Hi folks. In this current market, understanding how we get paid and who pays us has never been more important. Everyday we have to deal with REOs offering low co-brokes and Short Sales where co-brokes can be changed at the last minute. But in spite of these things we want to be able to do a good job for our Buyers AND we want to get paid.

Now since this post will be about commissions, please let's not use specific percentages, we don't want to upset Sherman and his anti-trust crew. I'm going to be talking about principles anyway so amounts are not important.

First, I want to clear up a major misconception in our industry "I do NOT have to show your listing if the co-broke is less than I'm willing to work for." It is neither unethical or illegal for me to pass on showing your listing.

Do you believe that? Well, whether you believe it or not, it's true. BUT......and here's the qualifier.....you have to disclose this to the Buyer.

As primarily a listing Broker I also have to make sure my Sellers understand this. In this more competitive market my Sellers must offer a competitive co-broke, for selling their property, or it will not get shown. That's a fact and they need to understand it. It's my job as their Broker to make sure they do. The co-broke is a market condition and we have to base it on what's happening in the market today.

Buyers are far and few between, in most markets, right now. If I have a good qualified Buyer I want to make sure that I get paid fairly for my services. Heck I can go sell them a new home and get z% plus a huge bonus. Why would I show them your listing only offering me x%?

"Broker Bryant how do we do this without harming our Buyer? If the property is just right for my Buyer then shouldn't I show it to him no matter what the co-broke is?" Well that's a good question. The answer is YES. Your job as a Buyer agent/broker is to find your Buyer a home that meets their needs. The commission should NOT come into play.

Do I have you confused yet? First I tell you, "you don't have to show them" then I tell you, "you must show them". What's up with that?

What's up with that is the good ole' Buyer Broker Agreement(BBA). Folks, you really only have two choices. You can show your buyer EVERY listing that meets their parameters, whether they offer x%, y%, z% or 100 bucks. You cannot eliminate any of them. OR you can discuss with your Buyer up front how you get paid and what your minimum fee is. Then put it in writing and have him sign it(BBA).

I know what quite a few of you will say, "I already show my Buyer every property regardless of the co-broke." Do you really? Do you show them FSBOs? Do show them a listing offering you $500? Are you really willing to work for that or are you kidding yourself?

Folks, in order to do the best job for your customer/client, the commission needs to be removed from the equation. The only way to do that is to discuss commission before you go to work and have the Buyer agree in writing on what you are willing to work for. Then, when you see a listing with a less than adequate co-broke, just ask the Buyer if he wants to see it. That's it. It's not that difficult and it holds you out as a true professional.

One more issue to clarify. As a REALTOR® it is against our Code Of Ethics to use a purchase contract to negotiate a higher co-broke. You can't do it.

Again you have two choices. First, you can negotiate a higher co-broke PRIOR to showing the property. Make the call. You never know.

Secondly, if you have a signed BBA, the Buyer can ask the Seller to contribute towards your agreed upon commission. Or he can just ask the Seller for a closing costs contribution. The difference between your agreed commission and the co-broke is a Buyer closing cost and the Seller can contribute towards it as part of the purchase agreement. Very simple.

So that's it, Broker Bryant's crash course on co-brokes. What do think? Will this help you to up your game?

Below are a few of posts on BBAs and how to get them signed. Hope this helps. You knew I wouldn't leave you hanging didn't you?

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