Raising the Rate:  New Ways Agents are Getting Higher Commissions 

by Liz Ganshirt


When it comes to the real estate industry, delivering great service is the No. 1 must. Not only does this get you referrals, happy clients and stellar testimonials, but it also makes you worthy of that commission. 

Due to Federal anti-trust laws, no commission can be described as “standard,” because that could be perceived as price fixing. All commissions are up for negotiation. That said, Zillow and Trulia’s discussion boards both report Chicago commissions as fluctuating between 5 percent and 8 percent, with the high-end providing cleaning services, staging, photos and video, detailed marketing plans and advertising. Other major U.S. cities such as New York, Los Angeles and Seattle report comparable ranges.

What is included as services rendered in that commission structure varies. While there are certainly typical average commissions that are shared between the seller’s agent and buyer’s agent, some agents have their own commission models for their business. However, this is not a story about discounting commissions, but rather, including additional services and convenience activities that will increase your rate of commission. 

For example, an agent might have a “menu” of options with a correlating commission due to out-of-pocket costs the agent must cover. Or maybe an agent has a fixed commission rate because he works with a lot of short sales and foreclosures. While the percentage split-commission is the leading agent commission structure, according to the National Association of Realtors, the median gross income of Realtors was $43,500 in 2012, up from $34,900 in 2011. Agents are essentially entrepreneurs, and creative agents create their own commission structure that benefits their business and their clients.

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  • Gary Lucido says:

    I looked up the history on that Mokena listing. They originally priced it at $1.175 MM back in 2008 and then $850K in 2010/ 2011. So no great miracle that the house ultimately sold when listed for $795K. Now, granted, it was listed in late 2012 at $800K but the market is much stronger now. I just don’t believe that the agent makes that much difference unless you are comparing to those agents that are unresponsive and use crappy photos.

    Another issue I have is the belief that a higher co-op makes a difference. If it is true then those buyer agents aren’t acting in the best interests of their clients are they?

  • Mike LaFido says:

    Gary, I can appreciate your response “Does a higher co-op make a difference?” It’s been my experience it does (from both research and experience on the listing side). The flip side of the coin (offering 2% or less to buyers broker) has a negative impact (from both research and experience on the listing side) on both the days on market and the list/sale %.
    As far as the marketing being much stronger…that is such a general statement. The market in Mokena for 750k plus homes is worse than last year. Feel free to check out the data from Info Sparks. This particular homes
    11.3 months of inventory. 7+ is a buyers market (up from 9.2 last year)
    Homes are selling for 91.7% of original asking price (down 95.4% last year).

  • Anthony says:

    Great feed back Mike! I looked into both, and I too agree that you need to have full research to make an opinion. Thanks!

  • Gary Lucido says:

    So all those buyer’s agents that are being influenced by higher or lower co-op commissions are doing a disservice to their clients by steering them to properties that will make them more money. Right?

  • Earl Ruthman says:

    I believe almost 100% of realtors will do what is best for their clients (seller and buyers). The only issue i have when i am looking at the coop commission if it is notably low is that it may indicate dealing with a difficult person (seller or agent). But that being said wouldn’t impact showing or making an offer on that property.

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