a good real estate agent

[Copanut]

Listing agent, his broker, selling agent, her broker.

[ferraris]

Originally Posted by Copanut

Listing agent, his broker, selling agent, her broker.

Hmmm. I just had a look at my HUD 1 document, lines 700 - 705 and now I'm even more confused.

700. Total Real Estate Broker Fees: $3,000
701. $1,500 to Seller's Broker
702. $1,500 to Buyer's Broker
703. Comission Paid at Settlement. $0 from buyer's funds. $2,500 from seller's funds
704. Additional Broker Commission to Seller's Broker: $125 from seller's funds
705. Additional Brokerage Commission to Buyer's Broker: $500 from buyer's funds

I guess had mistakenly interpreted line 705 as a separate fee to the broker, and assumed all $1,500 from line 702 had gone to my agent. It doesn't actually detail how they split it up, since everything is listed as going to the broker. And don't even ask me where the extra $125 came from; at least it wasn't from my side of the transaction.

[selltheburgh]

Originally Posted by ferrarisnowday

Hmmm. I just had a look at my HUD 1 document, lines 700 - 705 and now I'm even more confused.

700. Total Real Estate Broker Fees: $3,000
701. $1,500 to Seller's Broker
702. $1,500 to Buyer's Broker
703. Comission Paid at Settlement. $0 from buyer's funds. $2,500 from seller's funds
704. Additional Broker Commission to Seller's Broker: $125 from seller's funds
705. Additional Brokerage Commission to Buyer's Broker: $500 from buyer's funds

I guess had mistakenly interpreted line 705 as a separate fee to the broker, and assumed all $1,500 from line 702 had gone to my agent. It doesn't actually detail how they split it up, since everything is listed as going to the broker. And don't even ask me where the extra $125 came from; at least it wasn't from my side of the transaction.

Line 703 is what confuses most people. You likely paid $500 for your good faith deposit. Since the broker was holding $500, they couldn't collect the full $3,000. Instead, they keep that and collect $2500 more.

The additional $125 and $500 are fees agreed upon ahead of time.

Buyer's broker took in $2,000. Seller's broker took in $1625.

The broker aka realty company has an agreement with the agent with how much they make of that $2000 or $1625. Often it is 50/50 but higher producing agents might have a better split, depending on the situation or the company.

So the buyer's agent likely walked with $1,000 but then has to pay the MLS for the transaction, which is $50. They had gas, wear and tear on their car, MLS membership fees, Realtor's annual fees, Lockbox key pad rental, E&O insurance, health insurance, etc.

At the end of the day, a full time agent would have made about about $750 and a part time agent would be at about $500 after expenses, etc. Then there's taxes, which all people pay, but not everybody pays self employment tax, which is an additional 13% taken from that $750 or $500, not counting state, fed, and local income taxes.

[ferraris]

Thanks, selltheburgh; you're correct about the $500 hand money. So the fees on line 704 and 705 are just extra fees in addition to the commission? I was made aware of the $500 before the closing, but perhaps it's something I should have contested? I wish I could remember more details about it now. I was told it was a standard fee, but it may have been a standard fee only for commissions below a certain amount.

Also, it sounds like there is no way to figure out the broker/agent split from the HUD 1 statement, correct?

It's easy to see why an agent wouldn't be interested in low budget buyers. Have you ever heard of anybody getting around it buy offering a larger commission percentage, flat rate commission, or flat rate per house showing? Would brokers even allow such an arrangement.

[selltheburgh]

Originally Posted by ferrarisnowday

Thanks, selltheburgh; you're correct about the $500 hand money. So the fees on line 704 and 705 are just extra fees in addition to the commission? I was made aware of the $500 before the closing, but perhaps it's something I should have contested? I wish I could remember more details about it now. I was told it was a standard fee, but it may have been a standard fee only for commissions below a certain amount.

Also, it sounds like there is no way to figure out the broker/agent split from the HUD 1 statement, correct?

It's easy to see why an agent wouldn't be interested in low budget buyers. Have you ever heard of anybody getting around it buy offering a larger commission percentage, flat rate commission, or flat rate per house showing? Would brokers even allow such an arrangement.

Nobody knows the agent broker split except for the agents and their broker - it is part of their contract. Most have a standard 50/50 with some bonuses at the end of the year...while some have a graduated scale.

Some companies like Remax charge the agents a desk fee of 12-25k per year to work there and they get an 85-95% split. It can be lucrative if they do well, but very costly if they don't.

As for the additional fee, pretty much all companies charge it. Some charge $195. One charges $225. A few charge $500.