From today’s Globe:
DEAR BOB: I liked your suggestion a few weeks ago to get a home sold in a slow 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 listing agent 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? Or am I stuck with my listing agent and her broker for another 60 days until my listing contract expires? –Pat C.
DEAR PAT: I am shocked. That is the first time I have ever heard a real estate broker refuse to raise the sales commission. As you know, that suggestion to raise the buyer’s agent commission received positive responses from several property sellers and agents in this column.
I don’t think the agent was trying anything fishy here. The agent wasn’t unhappy because his or her commission was going to be less than the buyer’s agent, but maybe, honestly, felt it wasn’t acceptable. Taking 7% of a seller’s proceeds from the sale is a bit high!
I also don’t think it will have any effect, really. You can say buyers’ agents will be more likely to bring their clients to the property, but I can tell you, I don’t even look at the commission structure, until maybe right before closing (or … when my mortgage is due …).
Of course, each agent is different. I don’t know.
I would suggest taking an extra 1%, in cash, and spending it in ways that bring in more business, not offer percentages here and there, if, and only if, the property sells.
Source: Not all real estate brokers favor raising commission – By Robert J. Bruss, c/o The Boston Globe