Without specific commission percentages, I'm going to try to explain the scenario of which I'm speaking. Our market here in Omaha is predominantly a 60/40 split in favor of the listing company. It has been ever since I got in the business in 1986. There are always a few exceptions but that's been the norm for many years.
In our MLS system, we advertise the 'commission split' to the brokers and agents. Let's say our commission is "X%". The "CC" for selling agent payout is published on each listing as "X times .40", thus the 40% split to the selling agent/company.
Our market is also experiencing 'commission-ectomies', just like many others and many companies and agents are now listing property a percent or two lower (X minus 1).
There are some agents in town who are charging a commission of X and advertising a co-broker payout split of 40% of a lesser amount of commission, and thus pocketing the extra half to full percent of the overage.
When I as an agent show a property and write an offer. I understand and accept that whatever is published under the 'CC' payout, I'm agreeing to. I've never once called a listing agent and tried to 'nudge' the split up or try to get a bonus.
I do, however, wonder if these agents are being completely upfront and honest with their sellers and explain to them that they are offering that listing based on an X-1 payout and keeping the difference for themselves. I can't imagine a seller in today's environment agreeing to this practice.
Although I believe this to be completely legal, I personally would never feel comfortable charging X percentage and then paying out the selling broker as if I'd listed it at X-1, or even X-a half. I am always grateful for a hard-working selling agent and certainly want them to get compensated as we customarily always have.
So is this ethical? ...or just plain greedy?
If you are in need of a Realtor in the Omaha area, Bill Swanson has been licensed for over 20 years with CBSHome Real Estate, an affiliate of Berkshire Hathaway.
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