Do Commission Rates Drive Showings?

May 26, 2006

I remember writing an article about calls I received from buyer agents questioning the seller's offer of co-op sales commissions and my thoughts on agent "bonuses." You can find them here and here. The following excerpt is from the latest issue of REALTOR® Magazine:

This article was published on: 06/01/2006

ETHICS: Q & A
BY BRUCE AYDT
In whose interest?

Co-op offer shouldn’t dictate showings.

Q: I recently received a call from a salesperson who wanted to show one of my listings. During the call, she asked if the cooperative compensation percentage offered in the MLS was a mistake. When I said no, the agent said that she wasn’t sure she was willing to show her client the property unless I offered her one-half a percentage point more than the cooperative commission offered in the MLS. Is this salesperson violating the Code of Ethics by putting her own concerns about how much commission she might receive before her client’s best interest?

A: If the salesperson is indeed putting her own interests before the legitimate interests of her buyer client in finding a property, then she has violated Article 1 of the Code of Ethics. Article 1 requires that "Realtors® pledge themselves to protect and promote the interests of their client."

Aydt, ABR®, CRB, is senior vice president and general counsel of Prudential Alliance, REALTORS®, in St. Louis, and a former chair of NAR’s Professional Standards Committee.

Read the full article here.

Read the full article. There are circumstances when a buyer agent might warrant asking the question acting in the best interest of their client. That is when a buyer agreement is signed requiring the buyer to pay any difference between the seller co-op fee and the fee (commission) required in the buyer agreement.

Our buyer agreements always denote the compensation as "the buyer broker co-op commission as stated in the MLS listing." We show every property our buyer wants to see. It is never an issue. And, if there is a "bonus" offered we always disclose it to our buyer and offer to rebate the bonus to them at closing. This is an interesting topic and invite your comments and/or experiences.

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