Selling Broker Commission $1

By
Real Estate Agent with Village Real Estate Services, Inc.

 What do you do when you see the commission offered is $1?

Let's say you've been sending listings to a prospective buyer for months.  They've finally gotten pre-approved and want to start going to look at houses.  They give you a list of the homes they want to see.  By chance, while checking availability, you notice that the commission offered to the Selling Office is $1. 

This presents quite a dilemma.  How can anyone honestly work for $1?  That won't even buy more than a few miles worth of gasoline.  So, how do you handle it?

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Marlene Bridges, REALTOR®  800 777-1775

South Orange County Real Estate Website

Orange County Seniors Lifestyles Blog

SRES - Seniors Real Estate Specialist®

CRS-Certified Residential Specialist®

President - Laguna Hills/Laguna Woods Chamber of Commerce

Marlene is a highly experienced  South Orange County CA REALTOR® specializing in residential Real Estate and the sale of Homes and Condos in South Orange County, California and Saddleback Valley cities of: Laguna Woods, Laguna Hills, Laguna Niguel, Laguna Beach, Rancho Santa Margarita, Lake Forest, Dana Point, San Juan Capistrano, San Clemente, Aliso Viejo, Mission Viejo.   

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Location:
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Rainer
4,718
Jenny Croshaw
South Florida Structured Real Estate

Do you hate when...

a client lies about their income, pre-approval, motivation to buy

every been used and burned by a client or other party who held back some cards...

Honest....and a belief in karma is the positive way to live...

I will bet most reasonable people would be willing to work a solution

May 18, 2007 04:11 AM
Rainmaker
73,931
Ray Delao
Home Foundations LLC

Can someone really only offer a dollar? I'm new and I always thought you got a percentage. A dollar would not go far anywhere, even worse if you have to split with your broker :)

thanks

Ray 

May 18, 2007 04:57 AM
Rainmaker
1,368,716
Donna Harris
Realtor, CDPE & ASP - Hill Country Lakeway Austin
Regent Property Group
Call the listing agent and check to see if it's a mistake.  If it's not a mistake, make sure you have the buyer's agreement signed that guarantees payment and then calmly let your buyer know that this particular home is not compensating you and that they will need to be prepared to pay your fee at closing, maybe in the form of rolling it into their mortgage so they're not out of pocket the amount.
May 18, 2007 06:06 AM
Rainer
416,541
Becky Troutt
Reynolds Realty of Manatee Inc

We had the same thing happening here in our area with Home Discovery.  The commission they had in the MLS was $202 minus $200.  So we would get $2.

I called them and asked them if it was a mistake and they said no, that if we want anymore commission other than the $2 that we had to add it to the sales price of the home!

That outraged a lot of people.  They eventually changed it and they now offer a percentage....but come to think of it, I haven't ran across one of their listings or saw one of their signs in a really long time.

Maybe another one bites the dust?  LOL....

May 18, 2007 06:28 AM
Rainmaker
223,559
Laurie Mindnich
Wow- that's a new twist.  One dollar?  The listing agent has no business advertising the property that way.  Bring the buyer to the house, and if they decide that they want it, submit an offer that includes a clause that pays you the normal commission.   If that doesn't work, Donna's suggestion is also good, but I'd show the house and demonstrate your integrity to the buyers without getting into the money part FIRST- maybe they won't even like the house.  If they do, and you continue to work with them, they might be inclined to feel that you're worth every penny...
May 18, 2007 06:29 AM
Anonymous #6
Anonymous
Anonymous
A BAA will solve this issue up front.
May 18, 2007 08:18 AM
Rainmaker
197,226
Marlene Bridges
Laguna Homes|Laguna Condos|Laguna Real Estate
Village Real Estate Services, Inc.

Jason - Yes, I too believe that what goes around comes around.

Ray - Yes they can offer only $1.  It is not against our MLS Rules and Regs nor is it against our REALTOR Code of Ethics. 

Hi Donna/Hi Christina - A Buyer's Agreement certainly is one way to go on this dilemma.

Hi Becky - Sounds like you've had some experience with this.  Glad to hear that the company changed their business practice.

Hi Laurie - Your method is the one I've used in the past.  And you're so right, the buyers do respect me for showing them everything they've asked to see.  I performed my fiduciary responsibility.  So far, the house with the $1 commission has not been the house they want to make an offer on anyway.

 

May 18, 2007 09:28 AM
Rainer
8,311
Loretta Carson
CARSON-O'CONNER HOME GROUP
First National Reatly, INC

I guess that is why most agent are not in this to get rich! If my buyer wanted the property I would have to work for my buyer. I would have to ask the agent about the commission and hope it was a mistake. That house may be on the market for awhile. Is the listing agent being fair and giviing good repsentation to the selller? 

May 18, 2007 09:40 AM
Rainmaker
654,045
Jim & Maria Hart
Charleston, SC Real Estate
Brand Name Real Estate
I have never seen only a dollar offered as the commission, and I hope that I never do.  What an injustice to the sellers because no agent will show that home.  As wrong as it may be, we all know it's the truth.  I'm sure that the sellers are the ones stipulating the ridiculous commission, but they can't possibly understand what they're actually saying.  It's like going FSBO, but being fully represented at the same time.
May 18, 2007 11:02 AM
Rainmaker
197,226
Marlene Bridges
Laguna Homes|Laguna Condos|Laguna Real Estate
Village Real Estate Services, Inc.

Loretta-Your question is one I've wondered about as well.  Is the listing agent really doing what's in the best interest of the client?

Hi Jim & Maria-I think what's actually happening is that the agent is hoping to sell the property themselves and represent both buyer and seller.  Dual Agency is legal in California.  It just makes me wonder sometimes if the sellers are even aware of what these listing agents are doing.

May 18, 2007 07:01 PM
Rainer
17,916
Morgan Brown
Inman News

Hi Marlene,

What a dilemma.  It does seem like the agent wants to earn both sides of the transaction.  I think you did the right thing, show it to them in good faith, and consider the options above.  I am going to share this scenario with a few people I know as it is highly instructive in ethical decision making in business.  Thanks for sharing!

May 20, 2007 01:15 AM
Rainmaker
197,226
Marlene Bridges
Laguna Homes|Laguna Condos|Laguna Real Estate
Village Real Estate Services, Inc.
Thanks Morgan.  It really does boil down to ethics.  Thanks for sharing this with your colleagues.  I'd love to hear back from you.
May 20, 2007 01:20 AM
Rainer
5,078
Cheri Rayas
CRS
Millwood Realty
I agree, a BAA will protect you on your commission.
May 27, 2007 11:04 PM
Rainmaker
325,189
Jeff R. Geoghan
Marketing VP & Real Estate Agent Trainer
Coldwell Banker Select Professionals
I agree with Donna Harris on this - just be upfront with the buyer and have you BA signed!
May 27, 2007 11:16 PM
Rainmaker
197,226
Marlene Bridges
Laguna Homes|Laguna Condos|Laguna Real Estate
Village Real Estate Services, Inc.
Cheri and Jeff - I agree a BAA will protect your commission.  However, do you think that the listing agent is really performing his/her fiduciary responsibility to their clients?
May 28, 2007 09:51 AM
Anonymous
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Rainmaker
197,226

Marlene Bridges

Laguna Homes|Laguna Condos|Laguna Real Estate
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