Get your head out of the sand, before it's too late!

By
Real Estate Broker/Owner with Bryant Tutas-Tutas Towne Realty, Inc BK607690

 Are you unknowingly violating Anti Trust laws? Or are you doing it on purpose? If so, you need to get your head out of the sand before it's too late. "Broker Bryant, what the heck are you talking about?" Well, thanks for asking. I was reading my new Florida Real Estate magazine today and read something that I had actually been thinking about recently. There was an article about Anti-Trust violations and how to avoid them. The normal things were discussed: Don't talk about commissions, don't conspire to not show another companies listings because they charge a smaller fee etc. etc...

Anyway, they also mentioned co-broke compensation in the MLS. In our local MLS we have four fields that require a commission amount. As you know, this is an offer of compensation to other Brokers that show and sell our listings. Our MLS has: Buyer Agent...Transaction Broker.....Sub Agent....and Non-representative. First, we don't have sub agency in Florida so this field is always 0. But, what I have been noticing is that REALTORS® are putting different amounts in the remaining three fields. Why? Does my relationship with the Buyer really make a difference to you? If my Buyer purchases your listing shouldn't I be compensated the same regardless of how I choose to work with my Buyers?

Now, as a listing Broker, I always offer the same compensation to whoever sells my listing. I don't care what your agency or non-agency relationship is with your Buyer. If you are licensed and sell my listing, then you get paid. But what Brokers, in my area, are doing, is reducing the amount that they will pay a non-representative. Folks, I'm here to tell you, that if you are doing this you are breaking Anti Trust laws, in my opinion. The purpose for these reduced offerings is to avoid having to pay an Alternative Business Model(ABM) a full co-broke commission. Or am I missing something? Does anyone have an explanation for offering a lower amount that doesn't include "Well, I may have to do more work" or "They only offer us x percent so we are doing the same".

Florida does not have minimum service laws. Nor should they. As I wrote in my previous post, ALL ABMs have just as much right, as I do, to conduct their business, their way.

By reducing the amount of their co-broke you are harming the Seller and you are discriminating against the way someone chooses to handle their business.. Did you ask the Seller about this? Did you explain to them that it will eliminate some REALTORS® from showing their property?

So my advice is, don't do it. Make the compensation the same across the board. You are treading on very dangerous ground by having variable commissions in your co-broke offerings. Have you thought about this? Does this happen in your area? Am I wrong?

***Broker Bryant Image compliments of Doreen McPherson. Thanks Doreen!

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EDITED: TO ALL: THIS POST IS MY OPINION AND WAS POSTED TO TRY AND GET AN UNDERSTANDING ON THIS ISSUE. ALL STATE LAWS VARY AND THIS WAS WRITTEN FROM MY FLORIDA PERSPECTIVE.  

All content copyright © 2007 - Broker Bryant Real Estate Ramblings

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Show All Comments
Rainmaker
574,887
Neal Bloom
Keller Williams Properties, Weston FL - Weston, FL
Realtor CRS-Weston FL Real Estate
Maybe I am in violation..I will offer more the the buyers agent if I can just to get thing sold or am I stupid? Even if they do not do any work half the time. There really is no way to tell until you see the HUD if you are on the BA side.
Jun 02, 2007 11:11 AM #45
Rainmaker
1,088,921
Bryant Tutas
Bryant Tutas-Tutas Towne Realty, Inc - Poinciana, FL
Broker/REALTOR, Tutas Towne Realty, Inc

Neal, You're missing the point. The point is not how much you are offering the buyer side(even though that is important) the point is whether or not you are offering ALL buyer sides the same on the same property i.e if they are working as either a BA, TB or NR do you still offer them all x% or does it vary depending on their agency status? That's where I see an issue that could be walking a thin line. 

Fran, In Florida where we don't have subagency it shouldn't affect the seller to offer the same compensation regardless of the BAs agency relationship. But you are right we need to make sure our sellers understand these things. And not just say "sign here and here".

Thanks Judi.

Missy, Do you think that's complicated enough? How on the heck will the consumer understand all those options. Not that they really care but agency rules are soooo complicated and confusing.

Sally, are you saying there is only ONE field in your MLS for compensation? That's a good thing.

Paula, I agree. Playing games and having different amounts really complicates things and does not help our sellers. If they show it and sell it then pay them.

Karen, Not sure I understand why he would want to work that way. Sub-agency really needs to be a thing of the past.

Thanks Kaye!!!

Lisa, But don't you think that is an assumption? I know thats why they offer less but since we don't have minimum service laws in Florida I think they are walking a very thin line.

Hi Lola, I agree with Lenn too about the subagency issue. BTW Transaction Brokerage is a form of representation, albeit limited and no fiduciary. But we are still representing our customers and can represent either seller, buyer or both. The confusion is most REALTORS(R) in Florida think we are representing the transaction and that is NOT the case. The name is very confusion.

Jun 02, 2007 12:39 PM #46
Rainer
97,765
Danny Smith
DISCOVER TEXAS HOMES - Round Rock, TX
First off I want to congratulate you and Billie on your anniversary! Then I want to express that you truly are the master Blogger. The last three articles you did were masterfully done and the way you tied each one in with the pictures was absolutely genius!
Jun 02, 2007 01:49 PM #47
Rainmaker
1,088,921
Bryant Tutas
Bryant Tutas-Tutas Towne Realty, Inc - Poinciana, FL
Broker/REALTOR, Tutas Towne Realty, Inc

Danny, Thanks my friend. I've got a special post in mind already for your ball and chain graphic:)

Cehryl, Thanks for stopping by as always.

Jun 02, 2007 04:08 PM #48
Rainer
7,654
George W. Miller
Keller Williams Realty - Naugatuck, CT
Naugatuck and Beacon Falls Real Estate
I can't believe how greedy some of the people are in this business.My limited experience is that there are very few in the middle. They are either real good agents or real bad agents (in terms of ethical behavior).
Jun 02, 2007 11:02 PM #49
Ambassador
1,031,275
Celeste "SALLY" Cheeseman
Century 21 Liberty Homes - Mililani, HI
(RA) AHWD CRS ePRO OAHU HAWAII REAL ESTATE

Yup......it just says COMP:   and we enter the %....  

  

Jun 03, 2007 01:58 AM #50
Rainmaker
132,116
Ana Connell
G & C Properties - Burbank, CA
Burbank Real Estate Agent

Happy Anniversary! 

                                                               smiles toasting

I have a sincere respect and admiration for folks that commit to each other and work to stay together, especially 25 years!  What a fantastic accomplishment!

Jun 03, 2007 11:29 AM #51
Rainer
245,304
Desiree Daniels
RE/MAX Tri County - Robbinsville, NJ

First of Happy Happy.....

now business on commission - I have - WITH SELLERS PERMISSION - Offered less co-broke to the selling agents as compared to what I have kept for the listing side.   I often find myself "giving up" my money to put deals together and the handful of times I take true 6% listings and know they are easily movable - I will keep 3.5 and co broke out 2.5 - but that is listing on the listing agreement and the seller has to agree to it.... 

Now I am sitting here thinking was that even your question????? oh crap... have a good night anyway!

Jun 03, 2007 07:56 PM #52
Rainmaker
1,088,921
Bryant Tutas
Bryant Tutas-Tutas Towne Realty, Inc - Poinciana, FL
Broker/REALTOR, Tutas Towne Realty, Inc
Desiree, Nope it wasn't. :) 
Jun 04, 2007 06:45 AM #53
Anonymous
Anonymous
Anonymous

We only have two slots. Buyers agent or sub-agent.

We would have to do more paperwork for compensation to the non agent and both the buyer and seller then have to agree with that offer.

Jun 04, 2007 08:18 AM #54
Rainmaker
76,591
Jennifer Walker-Derby
Re/Max Westside - Marietta, GA
Real Estate Extraordinaire
great photo!  4 boxes is confusing.  here, there is a slot for co-oping commission and it is irrelevant which relationship you have with the buyer, just as long as your bring them and you are licensed!
Jun 04, 2007 09:51 AM #55
Rainmaker
223,559
Laurie Mindnich
Centennial, CO
Hi, Broker Bryant- we have several companies here that offer NO commission to a buyer broker at all.  Zero.  I'm still trying to figure that one out...
Jun 04, 2007 10:15 AM #56
Rainmaker
163,574
Susan Milner
Florida Future Realty, Inc. - Cape Coral, FL
Cape Coral Real Estate Broker, FloridaFutureAgents

BB:

I guess this is kind of a stupid question but if we could be violating anti-trust laws by offering different amounts depending upon agency WHY is this an option at all? I have seen all kinds of things in MLS, from offering 0 to any of the 3 agency choices (buyer/transaction/none). I think MANY agent simply do not know what they are filling out in those fields.

Some think it is their commission split & the buyer's agent commission maybe?

There are some great responses here on your blog but overall it's kind of the old saying "garbage in / garbage out" - I believe many agents simply do not understand the fields they are filling in!

I agree, if the person bringing the buyer is licensed, I'll pay them! Sometimes you end up doing more work on your side even if they represent the buyer as a buyer's agent - agency typically doesn't equate to competency. Again, maybe the buyer's agent simply doesn't understand the difference in agency choices either.

 

Jun 04, 2007 12:43 PM #57
Rainmaker
1,088,921
Bryant Tutas
Bryant Tutas-Tutas Towne Realty, Inc - Poinciana, FL
Broker/REALTOR, Tutas Towne Realty, Inc

Susan, I don't know? Probably the same reason we still have a field for subagency even though it doesn't exist in Florida. Variable rates just does not sound right to me. Personally I prefer to do all the work. Keeps me in control:)

Laurie, I guess those folks just want to keep their listings in house. Do you think they are ABMs where the seller didn't want to pay a co-broke but is just paying a fee for the MLS? Kind of defeats the purpose. The MLS without a cobroke is worthless unless thay just want to get on realtor.com.

Jennifer, I like the way you guys do it. Makes sense unless you have to deal with subagency.

Jun 04, 2007 03:51 PM #58
Rainmaker
223,559
Laurie Mindnich
Centennial, CO
The term "buyer broker" is new here, and not  well received here.  The preference is in both representing the seller...like it was, YEARS ago!
Jun 05, 2007 11:13 AM #59
Rainmaker
223,559
Laurie Mindnich
Centennial, CO
Correction:  on several out here, under buyer agency it either reads 0, or neg (negotiable, presumably) where the the rest indicate a percentage.  Maybe there's a misunderstanding with respect to what that is...
Jun 05, 2007 11:39 AM #60
Rainmaker
1,088,921
Bryant Tutas
Bryant Tutas-Tutas Towne Realty, Inc - Poinciana, FL
Broker/REALTOR, Tutas Towne Realty, Inc
Laurie, sounds like subagency is the way you work in NY. Is that right?
Jun 05, 2007 12:01 PM #61
Rainmaker
223,559
Laurie Mindnich
Centennial, CO

The listings in the mls vary greatly.  There's seller agency comp, buyer agency comp, broker agency comp.  Typically, seller agency indicates a percentage, often, buyer agency is 0 or neg, and broker agency comp is also inconsistent.  I'm really surprised that the mls permits "neg" to be placed there- it sure does seem as though it's unclear.  If there's no amount listed in the mls other than "neg", what exactly does that mean?  I like everything in writing.  Colorado has utilized buyer brokers for years-no problem.  I'm reading articles in NY that are concerned about buyer agency/brokers expressing many of the same concerns that Co. had in the verrrrrry beginning.  I haven't seen an mls system with numbers that vary, or no percentages at all.  While all forms are available to establish a buyer agency relationship in NY, there appears to be  reluctance here.

Jun 05, 2007 02:20 PM #62
Anonymous
Anonymous
Anonymous

"Does anyone have an explanation for offering a lower amount that doesn't include "Well, I may have to do more work" or "They only offer us x percent so we are doing the same"."

Currently we offer full compensation to either Agent or Non-Agent (the only 2 options in our state).  But, my biggest concern is legal liability.   If a buyer is represented, THEIR agent is legally liable for whatever.  It goes on THEIR E&O.  For a non-agent buyer, WHO IS LIABLE?  That is a concern and one we are researching to determine.  If we find that Idaho law leans against the listing agent in non-agent situations, the compensation offered WILL BE LESS for non-agents. 

Jun 06, 2007 10:55 AM #63
Rainmaker
1,088,921
Bryant Tutas
Bryant Tutas-Tutas Towne Realty, Inc - Poinciana, FL
Broker/REALTOR, Tutas Towne Realty, Inc

Christina, I can understand that. In my area there is no additional liability. We don't have sub agency and rarely have any agency status. We are ALL presumed to be transaction brokers and we choose to work differently.

Laurie, NY certainly sounds confusing.

Jun 06, 2007 01:51 PM #64
Show All Comments
Rainmaker
1,088,921

Bryant Tutas

Broker/REALTOR, Tutas Towne Realty, Inc
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