5 Reasons Why Your Commercial Agent is Costing you Money – continuedMarch 10, 2015
1. He won’t co-op (share) a commission. A property that is listed for sale by a realtor will include a commission that is payable to the listing broker (represents the seller) and the buyer’s broker (represents the buyer). This fee is normally paid 50% to each broker. However, the listing broker controls this split percentage. It’s wise to ask your listing broker, and get in writing in the listing agreement, the amount that will be split with another broker. Why does it matter? Well, several years ago, I had my eye on a particular property that my client was interested in buying. There was no sign on the property and I couldn’t find it in any listing services. So, I assumed it wasn’t listed by a realtor and I called the owner directly. To my surprise, a well known agent in town, had the listing. The reason he hadn’t advertised it? He was well known for not co-oping (sharing commission) with other agents. He wanted to wait until he received a direct call from a buyer so he could receive the full commission. There is no doubt that this is wrong and unethical on all levels. This agent is not representing his client’s interests, only his own. But, it’s more common than you might think. Watch out for these types of guys. He may have lost a lot of buyers because other agents can’t do a deal.
How do you avoid this pitfall? Make sure the listing agreement (the written agreement that gives the agent the right to market your property) requires the agent to share the commission and in what percentage. Secondly, tell the agent that you are wise to this tactic and will be on the lookout for such shenanigans.