Industry News

Real estate commission splits cross legal line

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Real estate professionals cite growth in discounters and real estate technologies, a booming real estate market and an increase in competition among brokers as being among the contributors to a surge in low commissions and uneven commission-sharing in some markets. Uneven splits are an aspect of the changing structure of commissions in real estate, with the traditional but unofficial 6 percent commission shared by listing agent and buy-side agent sinking to a low of about 5.12 percent in 2002 and 2003, according to industry research by Real Trends. The results of an informal Inman News survey on uneven commission splits, tallied today, found that 77 percent of respondents see "a growing practice of uneven commission splits between listing agents and buyers' agents." While uneven splits in commissions between the buy-side and listing-side brokers are legal, the manner in which these splits are implemented can make them illegal. Also, Realtors have a professional responsibility to disc...