Yesterday I got a call and the caller only wanted to know “What is the Going Commission Rate?” This is not a question that can be easily answered and in fact it is not a question that can be answered at all. I explained to this caller that what is charged for commission is much more complicated than that. I explained that because of Anti Trust Laws licensed real estate agents and brokers do not know the answer to that question because we are never allowed to discuss it with other agents and/or brokers. Ever. If we ever have a discussion with another licensee it could be considered price fixing. I explained to this caller that I do now know the answer to her question because I have never had a discussion with anyone about what they charge. I only know what I charge.
I also tried to explain to this individual that even if I told her what I charge it would not tell her what she is getting for her money. Every agency/agent/broker includes different marketing in their fee. It would be like asking how much a car costs which would give you a gross number but does not tell you what accessories or packages are included. Without knowing the answer to what is included how can you compare one agency/agent/broker to another.
Then there is the question of c0-brokes. That is the percentage of the total commission the agent will pay to the co-operating agent to bring a buyer. I believe that the amount of the co-broke can effect the motivation of a selling agent. As an example if you list your home and agree to pay (?) and the agent you list your home with decides to keep the majority of that amount and only pay the selling agent (?) you will not get as much traffic as you would if there is a fairer amount paid out.
Commission is always negotiable, and a discussion..
From the Realtor Code of Ethics we have an obligation to discuss with the seller what our office policy is on co-brokes:
Standard of Practice 1-12
When entering into listing contracts, REALTORS® must advise sellers/landlords of:
- the REALTOR®’s company policies regarding cooperation and the amount(s) of any compensation that will be offered to subagents, buyer/tenant agents, and/or brokers acting in legally recognized non-agency capacities;
- the fact that buyer/tenant agents or brokers, even if compensated by listing brokers, or by sellers/landlords may represent the interests of buyers/tenants; and
- any potential for listing brokers to act as disclosed dual agents, e.g. buyer/tenant agents. (Adopted 1/93, Renumbered 1/98, Amended 1/03)