Dane County Co-Broke Commission Rates.

Many home sellers have a vague sense of how commissions work within the Realtor and MLS structure. If you utilize the services of a broker to list your property you agree to pay that broker a commission in the event they procure a buyer that leads to a sale.

The listing contract is between the seller and the broker. The listing broker will then in turn offer a co-broke commission to all MLS participants in order to induce them to use their efforts to effect a sale by presenting the listed property to their buyer clients. The listing broker is acting as a contractual bridge between the seller and the entire realtor community. The listing agreement is a bilateral contract in which the seller agrees to pay a commission and the listing broker agrees to perform certain marketing functions. The offer of the commission in MLS represents a unilateral offer from the listing broker to all MLS participating brokers. A participating broker may form a contract with the listing broker by performing the terms of the unilateral offer, i.e. by finding a buyer ready, willing, and able to buy according to the sellers criteria.

As a seller, it is important to have information regarding local market commission trends to understand what represents a competitive co-broke commission rate. In Dane county and metro Madison, 3% is, by far, the most common co-broke commission rate offered within MLS. The chart below demonstrates the popularity of the 3% co-broke. 88% of the active single family home listings in Dane county as of 03/01/09 contained a co-broke commission of 3%. There were a few below and a few above the 3% rate.

Active Single Family Home Listings in Dane County as of 03/01/09

The realtor code of ethics contains a relatively new requirement that brokers inform their seller client what they will offer in MLS as cooperative compensation. If you had a listing contract with a broker charging a 6% commission, the broker could offer, say, 2% in MLS. This could put your listing at a disadvantage on a commission basis. Also, if you listed your home with a broker who was charging only 5% but was offering 3% in MLS, you would not be at a disadvantage in terms of the MLS offer of compensation.

With our $295 flat fee MLS service we will offer the co-broke commission that our sellers want but we advise that 3% is the most common and is most likely to provide a competitive level of incentive for a broker working with a buyer.