Would someone explain this commission stuff? (buyer's agent, agreement, listing, seller)

[gentlearts]

My husband and I are in disagreement about the fees on our RE contract.. Of course, we should have asked our agent at the time, but we didn't.
Under Broker's Fee, it says 6% on the first $100,000. and 4% on balance.
Under Buyer Agency it says 3%/2% on balance.
My husband thinks this means between our agent and buyer's agent we have to pay 9%/6%.
I say it means if there is no buyers agent we pay 6%/4% and if there's a buyers agent then their fee comes out of our agent's splitting it.

Which is right?

[Mike Peterson]

The 6% should be total commission on the first $100,000, anything above that would be 4% commission.

From the 6% the buyers agent would get half or the 3% and from the 4% they would get half or 2%.

[gbone]

Originally Posted by gentlearts

My husband and I are in disagreement about the fees on our RE contract.. Of course, we should have asked our agent at the time, but we didn't.
Under Broker's Fee, it says 6% on the first $100,000. and 4% on balance.
Under Buyer Agency it says 3%/2% on balance.
My husband thinks this means between our agent and buyer's agent we have to pay 9%/6%.
I say it means if there is no buyers agent we pay 6%/4% and if there's a buyers agent then their fee comes out of our agent's splitting it.

Which is right?

This will be an educated guess without having seen the contract. The Buyer Agency fee usually comes out of the Seller Agency fee. Therefore, on the first 100k the Selling Agent would get 6% and he would split that(3% to each agent) with the Buyer Agent. On the 4% on balance, the Seller Agent would get 4% and he would split that(2% to each agent) with the Buyer Agent. That's how it would work in my area.
If there is no Buyer Agent involved then the 6%/4% would all go to the Seller Agent unless something else is negotiated with you.

[gentlearts]

Thanks, all. I love being right.

[gbone]

Originally Posted by gentlearts

Thanks, all. I love being right.

Just tell your husband you saved him 3%, take your cut of the savings, and go buy something you've wanted for a while

[AONE]

Well tell your husband he has great taste. You are right and your final rate will end up being less than 6% as long as the house is more than 100k. The listing agent is splitting the paid fee 50/50 with any cooperating agents. Good luck.

[Rakin]

Hopefully the buyer's agent split is what is standard for the market or you may have a lot fewer showings.