Commission Splits Between Real Estate Agents and Brokers

**krishjose** · 07-15-2012, 04:46 PM

My question involves real estate located in the State of: California

We as buyer have a real estate agent or buying agent. We just purcahsed a home " All Cash, No Loan" through that agent. Our agent is not bearing any closing costs and we need to bear all. Our agent is saying that he will be getting like 3% out of the sale. That too he has to share with his broker.

He says that he is only a realtor but not broker. If he would have been both, then all 3% would have come to him, without any split. Is this a true scenario ? . Not sure how broker is involved when there is no loan

Also when we do the closing, are there few essential item that we should be careful of or take care ?. We are like amature and buying our first home

Thanks a lot

jk · 07-15-2012, 05:09 PM

He says that he is only a realtor but not broker. If he would have been both, then all 3% would have come to him, without any split. Is this a true scenario ? . Not sure how broker is involved when there is no loan

there being a loan has nothing to do with whether an agent is due a commission or not.

First, I know it's picky but:

Not all real estate agents are Realtors. To be a Realtor, the agent must be a member of the Realtors Association. Along with that, not all Realtors are neccessary real estate agents. One can be a Realtor and not be a real estate agent but instead something such brokers, salespeople, property managers, appraisers, counselors and others engaged in all aspects of the real estate industry.

Anyway, a real estate agent earns their commission by performing as required by their contract. If you agreed to pay X% to your agent, then if he performs as stated in the contract, you owe him that X%.

A real estate agent must work for a licensed brokerage. Your agent could be a broker but apparently is not but works under a broker. The sharing of the commission is controlled by the contract between those two entities. Some companies split it 50%/50%. Others charge their agents fees for office space or such and the agent retains 100% of the commission. The point is; it is irrelevant to you.

Then, if the seller hired an agent and agreed to pay a commission to that agent, it is not uncommon for that commission to be split between the sellers and buyers agencies. Again, this is controlled by contract or agreement.