Divorced Commissons, Greg Swann Style

While Greg and I don’t agree on a lot of things (I think the National Association of Realtors may be worth saving, he holds a special vitriol for them), one thing we share is a passion for having buyers pay their buyer representatives.

With that premise, check out his new e-book (it’s a PDF) –

Buyers need to start asking better questions – nothing is free.

Why do sellers pay the buyer’s agent’s commission, with or without sub-agency? Because it works. Buyers get to look at houses “for free.” The agent will set up searches “for free,” driving the buyers from house to house “for free.” And when it comes time to write a contract, the more the buyers pay for the home, the more the buyer’s agent will get paid. The seller is paying a percentage of the sales price, so the buyer’s agent’s pecuniary interest is aligned with that of the seller, not the buyers, his nominal clients. But — what the heck? — it’s all being done “for free.”


This is important. Divorcing the commissions — the buyer pays the buyer’s agent, the seller
pays the listing agent — is potentially the most significant reform that can be made today in
residential real estate.

It’s a novel concept: rather than have the buyer’s agent (and buyer) obligated to be paid whatever the seller may be offering, in the divorced commission model the buyer pays the buyer’s agent. Crazy, huh?

A Call for an End to Cooperative Compensation

The Solution to Many of Real Estate’s Problems

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3 Comments

  1. Pavel Dovgalyuk September 8, 2008 at 21:23

    Thanks for the link to Greg’s e-book. Just finished it. In the end, when he talks about several other reforms – title insurance comes to my mind. How many of the buyers/consumers out there know that a typical real estate attorney pockets something like 60% of the title insurance cost. For example: buyer pays $1,000 at settlement for title insurance – a typical scenario is that the real estate attorney pockets $600 and the actual cost of purchasing insurance is only $400.

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  2. Pingback: Introduction to “A consumer’s guide to the divorced real estate commission” — the eBook | BloodhoundBlog: National real estate marketing and technology blog | Realtors and real estate, mortgages, lending, investments

  3. Pingback: Short Sales in Charlottesville - What Realtors (and Consumers) Need to Know | Real Central VA

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