Do Agents "split" commission ?

Morning all,

As a prospective purchaser, may I ask If a property is up for sale with 2 agents, do the agents "split" the commission once the property is sold or is it the agent who sold the property ?

Many thanks

Hello Ambre Solaire,

Yes... the trend is to "split" the commission...... as times are not like they used to be, ANY client, no matter if it is in the area of influence or not is attended by the original agency " you contacted with and they share the commission, that´s why most of the times there is an "introducer" from the listing agency.  This works quite ethicaly between the agents according to rules and regulations and things ussually go 3 ways when there is a special property that ONLY one agent has in the books.... so 3 agencies will "collaborate on this regard".

There is also a IN ( Intergagency Network) which sort of "links" the different databases of a lot of agents so we, in the system can see what they have listed on their books and we make the joint sale.... in this case.... the "splitting" goes as follows..

55% of the commission goes to the agent that sold the property

45% of the commission goes to the agent that listed the propperty

5% of the commission goes to the IN.

In spite of what has been said, commissions are normally 5%..... you are very lucky to find properties listed at 7,5% nowadays..... previously, all properties trough the IN were 7,5% commision but since some time ago..... barelly 5% ( if you are lucky).

I hope I´ve been useful for you.

Juan.

Hi Juan

Many thanks for your detailed response !  One final question if I may,  if a property that is up for sale with an estate agent is sold via a Corredor (? spell)  am I right in thinking that the agent will not receive any commission ?  We are talking about small inland village agents

Many thanks

Ambre

Juan, we all know that agents fees are daylight robbery, but:

55% of the commission goes to the agent that sold the property

45% of the commission goes to the agent that listed the propperty

5% of the commission goes to the IN.

Whether the commission is 5% or 7.5%, please don't tell me we now have to pay 105% of that fee????!!!!!

"Many thanks for your detailed response !  One final question if I may,  if a property that is up for sale with an estate agent is sold via a Corredor (? spell)  am I right in thinking that the agent will not receive any commission ?  We are talking about small inland village agents"

The spell for "corredor" is correct.... but first define "corredor" , for me is a very local man, who has the confidence and trust of the country property owner.... I have very good relationships with some of them in order to opertae inland and into the country....  Okey, If the property s listed by a local agent, most probably is been reffered by the "corredor" which normally receives some 30% of the commission generated as a reward to make sure that the deal will go trough as country people tend to close onto themselves and only will trust you if accompanied by "someone they know".

We are obviously talking here of a property that was for sale with an agent and also with a corredor... if this one makes the sale.... then nothing should go to the agent unless he provided the purchaser, the expensive & complicated  logistic work that represents to "bring a client" from abroad.  If there is any dispute..... it would be ( unless collaboration agreements signed first) of the will of the selller ( the one that pays the commission).  But if the corredor made the sale, from begining to end.... then the agent should acept defeat and fight another battle. Also.... sometimes a client comes with an agent.. is introduced to the "corredor" and then forgets the agent..... thinking they will pay less...... but that "team" corredor-agent ( who normally does not speak English) will certanily not longer row again in the same boat..... actually, that´s exactly how you build long term relationships among the industry and then you know "who to deal with"...

Juan.

Juan, we all know that agents fees are daylight robbery, but:

55% of the commission goes to the agent that sold the property

45% of the commission goes to the agent that listed the propperty

5% of the commission goes to the IN.

Whether the commission is 5% or 7.5%, please don't tell me we now have to pay 105% of that fee????!!!!! "

Excuse me Roberto but I do not understand your post.... but let me give you an example...

Property sold: Price: € 200,000.-  > Comision to be split 5%= 10,000.-

55% = 5500 To the selling agent         45% to the Listing agent        5% to the IN ( Interagency Network)  Why 105% ?  All IVA goes straight to the "Taxman"... not to any agent.

www.theinnetwork.com

This IN Network, "interconects" the data bases of properties of many- many agents...... so you make a search ( is like google but for properties for sale) and then you have to make contact with the listing agent to assure acces to the property.

Now, this IN systems was copied by Viva from the "Interstate" of Interealty when they were born, but they "opened it" to all the agents....... before ( in 2004) there was a minimum of 7,5% commission..... but when I started to use it again last year..... there were more propperties at 5% than 7,5%....... actually, it is difficcult to find properties with more than 5% and if so....6%.... last year.... and VIVA listings dissapeared from the IN I guess because of the 2% ( ji.ji...) schemme.

So, let´s imagine.. a sale... price € 200,000.- 5% comision = 10,000.- ( +VAT)

5,500 goes to agent who produced the client.

4,500 goes to the agent that listed the property

500    goes to the IN System ( who placed the info arranged for us), obviously "fed" by the members of the system.

plus the VAT that goes to "Hacienda" ( Inland revenue service).

I hope this clarifies for you so you have at least an explanation from an agent...... daylight robbery.... that is your impression...... if you think it is so easy, you are welcome to join the business unemployment figures are on your side....... there is a lot of work out there.

Cheers,

Juan.

Juan, please believe me, no offence was intended, perhaps you misunderstand my "teasing". I am well aware that you are a hard working, professional and respected businessman, and I would not dare to suggest otherwise. I was only joking.

You explained as follows:

So, let´s imagine.. a sale... price € 200,000.- 5% comision = 10,000.- ( +VAT)

5,500 goes to agent who produced the client.

4,500 goes to the agent that listed the property

500    goes to the IN System

Correct me if I am wrong (or mad) but this adds up to 10,500, i.e 105% of the agreed commission of 10,000.

I know there is often confusion about whether the agents commission of 5% is added to the sellers desired price, or deducted from the price at which the property is offered for sale. For example, in your example above, you have charged 5% of the sale price, resulting in a net figure for the seller of 190,000. (ignoring IVA for the sake of convenience) But if the seller came to you with a desired net sale price of 190,000 and you added 5% on as your fee, the property would be offered for sale at 199,500. Perhaps this explains where the "extra" 500 came from?

Sorry Roberto,

I posted on the run.... but is it clear that the comission split? when a deal through a property listed through the IN,

55% to the agent that nourished the client until bringing him / her in.

45% of the commission to Listing agent,

and 5 % to the IN

so 55+45+5= 100 ( % of the commission) then you make the calculations please.... I´m on leave.....

Believe me that with the cost involved to generate a genuine lead, one that will generate a tour with the clients involves a lot of work of a large team... 5 % is sometimes insuficient,

This very IN creates an enormous sinergy and collaboration inter-agencies but make everytour a logistic nightmare involving three people meeting at a tight scheddule....... but there is a rules an regulations code that makes every transaction cristal clear.

Cheers and good night..... I am wasted, another long day with the responsability of an English family onboard the car and vistited several properties.

Juan.

Juan

Many thanks once again for your detailed response.

Regards

Ambre

Hi Guys, just to add another slant to this. I am an independant agent, we list and sell properties for 2.5% (plus 16%) and tend to work direct listing to direct buyer.

However we do work with other small agents. We cannot afford to split the commission so the other agent adds theirs on top - we restrict this to 2.5% as well.

Therefore we have supplied the property and they have supplied the buyer. The oner still receives his `net`amount

If the property is also listed with another agent, that agent does not get paid, this is because the owner came directly to us. Owners can register their property with several agents at the same time, but this does not mean all the agents get paid on a sale.

Hope this helps as well