It's Getting Greedy Out There

Real Estate Agent with Coldwell Banker Advantage 195545

Okay, so I know times are getting tight for a lot of agents but I was really blown out of the water recently when an agent called me with what he termed as "a business dilemna".  So he continues on to tell me that he has a buyer who is considering three property offers a 3.5% buyer's agent commission, one offers 3% with a bonus, and mine offers 2.5%.  He says that his buyer intends to make an offer on one of those three properties before the next morning but he wants to know if my seller would be willing to offer a BONUS to him to push the seller's home over the others. fact, you could have heard a pin drop.  So I gather myself up off the floor and say "please tell me that you're not saying that you will push one property over the other based on the amount of compensation you will receive?".  He tells me to just answer the question so I tell him that I will discuss it with my seller and get back to him.

Now before I tell you the rest of the story, I would love to hear how any of you would handle the situation from this point.

Comments (27)

Susan Haughton
Long and Foster REALTORS (703) 470-4545 - Alexandria, VA
Susan & Mindy Team...Honesty. Integrity. Results.

Wow, have I been doing it wrong all this time.  I didn't know we were supposed to PUSH buyers into their decisions.  I thought, apparently naively, that this decision was ultimately the buyers' to make.

Jun 12, 2009 03:20 PM
Monika Depalo
REAL ESTATE Agent/Stager

Talking about commissions to another agent on what they get, etc. I was told is an ethics violation in Florida, check with your state board.

Jun 12, 2009 03:29 PM
Monika Depalo
REAL ESTATE Agent/Stager

Talking about commissions to another agent on what they get, etc. I was told is an ethics violation in Florida, check with your state board.

Jun 12, 2009 03:29 PM
Terrie Leighton
Ferrari-Lund Real Estate - Reno, NV
Reno Real Estate Agent ~ Selling Homes in Reno

And Real Estate Agents have a bad reputations because?!?

The agent does sound a bit unethical, to say the least. I would have said you would talk it over with your seller, your broker, and what the heck, his broker as well. Might as well get the opinion of everyone involved!

Jun 12, 2009 03:37 PM
Wayne Weaver
ERA Team VP Real Estate - Bemus Point, NY

As much as it repulses me, I would have to think about my seller and how bad they needed to sell.  If they were desperate, I may give in and see what I could do to get the home sold.  Of course, after it was over, I would march directly down to the agents office and give them a piece of my mind.  Whether or not it would help, probably not, but it would at least make me feel better.  I can't wait to hear how you handled it

Jun 12, 2009 03:56 PM
Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

I did not have this situation before, so I would  be interested to see how you have handled it.

Jun 12, 2009 04:14 PM
Cris Burlew
Beach & Luxury Realty, Inc. - Saint Pete Beach, FL
Broker ~ St Pete Beach FL Real Estate

From the way you have stated this information...If this agent is putting his interest ahead of the client, it could be a possible violation of Article 1 of the Code Of Ethics. I have taken an agent to task on violating this Article in the past...they lost!

Article 1
When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS® pledge themselves to protect and promote the interests of their client. This obligation to the client is primary, but it does not relieve REALTORS® of their obligation to treat all parties honestly. When serving a buyer, seller, landlord, tenant or other party in a non-agency capacity, REALTORS® remain obligated to treat all parties honestly. (Amended 1/01)

Agents should NOT be looking to see what listing is going to pay them more so that they can "sell" their buyer a property. The client's interest is to always be primary...period! The agent who puts their interest ahead of a client is going to wind up in trouble at some point.

I'll be interested in knowing how it was handled.

Jun 12, 2009 04:16 PM
Brian Burke
Kenna Real Estate - Lone Tree, CO
Broker & Advising Expert-Denver Luxury Real Estate

I'm with Cris. Doesn't sound like what they were doing was for the best interest of the client. Besides you're not to talk about commission numbers here either. ~Rita

Jun 12, 2009 04:29 PM
Sukhdev Farmah
Triangle Lending Group - Morrisville, NC

I dont his client going to make offer on three properties most likely he want offer your listing.You should loyal with your customer.Agent just want if he can get some more commession out of your.

Jun 12, 2009 04:32 PM
David Ethridge
Sea Lion Real Estate - Long Beach, CA

I would definitely report something like that to my Board of Realtors.

Jun 12, 2009 05:11 PM
Anna Chroscicki
Re/Max Masterpiece Realty - Port St Lucie, FL
Realtor - St. Lucie County affordable Real Estate

I think your question is how we would handle situation being you. Yes, agent didn't act right. It actually happened to me as the listing agent back in the times when market was great. So I know exactly what I would do and what I did. I went to my seller and told my seller what happened . And you know what my seller did? He raised commission. And going back to the other agent: how do you know , buyer wasn't agent's friend , family.....and actually knew whole situation. And why would it be unethical to talk about how much you are going to get paid. It is different than talking to other Real Estate practitioners about fixing commissions on all the listings. Again....I wouldn't do anything like that ever, ever( what buyer's agent did ). but not representing and not knowing buyer I would just talk to my seller.


So, how does story ends  ?

Jun 12, 2009 05:25 PM
Jim Hale
Eugene Oregon's Best Home Search Website

Okay, so I get everybody's drift here.  I agree the agent call was at the margin.

But I'm not sure it is an ethics violation.

Are we saying here that the amount of the BAC doesn't matter?  How about 1% instead of 2.5%?  How would you feel about his call then?

Do you never give the seller some guidance about how much the BAC should be?  Filling out the BAC box on the listing form is part of the negotiated listing agreement.  Do you just fill in 3% without any discussion?

Have you never told a seller that 3% may get his property more attention than 2.5%?  Maybe you should hae done so.  Now, who is failing their client?

Have you given the seller good advice on how much that BAC should be?  What proportion of listings in your multiple are at each level of BAC?

Does your MLS allow an agent to include the per cent of BAC as a search parameter?  Would it be ethical to simply decide you were not going to suggest any property that had a BAC under 3%  How about saying, "Heck no, I won't go 2%"?

Maybe the agent calling simply has different feelings about the value of his time than you do about your own.


Have I ever made such a call? No.  Have I ever searched for BAC? No.

Am I going to get up on my horse about an agent who does?  No.


How do you know his buyer does not agree with him about the value of his service?  Or has not approved his tactic with the expectation that the BAC will not really matter in the end--just while you are getting the BAC increased? 

Maybe he (must be a he) has a buyer agency agreement for 3% and is merely trying to conserve his buyers' limited funds at closing.


My guess:  a hundred AR members subscribed to the poster's blog.


Jun 12, 2009 07:06 PM
George & Arlene Paukert
Road to Wealth, Inc. - West Palm Beach, FL

I would call your state board and ask them how they feel about what this guy is doing, because we all know the answer to what they would think. These are the kinds of agents that are giving you good agents a bad name and they need to be out of the business.

Jun 12, 2009 11:26 PM
Leesa Finley
RED Properties - Wake Forest, NC
RED Properties - Raleigh NC Real Estate

WOW - he called is a business dilema, huh?  What bullsh!t that was!  Plase let us know what happened with this clown.  I read Jim's comment above - it comes down to the other agent "pushing" one house over another because of what he would get paid.  Pathetic.

Jun 12, 2009 11:34 PM
Melanie Gates
Coldwell Banker Advantage - Goldsboro, NC

Lots of great stuff here folks!  But most of you are right on target.  This is not a large market so everybody knows everybody and this agent already has a reputation for being somewhat sleezy.

JIM - You bring up some good points but doesn't this really amount to extortion?  Doesn't this now cause the seller to negotiate based on what the agents needs are and not what the buyer asks for?

RITA - I'm not discussing what commissions SHOULD be, I'm merely telling a story.  It would be the same story if the numbers were different and this is in no way price fixing.  I think it's clear based on the story that everyone is offering something different.

Jun 12, 2009 11:42 PM
Connie Harvey
Pilkerton Realtors - Brentwood, TN
Realtor - Nashville TN Real Estate

Melanie, I think that the Buyer already likes your listing better, at the lower commission. This guy's trying to get a better commission before he brings you the offer.

Jun 12, 2009 11:51 PM
Melanie Gates
Coldwell Banker Advantage - Goldsboro, NC

Okay, so here is the rest of the story.  After discussing the 'issue" with my BIC (she authors the North Carolina Real Estate textbooks), she encouraged me to contact the NCREC to inquire about legalities and how to keep myself legal in this situation.  I spoke with one of their attorneys who said she had many agents calling giving her the same details of similar situations but that no sellers/buyers had yet sent in a complaint.  Being that this is the only way the NCREC can take care of these kinds of issues, she asked me to encourage my seller to file a complaint and eventually I did just that.

Like Connie, I figured out within the hour of the agent's call that the buyer must be leaning heavily toward my seller's property for him to have concerned himself with what the commission amount might be.  He later called me and wanted to give me a verbal offer but because I thought he might be fishing for confirmation of a bonus before actually meeting again with his buyer, I insisted that he give me the offer in writing.  Once the offer was received in writing, my seller nervously negotiated without saying for sure that he would give a bonus or increase the commission rate.  I say "nervously" because the seller was concerned throughout the offer to close process that the buyers agent would do something to make the deal go sour if he knew for sure he wasn't getting a bonus.

The deal eventually closed and the seller HAS made a formal complaint to the Real Estate Commission.  At their request, I provided the chain of events as they happened (I was keeping a log of phone calls and e-mails) just for this reason.

While the end result has yet to be decided, the REC was quite interested in the actions of this agent which leads me to believe that they too believe that this violates the Realtor Code of Ethics.  Think about it....he basically held this seller hostage to his subtle threat of selling a home to his buyer that would net him the most commission.

Any new thoughts?  Would you have handled this situation any differently than I did?

Jun 14, 2009 04:18 AM
Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices


"the REC was quite interested in the actions of this agent which leads me to believe that they too believe that this violates the Realtor Code of Ethics".

REC has nothing to do with Code of Ethics. If agents are not members of NAR, they are not subscribe to COE, but are still covered by the laws enforced by REC.

And here how I would have handled this. I would never suggest to the Seller to file a complaint. If I would think that it is in the best interest of my Seller, and I have failed to set the commission to the level that it would attract top producers (whihc very much can be the case here, Jim might be correct), I would offer the other agent 0.5% and take it of my share of commission. This would not hurt your client, which you show as the main concern, and it would award an effective agent.

Jun 14, 2009 06:35 AM
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

Ok Melanie, Let's analize this> first it is possible that the Buyer and his agent are working under a Buyer;s Broker Agreement where the agent is guaranteed a minimum amount of commission. If this is the case then the amount of the co-broke would certainly make a difference to the Buyer since he would have to make up the short fall.

Also, it is NOT unethical for the BA to ask for an increase in the co-broke. And in fact the only time he can do it is prior to accepting the offer of compensation by submiting a puchase offer. So in order to work within our CoE he would have to ask prior to presenting the offer for his Buyer.

So this situation is not as cut and dry as it seems.



Jun 14, 2009 12:10 PM
Jim Hale
Eugene Oregon's Best Home Search Website


I agree with Bryant (or vice versa). 

How I view this would depend on knowing the facts of the case better than you have detailed them so far...especially as to whether the buyer knew of the agent's tactic and especially as to whether a buyer agency agreement was in place.

I find categorizing this buyer agent's tactic as extortion to be an extreme over reaction on your part.

That is like saying that every 3% BAC listing out there across the fruited plain is 5 parts okay and 1 part extortion.

That will not wash with most RE licensees.

But it might be agreed to by a lot of other folks.

And, by the way, I would never suggest that a client file a complaint with the regulatory agency or even the local REALTOR association.  If I thought one was justified, I'd file it myself.

Please let us all know what happens on the complaint in this case.


Jun 14, 2009 06:45 PM