You be the Judge

By
Real Estate Broker Owner with Island Style Realty Inc. RB-19250

I received this e-mail last week and have been giving this some thought.  I was not sure if I should post this or not.  I think I will throw it out to the group.  I blocked out the commission percentage, because I do not feel comfortable discussing percentages and actual fee amounts.  It is sufficient to say the percentage was higher than what I am used to seeing.

Here is the message; the name was removed to protect the innocent.  I copied and pasted it exactly how it was written minus the actual percentage.

                                                                             Lexus

AWESOME BRAND NEW  PENTHOUSE -  and NO AGENT NOR BROKER IN ALL OF HAWAII  IS OFFERING A  BRAND NEW SPECIAL ORDER LEXUS 2008 HYBRID and a huge GENEROUS        % COMMISSSION  to any broker - agent  for a full price CASH OFFER_ ( NO LOAN) on this fabulous one of a kind PENTHOUSE - BEST VALUE IN ALL OF WAIKIKI NOW!

Is this any kind of an ethics violation?  Any laws broken here?  Is it smart marketing or bad business?

How would they make good on this if an agent brought in the buyer?  All commissions go to the brokerage.  How would you split a Lexus?   Does the broker get the trunk and doors?  You would also have to pay taxes on the car.

This would have to be disclosed to the buyers wouldn't it.  How would you collect this and look out for the buyer's interest at the same time?  As a buyer's agent aren't you supposed to get your client the best deal possible?  This would make for a severe conflict of interest.

What do you think?

Posted by

 

--------------------------------------------------------------------------------------------------------

Randy L. Prothero, REALTOR®

Principal Broker, ABR, AHWD, CRS, e-PRO, GRI, MRP, SFR

Island Style Realty Inc.

Team Leader - "The Prothero Group"

Randy Prothero is well established as an expert in working with military / VA clients and first time home buyers.  His home seller's (listing) campaign is one of the most aggressive marketing programs in the area.

Based out of Mililani, Hawaii. Randy services the island of Oahu (Honolulu County) Performs mediations and ombudsman services for the Board of Realtors.  To improve overall professionalism in his area Randy also offers classes for real estate agents. 

www.HawaiiRandy.comOahu (Honolulu County) Property Search  Hawaii Military Relocations

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Location:
Hawaii
Tags:
real estate
ethics

Comments 32 New Comment

Rainmaker
617,637
Randy Prothero
Hawaii REALTOR, (808) 384-5645
Island Style Realty Inc.

Teri - We would have exactly the same problem here.

June 06, 2007 05:06 PM
Ambassador
2,030,434
Todd Clark
Broker - Beaverton, Oregon Real Estate Expert - (503) 524-9494
Keller Williams Realty

I've heard of investors doing this, but not agents. I've heard of a FSBO selling a home with a new car in the garage instead of having to pay agents commissions.

June 07, 2007 12:17 AM
Rainmaker
617,637
Randy Prothero
Hawaii REALTOR, (808) 384-5645
Island Style Realty Inc.

Todd - Everything is negotiable in real estate.  You can throw in what you want for the price.  The bigger issue is is it OK for an agent to pay a big inducement to another agent to bring in a top dollar offer? The buyer's agent has a responsibility to get his client the best deal. 

In our state they can't give it to the agent anyway.  It must go to the broker.

June 07, 2007 04:35 PM
Rainer
19,093
Joseph Grabowski
REALTOR - 4saleinbucks.com
Keller Williams Preferred Real Estate

Randy,

 quote: "Joseph - An agent can not accept any form of compensation directly.  That is against the law here.  It has to be paid top the broker and then the split is between them and the agent."

 Like I said before, the Lexus is not a commission. I never said anything about the agent receiving compensation directly. Whatever happens to the Lexus is between the agent and his or her broker. In their independant contractor agreement they might have it as all bonuses do directly to the agent. Or they might have to negotiate something with their broker.

If I was to get that as a bonus, if my broker wanted some sort of spilt or compensation because I got the Lexus, I would find another broker to work for.

 

June 07, 2007 04:54 PM
Rainmaker
617,637
Randy Prothero
Hawaii REALTOR, (808) 384-5645
Island Style Realty Inc.

Joseph - Your broker would not have a problem with an agent who represents their own interest over a clients?  I am just completely uncomfortable with giving a bonus to an agent to push the price up with their client.

June 07, 2007 05:24 PM
Rainmaker
617,637

Randy Prothero

Hawaii REALTOR, (808) 384-5645
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