Innovative Commission Structure

Having gone through some real estate transactions as both buyer and seller recently, I was dissatisfied with the rigidity of the current commission structure. There are full-service agents that charge 3%. Then there are a few discount agents that charge a flat fee for listing your property on the MLS. I was very lucky to find agents who were willing to be more creative about how much they charge. I really liked their commission structure.

I was wondering what agents/buyers/sellers think of the two commission structures below.

Example 1:

When I was selling my place, I handled the marketing and open house myself – providing all the info for the MLS listing, staging, printing brochures, measuring and creating floor plan, coming up with a price, setting up appointments, deciding which offer to accept, etc. After I accepted an offer my agent started to do his work – opening door for inspector, appraiser and someone from the fire department; negotiating based on inspection and appraisal report; negotiating when certain dates need to get pushed back; making arrangements for the closing date, etc.

The agent ended up charging 1.8% commission (60% of the 3%) for the service. At the end of the day, I saved some money, and the agent got a fair paycheck for the work he did. We were both happy.

Example 2:

I was the buyer this time. I found an agent who was willing to charge by each service provided instead of a flat rate commission. I forgot all the details but the list was something like this:

1) flat fee: $2000 (only if a deal goes through, based on a $300k purchase)

2) schedule and attend appointment: $35/each

3) submit offer and negotiate: $100/each if not accepted; $200 if accepted;

4) attend inspection: $50

5) negotiate appraised price: $200

6) negotiate repairs: $200

7) negotiate if buyer/seller propose a date change: $100/each

8) other major negotiations (house flooded right before closing, etc.) $200-$500/each

She would give you a rebate if you spend less than what she receives from the seller's agent. If you spend more than what she receives, you don't pay anything extra. I ended up receiving a $2500~ rebate from her.

More real estate tips at Program Realty Wix site


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