Do you look at commission rate before you decide to show a property?

By
Real Estate Broker/Owner with Maui Life Homes / Metro Life Homes RS-78439 / BRE #01708344
https://activerain.com/droplet/57gq

Do you look at commission rate before you decide to show a property?

 

Over the years, I've had many different types of conversations with agents regarding the selling commission offered on listings.

To be honest, on a rare occasion, I have seen some quite ridiculous commission rates offered on the MLS.  It's like "I'm sorry, is this just for gas money?"  Where's the beef?!  LOL!  I've probably seen that more so on lease listings that listings for sale.

Yet at the same time, all of us see "selling side bonuses" being offered.  Many cases if there is an accepted offer by a certain date.

I certainly understand the theory of providing incentives to agents to show, and eventually sell a property.

But my question is:  Do agents actually "screen" properties by selling side commission before they even decide to show their buyers a property?

And if so, do you believe this is ethical?

There ya go.

Talk amongst ya'selves............

 



Ralph Gorgoglione - Broker / Realtor

Top 3% Realtors Nationwide

Metro Life Homes  / BRE #01708344
Maui Life Homes / RS-78439
(310) 497-9407 / (800) 591-6121  /  Fax:  (866) 470-2717

Web:  metrolifehomes.net  /  Blog:  HomeChitChat.com 

 

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Rainmaker
3,366,953
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

I use to think a selling agent bonus was a sure sign the property needed extensive repairs or the seller wanted way over market value. If a property fit my buyers need I showed it.

Oct 01, 2017 04:55 AM #10
Rainmaker
5,121,795
Barbara Todaro
RE/MAX Executive Realty - Franklin, MA
Marketing Agent for The Todaro Team

Good morning, Ralph Gorgoglione agents should not but they do.... and I can't blame them.... there are some agents who should be dragged out back and slaughtered.... that was a bit rough, but you get the point.... agents need to know what they're making or losing!!

Oct 01, 2017 05:17 AM #11
Rainmaker
3,693,337
Sheila Anderson
Referral Group Incorporated - East Brunswick, NJ
The Real Estate Whisperer Who Listens 732-715-1133

Good morning Ralph. Interesting question. When actively listing and selling I generally listed at 7% and it did make a difference. On my end I spent moe, and buyers agents did notice.

Oct 01, 2017 06:34 AM #12
Rainmaker
3,051,933
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of the Manchester NH's area Leading Agents

The thing is an agent learns quick what companies offer for splits. Some certainly may skip over a house. The whole thing can easily be over come with a good buyer broker contract with your buyer 

Oct 01, 2017 07:24 AM #13
Rainmaker
3,201,181
Kristin Johnston - REALTOR®
RE/MAX Realty Center - Waukesha, WI
Giving Back With Each Home Sold!

I can see why Kathy chose to highlight your post this week...well done!

Oct 01, 2017 07:46 AM #14
Rainmaker
3,428,006
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Hi, Ralph ---- I'll notice the commission rate(it's right there on the mls sheet with the pertinent details after all) but it's not a factor in showing a property to a buyer.   As far as bonuses....I'm trying to remember when one was used effectively.   

Oct 01, 2017 08:04 AM #15
Rainmaker
1,719,241
Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker in DC, MD, VA and attorney in DC

I am so glad that your post was featured - it is an important subject for each of us to consider

Oct 01, 2017 08:48 AM #16
Rainmaker
2,190,192
Elizabeth Weintraub Sacramento Realtor Top 1%
RE/MAX Gold - Sacramento, CA
Put 40 years of experience to work for you

I don't show property because I don't work with buyers, but I would imagine buyer's agents would look to see if there is a commission. Our MLS board lets us enter it as a dollar figure or a percentage. Sometimes agents make mistakes and they enter a small number under the dollar amount. Technically, that could be the commission.

But as far as a motivating factor, I don't think agents care much. That's why some places struggle with the buyer's agent commission. If you don't stand up, it will only get worse.

And bonuses? That's just downright insulting. That says you can be bought. Where is the integrity in that?

Oct 01, 2017 09:19 AM #17
Rainmaker
1,094,638
Margaret Goss
Baird & Warner Real Estate - Winnetka, IL
Chicago's North Shore & Winnetka Real Estate

I never used to until I sold a house and realized afterwards how low the co-op was. I tried to negotiate after the fact - but you guessed it, it was too late. Not sure what can be done about it, but I would never NOT show a house because of it. 

 

Oct 01, 2017 09:46 AM #18
Ambassador
4,070,529
Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude

I look at them on occasion but rarely ever right up front. It's certainly not afactor in showing a property or not. As far as bonuses, we hardly ever see them.

Jeff

Oct 01, 2017 03:15 PM #19
Rainmaker
3,237,389
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Ralph, Never looked at commissions, instead focused on what property was in the best interest of my client... and to bonus... I always found that to be a red flag for over priced properties...Endre

Oct 01, 2017 08:10 PM #20
Rainer
123,584
Anthony Kirlew
Group 46:10 Network @ eXp Realty - Gilbert, AZ
Helping You Make Fiscally Sound Choices

For those with a buyer broker agreement, it would be important to know the commission offered so the client can make a decision as to whether or not they want to pay the difference in what you charged and what is being offered. They may decline to look at the property if another seller is willing to cover their buyer broker fee.

Oct 01, 2017 09:25 PM #21
Rainmaker
1,469,260
Kat Palmiotti
406-270-3667, kat@thehousekat.com, Broker, Blackstone Realty Group - brokered by eXp Realty - Kalispell, MT
The House Kat

No. I look at the commission offered when preparing an offer. That's when it's an important fact.

Oct 02, 2017 06:00 AM #22
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1,345,587
Gayle Rich-Boxman Fishhawk Lake Real Estate
John L Scott Market Center - Birkenfeld, OR
"Your Local Expert!" 503-755-2905

Ralph, found this because of Kathy's focus on it. That has NEVER been my modus operandi. It's all about what suits my buyer best and like Endre Barath, Jr. that is my focus. As to bonuses, it doesn't happen around here! 

Oct 02, 2017 07:47 AM #23
Rainmaker
2,128,013
Sharon Tara
Sharon Tara Transformations - Portsmouth, NH
New Hampshire Home Stager

When I bought my current home, the commission rate was low on it. My agent noted it, but didn't hesitate to get me a showing and follow through when I wanted to make an offer. 

I'm currently using the same agent as I once again look for a new home. She will take me to whatever home I ask to see regardless of commission. 

Oct 02, 2017 10:13 AM #24
Rainmaker
640,674
Debra Leisek
Bay Realty,Inc Homer Alaska - Homer, AK

I dont look at the commission rate unless it is FSBO or one certain office. My goal is to find the property that works best for the client not me. 

Oct 03, 2017 12:42 AM #25
Rainer
274,678
Chris Lima
Atlantic Shores Realty Expertise - Port St Lucie, FL
Local or Global-Allow me to open doors for you.

Great question and I am so glad that I saw it in Kathy's "What I learned this week..." post.

The short answer is NO.  It is my job to show any property that suits the needs of the folks that I am working for.  That being said, there are always times in the mls when I see an agent's name and cringe.  Now, in the case of rentals, there are several listing agents that consistently offer a small flat fee(flat being the operative word) to the agent bringing the renter.  I still show those properties because it is what I am hired to do. 

Oct 03, 2017 05:59 AM #26
Rainmaker
168,994
Eva B. Liland Century 21 Doug Anderson
Century 21 Doug Anderson - Lancaster, CA
Glad to be of Service 661-714-1643

No, I don't look at the commission split. Last week, I attended a seminar that talked a lot about a buyers agreement in a way I never seen it before, something I will implement in the future.

Oct 05, 2017 05:53 AM #27
Rainer
126,463
Stavrula "Sam" Crafa, RNC,GRI, CDPE, PSA
Future Home Realty - Seminole, FL
Providing the integrity and service you deserve.

I look at commission splits but it doesn't influence if I'm going to show the property to a buyer, especially if they have asked to see it. I also use a Buyer Brokerage Agreement. I will usually accept what ever the listing agent is offering. But if it's ridiculously low or a FSBO that is not compensating a buyers agent, then I'm covered under the agreement with the buyer. I've been lucky in that in 16 years in this business, I've never had a buyer choose to make an offer on a house that was offering less than 2.5%. 

Oct 13, 2017 07:29 PM #28
Rainmaker
642,498
Carla Freund
Keller Williams Preferred Realty - Raleigh, NC
Carolina Life RealEstate & Relocation 919-602-8489

Ralph, I usually do because our buyer's sign an agreement that we'll get $X.XX% of the sales price. If that isn't what is offered by the listing company then the buyer is responsible for making up the difference. I want to let the buyer know if it is lower than the agreed upon amount. I do not screen listings for bonus money or higher amount. If the house fits, I tell the buyer and I also tell them the commission is greater than what I was expecting per our agreement.

Feb 14, 2018 07:46 PM #29
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