Real Estate Mailbag: What to Do When Agent Won’t Budge On Commission?
Robert J. Bruss, an attorney and real estate broker, answers his readers’ questions in a syndicated weekly column. In his most recent Q & A piece, Bruss addresses two particularly topical issues in a market replete with stagnant home sales and fluctuating Florida mortgage rates: real estate brokers’ commissions and the cost of building materials.
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Q: I liked your suggestion a few weeks ago to sell your home in a slower, buyer’s market by increasing the sales commission to 7 percent – with 4 percent going to the buyer’s agent who produces an acceptable buyer.
However, when I told my real estate agent that I wanted to increase the commission to get my property sold, she said, “My broker will not allow it. He says it’s not fair.” Is this legal? Am I stuck with my listing agent for another 60 days until my listing contract expires?
A: I am shocked. That is the first time I have ever heard a real estate broker refuse to raise the sales commission.
Variations include offering buyer’s agents incentives, such as the home seller’s car, a Hawaii vacation trip, and various other items to sweeten the deal and get a property sold, especially in a buyer’s market. Upping the sales commission to the buyer’s agent is merely a variation of the incentives that have been used for years to get homes sold under slower market conditions.
I suggest you contact the broker and discuss the problems: why your listing hasn’t sold and why the broker opposes raising the sales commission for the buyer’s agent to 4 percent. That is a great incentive to encourage buyer’s agents, through the local MLS (multiple listing service), to show and sell your property to their prospects.
Maybe the broker misunderstood and thought you wanted to cut the commission to 4 percent. Unless his response is satisfactory, ask him to cancel the listing so you can switch to a more effective listing agent.
Q: Is this a good time to build a custom home? Should you wait for the cost of materials to decrease? We understand there are reasonable home prices on the market today.
A: Don’t expect the cost of materials to decrease anytime soon. Building a custom home and buying undeveloped land is usually considerably more expensive than buying one already constructed. In most areas, home builders are now offering fantastic bargains and buyer incentives due to excess inventory.
