Having established that North Carolina Agents will need to disclose Additional Compensation, agent bonuses, and legal kickbacks and valuable awards from third parties when showing homes, I think there are several great questions for smart clients to ask. I would ask them if I were a prospective Buyer in the Raleigh Cary area.
See, the new North Carolina Agency Fee Disclosure rule operates at the Managing Broker or Firm level. Technically, that is the level at which the client engages agent services. The Client is technically not hiring the specific person, the "Individual Agent," but is actually engaging the firm. So disclosure is intended to clarify the total compensation paid to the firm.
The true intent of the new NC rule is for the consumer to clearly understand agent compensation details in case it appears that additional payout may divert an "Individual Agent's" focus to personal compensation and away from fiduciary duty. Smart Buyers will be aggressive and ask the "Individual Agent" a few questions that go a little beyond the new rule.
The following questions should help the prospective Buyer Client understand and gain clarity:
1. Will you personally make more money if you sell us a listing from your firm, or listings from your specific office?
2. If "Yes," how much money might that be? Will you disclose this amount to me upfront when showing me such homes?
3. Are you involved in any sales contests based on internal office sales volume with an award above nominal value to be presented to winners? What is the value of the awards? Do you expect to win?
4. Will you readily show me homes listed by other firms? Will you have to show me your firm's listings first?
Smart Buyers will require clear and satisfactory answers with no hesitation on the part of the Individual Agent. And, as always, an agreement in writing regarding full disclosure is far superior to any verbal agreement.
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