Dear Anne: Why the Fee Deduction on my Commission?
At closing, a listing broker received $250 off the top before commission money was distributed – a transaction fee, the agent said. Isn’t that unfair to the buyer’s agent and broker since it reduces total commission before any kind of split?
ORLANDO, Fla. – Dear Anne: My buyer closed yesterday and to my disbelief, the listing broker took $250 right of the top of my commission and kept it.
When I approached the listing agent he said, “Oh, that’s a transaction fee.” I said, “What’s it for?” He said, “I dunno!”
A real genius this guy. He said it was noted in the MLS, and I should pay attention to the offer of compensation next time.
This is incredible! I don’t like being ripped off. Can they do this? – I Want My Money Back
Dear I Want My Money Back: You’re not going to like my answer.
This is a business model for calculating commissions. Call it what you like – it’s still a business model, plain and simple.
In your case, if the “minus $250” was exactly where the clueless agent said it was, it is what it is. Within your MLS, it may have appeared in the commission field. Or, if the commission field doesn’t accommodate that information, it could have been stated in the broker remarks.
On the other hand, if the $250 wasn’t there, it would be another matter.
Therefore, it’s a good idea to print every listing to obtain a date stamp before and after you submit an offer. If the MLS did not mention a $250 fee, you now have proof on your side. I’ve said this before, and I’ll keep saying it: Make a hard-copy print of the listing.
You’re not going to like this either, but the listing agent has a point: You need to pay attention to the offer of compensation in the MLS. The listing broker can change that offer of compensation before you submit your buyer’s offer to purchase and still be in compliance with Code of Ethics Article 3, specifically Standard of Practice 3-2 which says:
Any change in compensation offered for cooperative services must be communicated to the other REALTOR® prior to the time that REALTOR® submits an offer to purchase/lease the property. After a REALTOR® has submitted an offer to purchase or lease property, the listing broker may not attempt to unilaterally modify the offered compensation with respect to that cooperative transaction. (Amended 1/14)
This means that if the offer of compensation is changed after your offer is submitted for purchase, the listing broker could end up before an ethics panel or arbitration tribunal or both.
Just because you’re not a fan of this method of calculating commissions doesn’t change the fact that the listing broker can use it. And if your broker files for arbitration for a “minus $250” that was actually on the listing when you submitted the offer, your request would likely be dismissed because you were paid exactly what the listing broker offered.
Anne Cockayne is Director of Local Association Services for Florida Realtors
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