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Various sources I have read state that the typical real estate agent fee is 6% of the sale price of the home and that this is divided into 3% for the seller's agent and 3% for the buyer's agent. What happens typically if there is no buyer's agent? Does the seller's agent get 6% or just 3%?

For example, let's say I find a house I want to buy and go directly to the seller's agent and I have no agent myself. Will the seller's agent get the full 6% in that case?

If so, it would appear that the seller's agent would be strongly motivated to sell to an independent buyer, because in that case they would receive double the commission than if they sold to a buyer that had an agent.

Five Bagger
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  • This is not really an answer, but often times you can negotiate a commission down, but typically not less than 4% or so. The agent will argue that they are essentially they are doing twice the work. – Pete B. Mar 29 '18 at 14:30
  • This is a duplicate question. I am not at desktop right now. Tonight, I’ll search to find the other question. – JTP - Apologise to Monica Mar 29 '18 at 14:34

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The "6% standard commission" is charged by brokers who belong to the MLS (Multiple Listing Service) which means that the property can be shown and sold by any broker who is a member of the service, not just the broker who lists the property. The property also appears on the "Houses for sale" listing that the MLS puts in newspaper advertisements, etc. The commission is deducted from the sale price as agreed to by the buyer and seller, and the seller receives the sale price less the broker's commission plus/minus other adjustments such as mortgage payoff, real-estate tax and insurance premiums held in escrow, etc. The broker's commission is generally divided equally between the listing broker and the selling broker in the MLS group, and if the listing broker also sells the property, s/he gets to keep all 6%.

There are independent real-estate brokers who do not belong to the MLS service who often charge smaller percentage commissions or, in some cases, a flat fee, for selling a property, but for the seller, the disadvantage is that there is less exposure since fewer prospective buyers will get to see the property (MLS brokers will not show or attempt to sell the property). In the rare case when two independent brokers (buyer's broker and seller's broker) are involved in the sale, then the buyer's broker will expect his/her fee to be paid by the buyer separately from the real estate transaction; it is unlikely that the selling broker will part with any part of his/her commission to the buyer's broker. For the question asked: What if I find the property myself instead of through an MLS broker or another independent broker? Well then, you have effectively hired the listing broker (whether MLS or non-MLS) as your broker too, and the listing broker gets the entire commission, whether it is 6% or 4% or 3% or $2500.

Dilip Sarwate
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