In the wake of the ongoing legal controversy involving real estate agent commissions and the National Association of Realtors (NAR), a new survey by Clever Real Estate found many Americans were unaware of how agents get paid.
In a nationwide poll of 1,000 adults, Clever found that 66% of non-homeowners and 42% of home sellers were unaware that they were expected to pay the buyer’s agent commission. The survey also found 55% of sellers complaining that they should not be obligated to pay the buyer’s agent’s commission.
Also, the survey found fewer than half of sellers (46%) knew how much they’ll end up paying in commissions, and 34% overestimated the cost of commissions. Nearly all of the homeowners in the survey (91%) considered avoiding high realtor commission rates an important priority when selling, with 28% of sellers choosing to forgo an agent to save on fees. But on the flip side, 72% of sellers who worked with an agent believed a good agent was worth every penny of their commission.
“Clever has negotiated more commissions with realtors than any other person or organization in the U.S.,” Clever Co-Founder and CEO Luke Babich said. “With recent headlines following the decision in the lawsuit against the NAR, Clever remains committed to helping buyers and sellers receive the best service with the lowest rates and continuing to position ourselves as a thought leader on the topic of commissions.”
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BS it is disclosed in the listing agreement
The 55% of sellers who complain that they shouldn’t be obligated to pay the buyers agent’s firm a fee — don’t have to…
…they can sell their own home. It’s called a FSBO.
When they do want a REALTOR®️ the amount that they pay in commission is fully disclosed and broken down for them.
The average real estate agent probably earns less money than their seller — and often works nights and weekends — and takes all of the risks (showing properties, holding open houses, and doing research, even when there ends up being no sale).
It is BS. Every single person that sells through an agency signs a Listing agreement that details all of this. This is all a BS argument, and it will get clearer if we just pull our data from all these freeloaders. The NAR should pull all the data off the free market. FSBO’s website was Craigslist before websites like Zillow. It was awful. Everyone knows that if you have been in the business long enough. Everyone is paying for realtor buying/selling data. All that expensive data is then populated for free by sites like Zillow/realtor.com, Trulia, Homesnap/Homes.com, Redfin giving a false sense of confidence to the FISBO crowd. All thinking Agents are not worth their time. Some agents give everyone a bad name. That is the fact of any given business. Giving this data out was the dumbest thing the NAR ever did. Still cannot believe we are having these conversations. I hope they get what they want, and the business shuts down. All the data will be kept by the largest real estate firms. You will all still find a way to complain about it. Good luck.
Very Clever, Clever using this article for advertising your firm.
Unfortunately, your firm doesn’t read the listing agreement or the estimated net sheet that the sellers are required to read and sign which clearly states the amount of commission they are to pay the listing broker, and it explains that the commission will be shared with the buyers agents broker. All commissions are negotiable. Nothing is written in stone whether you negotiate 5%, 6%, 7% commission or a 2% commission. It is discussed and confirmed with the seller before the listing agreement is written up. Your article is erroneous and reflects that the public is stupid and makes it look like realtors are ripping off the public.
Realtors make amazingly 3% or less commission while lawyers make 33% commission or more. It is the same lawyers that are bringing these lawsuits, making millions of dollars. I think this article is BS.
I’m a Managing Qualifying Broker and its always disclosed in the Listing Agreement. In addition, technically speaking, the Seller is paying their Listing Broker, and that Broker is paying the Buyer’s Broker for bringing a Buyer to them. The payment is identified through the MLS that both Brokers are Members of, or covered by a separate Broker to Broker Agreement when the offer is made. In some States a Broker can handle both sides, and in that instance the Seller’s Broker gets the entire commission. If the Seller were, in fact, paying the Buyers Broker the Seller should get half of the commission returned, but that’s not what happens. In some instances a Broker that handles both sides of the deal rebates a portion of the commission to the Seller, but that’s also in the Listing Agreement.
As an agent for approaching fifty years, I question the percentage of sellers indicating they were unaware of the listing agent commissions being shared with buyers agent as it is clearly stated on the listing contract .
Did they sign a contract without reading it? The answer is appears obvious.
Absolutely ridiculous. Everything is disclosed. I don’t understand why realtors do not pull all the MLS information from all the free websites. They just see no value in what we do. We should take away all the freebies. Otherwise it’ll end up being a giant rental market.
So agree. Good qualified agents do their work to inform their clients.
My thoughts as well. Something weird here.
If your clients do not know who pays the commissions, the agent is not doing their job.
If your clients do not know who pays the commissions, the agent is not doing their job.
I never believed that the commission was anything more than a marketing tool, that compensated Realtors for their time and expertise. It was up to the Broker and listing agent to allocate a portion as a marketing fee for a Buyer’s agent to assist with the sale, by bringing a qualified Buyer. The commission was used to advertise and highlight the features and improvements to peak a Buyers interest and meet most of their criteria. After 45 years in real estate the average was 6%, but it was always negotiable. Good Realtors maintained the expertise to assist the Seller develop the best market price based on market conditions and the home’s conditions.
This calling it a Buyers commission is only going to benefit Venture capitalist, who have deep pockets. The average Buyer struggles to make the down payment and closing costs. This will place an undue burden on first time homebuyers or anyone that needs a mortgage. It will kill the American dream for most home Buyers. In my opinion the only benefactor in this reclassification is cash Buyer’s or Venture Capitalists.
I am sadden for Buyers and Sellers. In my opinion, the future of Real Estate will be deeply hampered and the future will prove it was a bonus for the elites.
So true
Sorry Clever . . . Using a article about the ridiculous nonsense resulting from the recent NAR lawsuit as a vehicle to advertise the ethical superiority of your company doesn’t set well with me – smacks of blatant opportunism. And BTW, your numbers are a far cry from the official polls taken by NAR. If I believed anything in this article, I would have to conclude that about half the country is too stupid to read a listing agreement or to inquire how much they will pay for an agent’s services. I’ve never had a single listing client sign a listing agreement without knowing EXACTLY WHAT THEY WILL PAY AT CLOSING. Oh, and BTW (again), I obtained my first RE license in 1979, so let’s just say I’ve been at this for a few years.
Sorry Clever . . . Using a article about the ridiculous nonsense resulting from the recent NAR lawsuit as a vehicle to advertise the ethical superiority of your company doesn’t set well with me – smacks of blatant opportunism. And BTW, your numbers are a far cry from the official polls taken by NAR. If I believed anything in this article, I would have to conclude that about half the country is too stupid to read a listing agreement or to inquire how much they will pay for an agent’s services. I’ve never had a single listing client sign a listing agreement without knowing EXACTLY WHAT THEY WILL PAY AT CLOSING. Oh, and BTW (again), I obtained my first RE license in 1979, so let’s just say I’ve been at this for a few years.
I guess their agents did not explain the listing agreement they signed that MUST disclose the entire amount of commission that would pay on the sale. And the percentage of commission that would be paid to or split with ”cooperating agents” . Also known as buyers agents.Or many times the procuring cause of a sale. In Texas, unless they are acting as appointed intermediaries, they are committing dual agency, which is against the law. They cannot say they are representing both parties. Ask those 42% how they would feel knowing that when they buy their next property they may not have ANY representation. Roulette.
As an active agent of nearly fifty years I question the survey results as the listing contract clearly states the disposition of the seller paid commission.
Apparently those respondents chose to ignore that verbiage.
I would like to know the number of sellers that took this survey as well as which states the survey was conducted to accumulate this data. Please provide.
the advent of buyer brokerage was made on the seller only has a commodity.
the buyer brings the pile of cash to the closing table
so since buyers felt it was their money , they wanted representation.
and rightfully so, they deserved representation.
the crux of the matter is NO ONE wants to pay realtors for their service.
so technically the sellers did not pay the buyers agents
since there is no inventory , sales happen quickly. so everyone thinks we are overpaid. no one considers the years of experience it takes to become a great realtor. and manage these transactions. it is not easy picking the strongest deal or getting your deal picked. or the years, monies we have spent building these MLS systems , forms to protect buyers and sellers from eroneous information.
Is this a news story, or an ad for Clever?
Spot on
Exactly
Once the forensics of fee based payments start to apply to not just Real Estate agents but, Doctors, Lawyers, etc. One might expect some more revelations about who actually pays what. Speaking of lawyers , I’ve never quite understood the “customary 1/3rd of the settlement “ norm that seems to apply. How was that decided ? I think a good examination of fees paid in several industries could result in much the same conclusion.
If Buyers(Clients ) are obliged to pay for representation, the good agents will get paid fairly and the rest will probably also get “what they paid for”!
Sellers didn’t pay it. Their agent did.
In reality, the Buyer is paying the commission for both sides of the transaction. The commission is “baked” into the sales price.
Originally the listing agent and selling agent represented the seller and the seller paid both commissions via the listing. When buyer’s agency arrived, the buyers are represented by their buyer’s agent but yet the seller still pays the buyer’s agent. I can certainly see why the seller has a problem paying the agent who is working to get the buyer better terms and conditions.
Only that is not how it works. The seller pays the commission to the listing brokerage. That brokerage pays the listing agent a fee. In turn, the listing brokerage choses to pay , at closing, the brokerage of the buyer’s agent a fee for bringing a ready, willing, and able buyer. The buyer’s agent is paid by their brokerage.
Roger Reid Said it well! As a Buyers Rep with decades of experience, this whole issue of fair and adequate commissions for services rendered is counterproductive to all parties. Total services needed to be effective, honest, and sustainable have already been vetted by the marketplace.
If sellers don’t READ the listing agreement that they sign, then that is their own problem. The commission(s) are clearly spelled out. I don’t buy the lame excuses. Real estate agents earn their commissions just like other hard working professionals. Sellers can sell by owner if they don’t value the services of real estate agents.
My experience with Clever is that they have a play on words that really benefits them not the seller or the buyer. Their cheap we cheat them and how commission structure is a joke. Beware!
In reality, the Buyer is paying the commission for both sides of the transaction. The commission is “baked” into the sales price.
I would like to see a copy of the survey. As we know, the way in which questions are asked can give us misleading results.
Also, speaking for NC, the amounts are listed on each listing agreement and is typically discussed with sellers when the documents are signed. This whole law suit makes no sense to me.