When someone says they have to do more work as a buyers agent on a FSBO it is because it could be anything. If it was as easy as saying perform task 1 through 9 it would be simple. The problem with a FSBO is they don't know what they don't know. Those issues then become the problem of the buyers agent to deal with. On final walk through they took grandmas chandelier down because they didn't feel it went with the house. They fail to leave invisible fence collars. They show up at closing with a quit claim deed instead of a warranty deed. The survey was last done 9 years ago and never updated for the new easement with the neighbor. They quit cutting the grass and now the city did it and charged the taxes. The propane tank is a lease and not owned by the seller. There was never a permit for the deck but the seller said they were sure it was when they bought. Someone has to let the appraiser in during the day and the seller works full time.

Hope it helps some and good luck on your move south!