Dept of Justice Looking into Realtor Commission Searches
This may sound weird, but just tune into the show and it will make sense.
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Government Agencies, Real Estate News
Dept of Justice Looking into Realtor Commission Searches
admin - Monday June 3, 2019
First, I had no idea that you could search for listings by the commission paid. You can but you can’t put in a minimum or a range, you can only put in either an exact amount or a starting number.
I’m thinking that there must be some complaining coming not from REALTORS® but from companies like Redfin, REXhomes.com and a bunch of other “discount” brokerages that promise great results but cut the buyer’s agent commission or even eliminate it altogether (REXhomes).
And guess what? The discount brokerages die due to agents not showing or writing up offers (in their opinions).
That is just not the case. I show these properties and they typically have one thing in common. A know-it-all seller that over prices the listing does not prepare it right and calls all the shots including putting his phone number in the MLS.
Basically, you are dealing with a For Sale By Owner and frankly, agents want to work with agents more often than they want to deal with a FSBO.
Sorry guys, but a lot of you have this commission think wrong. There is nothing wrong with setting your own fee for buyer services. It should be memorialized in your buyer agreement and not variable depending on what a listing agent happens to be offering as a co-op. However, you should always show any and all properties that match your buyer’s search criteria, regardless of commission. If your buyer wants to buy one of those properties, then you write into the offer, that the Seller pays your full commission, as a benefit to your buyer. If the seller won’t pay the difference, then your buyer should. One person commented they would “never try to collect more commission from their buyer.” I would never refuse to show a property to my buyer, that fits their criteria. But that doesn’t mean that I am required or obligated to accept less than my going rate if the deal closes.
What if the co-op is $1? We don’t work for free or for charity. We need to rethink how commissions work, who should pay them, and what our own worth is. There are solutions that fit each situation if we are honest, ethical, and busines-like in our approach.
I think this lawsuit and complaints come from home owners who list with discount brokerages and feel that the realtor community won’t show their homes. In Utah there have been some homeowners file lawsuits because they feel they were singled out. They have run several stories about this issue on the local news. I think they would have a hard time proving that an agent didn’t show a home based on the commission. I like most agents set up searches for my clients and don’t ever select the commission offered. As an agent I have sold homes that have different commission rates. I always have the right to ask the listing agent to increase the commission, but would never make that contingent on me writing the offer for my buyer. In our MLS we have all different commission rates. I think it is a decision for the buyer and the buyers agent to determine how the difference in the commission is made up, based on the buyer broker agreement. Discount brokerages are not new to the market and they have there place for some sellers and buyers. Most of them don’t survive very long, because they soon realize that they can’t survive on the discounted model and give the kind of service and marketing that most sellers demand. It’s funny the justice department is investigating others for corruption and they have proven to be one of the most corrupt organizations in the government. Maybe they should clean their own house before trying to clean up others!