The Call Out - Episode 1 - Current Trend of Reducing Commission
Thursday Dec 05th, 2019
The current trend that I've been seeing for the last little while now is this idea that if a Listing Brokerage is to show a buyer one of their listed properties and that buyer ends up buying that specific property with another Brokerage, then the Listing Brokerage is automatically going to reduce the commission that is being offered to the Co-operating Brokerage. Here are my thoughts on this ... To the Listing Agents, it is your duty to sell that property. Who are you really looking out for here? Are you looking out for your own best interests or are you looking out for your seller's best interests? So, this means that if you have to do an extra showing and it happens to be to a buyer who is not your buyer, you're still doing your job which is to sell that property to a prospective buyer. On the flip side, there are Buyer Agents who encourage their buyers to go and view properties with the Listing Agent first. Come on, do your job. Represent that buyer, do what's best and protect the best interests of your buyer. Do your job and show that buyer any prospective properties that fit within their criteria regardless of location. Don't leave it up to the Listing Agent to do your job for you.
The other concern that I have and want to discuss is the contractual obligation. Is the seller aware that if this circumstance comes into play that this is what will be happening? Let's take a 5% listing with 2.5% offered to the Co-operating Broker. Many of the examples that I've seen have stated a reduction to the Co-operating Broker's commission by 1.5% if the buyer is introduced to the property or shown the property in a private viewing, by the Listing Agent. Okay ... so where does that 1.5% go? On a 5% listing, 1% is given to the Co-operating Broker, and then 4% is going to be retained to the Listing Agent because they did a private showing for a prospective buyer? If this was explained to the seller, how do you think they would react or feel?
You can agree with me or you can disagree with me, and that's okay. This is what I really wanted my new podcast to be ... Real Estate's, Real Talk.
Listen to the full podcast episode here and let me know what you think.