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Seller Commission Reduction (Ontario)

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Commercial Real Estate Agent with RE/MAX West Realty Inc., Brokerage (Toronto)

Seller Commission Reduction

 

Question:

A property is listed for sale and offers co-operating agents X.5% plus HST.The Co-Operating Brokerage submits and offer reflecting the X.5%

The Listing Brokerage without any discussion or correspondence about the offer and/or the commission sends back a counter offer. The Sellers and their agent have stroked out "X.5% as per MLS Listing" and inserted a proposal of only "X%" (or .5% less).

The Buyers are happy with the signback and accept the offer.

Neither the Buyers nor the Co-Operating Agent will agree to the amount that is less than the MLS offering and refuse to sign the altered co-op.

We have a deal, but we don't have a fully signed Confirmation of Co-Op.

How does this affect the commission?

 

 Answer:

The Seller has no right to negotiate the Co-operating Brokerage’s commission.

Only the Listing Brokerage can do that, and now it’s too late. The Listing Agent would have had to change the commission offered on the MLS before the Offer

So, the CCR comes back altered, don’t agree to it; don’t initial the change. At best, simply say: “I’ll have to take that under advisement”.

Comments (4)

Bob "RealMan" Timm
Ward County Notary Services - Minot, ND
Owner of Ward Co Notary Services retired RE Broker

Are you saying that your offers to purchase state the brokerages commisions on them? I've never heard of the Buyers and Sellers seeing that cut on an OTP Brian Madigan 

Feb 09, 2017 05:35 PM
Brian Madigan
RE/MAX West Realty Inc., Brokerage (Toronto) - Toronto, ON
LL.B., Broker

Yes, we have a separate document called a "Confirmation of Co-operation and Representation", or "CCR".

The commission offered to the Buyer's agent is disclosed and both the Seller and the Buyer as well as the two Brokerages sign it.

Feb 09, 2017 05:48 PM
Gloria Valvasori, Accredited Senior Agent
BETTER HOMES AND GARDENS REAL ESTATE SIGNATURE SERVICE - Mississauga, ON
REAL Experience | REAL Commitment | REAL Results!

I've been in that situation a couple of times when representing the Buyer, but I did not agree to the change on the CCR .  Also when some lising agents offer "x.5% - $XXX.00 Markting Fees" to the cooperating Brokers on their listing and I am presenting an offer on that listing, I write in my CCR "x.5% + $XXX.00 Buyer Procurement Fees."

Feb 09, 2017 08:01 PM
Brian Madigan
RE/MAX West Realty Inc., Brokerage (Toronto) - Toronto, ON
LL.B., Broker

Smart, very smart

Feb 10, 2017 06:54 AM