50/50 Split

When listing their home for sale, the only commission number sellers typically pay attention to is the “gross commission” charged by the listing agent. One broker may charge a little more, another a little less, and that gross commission number can become a huge factor in who a seller lists with.

 But there’s another number on the listing agreement that is equally, if not more, important — the “co-broke” commission (or portion of the gross commission) that the listing broker will offer to another cooperating broker who brings the eventual buyer. Some brokers do offer a 50/50 split but quite a few don’t, only offering a smaller fraction of the gross commission to a cooperating broker.

As a seller, should this matter to you? Absolutely. It is more likely that the buyer for your house will come through a cooperating broker, not your listing broker. In fact, of the 77 single family and condominium sales handled through the NNEREN Multiple Listing Service, during the first half of 2011 in Windham NH, 77% were sold by a brokerage other than the listing broker! (Note: that isn’t another agent in the same company, but an entirely different brokerage company altogether.) So it is important for you as a seller to know what competing sellers (listings) are offering for cobroke fees.

If a seller presses a listing agent on why they aren’t offering an equal commission split, they’re likely to get a laundry list of reasons such as they need to keep a bigger share of the commission because of the costly marketing and adverting they’re going to put behind your property. But unless they’re doing some special niche marketing on your property alone, say advertising a horse property in horse magazines, or an estate in many elite publications, that argument is very hollow.  At Prudential Dinsmore Associates, REALTORS we also invest in marketing and advertising to attract buyers yet we still offer a 50/50 co-broke fee because we feel it is in the best interest of the Seller to do so.

Frankly, given the data and the fact we are in a Buyer’s market, an adequate amount of your commission dollars should be targeted at motivating cooperating brokers to short list, show and sell your house. We would even go so far to venture that, particularly for higher priced properties, a strategy to generate interest among an appropriate group of cooperating agents can be more important than slick advertising. 

 The 50/50 split is not only a great marketing strategy in a buyer’s market it is also a fair way to compensate the sales professional who may be bringing the buyer into the transaction.  Most of all, it is fair to you as a Seller.

The program is very simple. When you list your home with a 5% fee or higher we offer cobroke agents 2.5% fee. Ask the agent to show you the cobroke fees that are being offered on the properties that will be competing with yours and see how a higher cobroke fee would benefit you. 

If you’re getting ready to sell your home please feel free to contact us so we give you all the details of our 50/50 cobroke split plan and how it could benfit you in getting your home shown and sold.  Contact us at prudinsmore@att.net