Real Estate Agents Should Work For Free
Yeah, you read that right. I came across a listing in the Multiple Listing Service today where the commission to the Buyer Broker, often referred to as BB on an agent full report was 0%-$1000. The same commission compensation amount was printed in the TB and SB section on the MLS, which stands for Transaction Broker and Sub-Broker or sub-agency. I was within a word: pissed.
I worked three months with a young couple helping them to find their first home and to read that my compensation for my time and expertise would be nil or close to nil after I pay my broker, I was simply not motivated to go out of my way to show them the house, let alone help them to negotiate an offer, home inspection and so forth.
Yes, I know the buyer can make up for the lack of commission and pay me directly, but generally when a listing is entered into the MLS, the listing agent negotiates a commission with the seller of which a portion goes to a Buyer’s Broker in the event a Buyer’s Broker procures a willing and able buyer.
Well, I am in the business of procuring willing and able buyers and my compensation matters. My clients ultimately choose what house they would like to see, as it is my responsibility to show them all of their options but to read that there is a possability that I was not going to get paid at the settle table was and still is insulting to me. (That’s lower than a Foxton’s commission and they went out of business).
Why would the MLS allow a listing to put in with 0% as compensation? It just doesn’t make sense to me. So of course, I called the listing agent and asked if he/she would explain why the commission was so low. He/she explained that it was what he/she was told to do per the bank. Oh, yeah. It’s a bank owned property, which means closing on the house may be difficult. Excuse me. It will be difficult.
Just when I thought I have seen it all, the real estate business never seizes me to amaze me. I was going to show you a screenshot of the listing information, but my fiance advised me against it for even if I whited out which broker listed the home and their contact information, it would not be appropriate to show. If you come across the listing in your search, you will feel my pain.
Low commission payouts should not influence an agent’s fidicary duty to show a home a client is interested in seeing, but I remember when Foxton’s was in business. They often paid out 1% to a buyer’s broker. Many real estate agent went out of their way to show other homes i.e.non-Foxtons listings.
Morale of the story is low commissions can affect a property’s marketability. If you are looking to sell your home fast, if you take away from the people who are bring you buyers, you stand to lose more than what you hope to save.
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