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r/RealEstate
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13
Posted byu/[deleted]2 months ago

Am I Paying My Mother a Commission Fee?

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53 comments
81% Upvoted
level 1

Your mom is an asshole. I would not work with her at all

119
level 2

Never mix Family with business. I paid my wife's grandma a referral fee just so she felt involved, and I didn't have to use her as my primary realtor. Too many opportunities for hard feelings.

14
level 1

My kids and nieces and nephews use me or I get a 25% referral from their agent for them, then I put it in as a credit towards closing costs.

I cannot imagine making a profit off of family.

16
level 1

You need not do your mom the favor of using her as a realtor and giving her the commission; she’s sure not doing you any favors by pressuring you to use her but not reducing that commission.

50
level 1

Your mom is scamming you.

14
level 1

depends on where you are, but often commissions are paid by the sellers / listers, and split between the two agents. Some buyers agents try to get additional commitments from buyers, but you would typically have to sign an agreement with her. She seems to be angling for you to be a customer, and for you to go through her vs. direct or someone else.

Chances are, if your mother uses her license, she may have to pay her brokerage for any deal she is a party to. But frankly, as your mother, she should either eat that cost or let you pay her actual, which is likely less than the 1 month. Think about it, on a 1 year lease, just paying her commission raises your cost 8%.

If you have to pay market price, frankly, it isn't worth working with family. It only introduces drama and fights and judgement. Perhaps this is more r/relationship_advice than r/realestate.

8
level 2

And the listing agent? He needs to pay all of this upfront so the Landlord and Listing agent get paid as well. If he pays her, he still needs to pay first, last and security.

2
level 1

Find a different mom and things will go more smoothly.

3
level 1

Thanks for the input so far, everyone.

I have an additional question. I found the listing on a site called the Garden State Multiple Listing Service. I see that the consensus is that my mother is taking advantage. But could it be that what she is saying is commission is going to the broker/listing agent? I once toured an apartment where the broker informed us that there would be a broker fee.

**edit: further context, I live in New Jersey

6
level 2

Dude/Sis- talk to your mom and ask her these questions

10
level 2
· 2 mo. ago · edited 2 mo. ago

Looks like you are looking in Northern NJ. It is typical for the renter to pay the broker fee in this area as long as it’s not an apartment building. Regardless of who your agent is, even if you don’t use one, you’ll have to pay a broker fee of one month. Unless the listing says no fee.

I honestly don’t think your mom is taking advantage of you. Think of it this way. Why would you pay someone else the money when you can keep it in the family? On the flip side, if you had a business and your family member or close friends chose to work with a competitor instead of you, how would you feel? As long as your mom is competent realtor, I think it’s better to use your mom to for the reason mentioned and to avoid conflict.

Edit: listing agent and tenants agent split the one month fee. If you don’t have an agent, the listing agent gets the full month. Either way you will pay one month fee.

5
level 2
level 2

One apartment I looked at in NJ was through an agent (the one who listed the rental) and there was a broker fee attached to that. I opted to go to a large apartment development because they didn’t have that and also had a move-in special of $500 security deposit.

Since then I have moved out of NJ but have only ever rented from large scale developments because it typically goes like this:

  • Find them online

  • Call them to schedule a time to meet and see the property

  • Pay application fee and apply

  • Get accepted, sign lease, pay security

  • Get keys and move in.

1
level 1

In NYC, northern NJ, Boston, the norm is for the renter to pay 1 months rent as a brokers fee, sometimes 15% of a years rent. The listing broker splits the fee with your renter's broker, usually 50/50. The renter's broker gives part of that back to your agent. This split might be 60/40 for a lower volume agent, with the broker keeping 40%.

If the listing is "no fee" there is no listing broker commission you are responsible for, any commission to your agent is between you two. Many large apartment buildings are no fee, the landlord has onsite staff. If the listing is "owner pays" the landlord pays the listing broker and pays out to your broker/agent.

Commissions in rentals are negotiable. Your agent can waive the commission or rebate it, so you pay half instead for a normal listing. Or you get some money back from an owner pays listing.

Or you could go without an agent, and look for no fee or owner pays listings and apply directly with the listing agent.

Also if your agent didn't explain this all to you they aren't doing a good job. If you are going to use an agent you should talk to a few and pick one you are comfortable with instead.

If you are in southern NJ, or basically anywhere else in the country then usually real estate agents aren't involved with rentals. You are expected to contact the landlord or their property manager directly. There are no brokers fees.

2
level 1
· 2 mo. ago · edited 2 mo. ago

How about being a big boy/girl and talking to your mom directly?

Also, I’d tell my mom straight up that I am expecting to keep the commission or at worst split the commission fee 50/50, or I’m getting a realtor of my own. My mom wouldn’t dream of taking a commission and would probably give me the entire commission to help with expenses. Your mom is kind of an asshole if she takes a full commission.

Bottom line be direct with your mom and talk to her. If she takes a commission of any kind, she’s an ass hole since she’s not doing any real work. I’d personally use a different realtor if my mom were to try and take a full commission.

3
level 2

Your mom is kind of an massive asshole if she takes a full commission.

FTFY.

I'm not particularly close with my parents but I would never take a commission from them.

10
level 2

Not going to go into detail too much but I did mention we don’t have the best relationship. Thanks for your input.

2
level 2

Why would you take your mom's tiny rental commission? If someone makes a commission off me while doing their job I would not expect them to give it to me just because I know them!

-4
level 1

Your mom is a complete sht hole. Wtf.

1
level 1

The seller or landlord typically pays all commissions, not the buyer or renter. There are rare exceptions but it kinda sounds like your mother might be taking advantage of you.

If the landlord isn't willing to pay a commission to an agent then you would typically go to the landlord directly and wouldn't use a realtor for this.

If you agreed to pay your mother that's not illegal or anything but it really sounds like she is taking advantage of you, without more info.

1
level 1

First of all your mom as a realtor doesn't get the commission, her broker gets the commission. Depending upon her contract with her broker she will get a portion of the commission. The owner of the rental sets the commission rates and will pay the brokerage. Typically for a rental the owner will pay a referral fee of 1 months rent to the agent who brings them a renter.

1

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