“Is it legal . . .”
It has been 9 years since I entered the real estate business and still I see things that just blow me away. Let me share something I ran across the other day.
It is my daily habit to look at every new property that comes on the market throughout the county. It keeps me fresh on the market and price-points. My next client could have a budget of $550,000 and what that can buy you in Mission Hills is very different than what it can buy you in El Cajon.
As I go thru the listings I look over all the information; list price, square footage, agent, confidential remarks, HOA, etc.
To clarify, as a REALTOR®, I access new listings from the MLS directly. The MLS (Multiple Listing Service) is where real estate agents input their listings. From there it is sent to 3rd party websites such as Zillow, Trulia, Realtor.com as well as individual agent sites.
Once on the MLS, every agent can access the information on each listing. The confidential remarks section is something for REALTOR® eyes only. It is meant to put in confidential information that the seller does not want shared with the public.
For instance, if the seller worked a night job and slept during the day the agent might write in the confidential remarks section; “day sleeper, no viewings until after 2pm.”
This is pertinent information to an agent who might want to show that property. But it is not something that should be in the public comments. It would be letting every thief in the area know when the home is likely to be unoccupied. So understandably it is not shared on any other site.
This is what I saw the other day in the confidential remarks:
“4% comm to BA w/ full price offer w/ no sales concessions. 5% sales comm to BA if offer is 5% above list price. 2.5% comm to BA on any offer less than $430k. Any negotiated Seller concessions after acceptance will be deducted from sales price & alter comm structure. Call LA prior to submitting offer.”
BA equals Buyers Agent. LA equals Listing Agent
4% commission of $430,000 is $17,200
5% over $430,000 is $452,631. 5% commission of that equals $22,631
If buyer wants to offer $425,000, the agent would get 2.5% or $10,625
How many agents are going to push their client to offer $430,000 and pocket the extra $6575? Or try to talk their client out of asking for any repairs (seller concessions) which would “alter the commission structure?”
As agents, we have a fiduciary responsibility to our clients, but this may be tempting to some agents.
There is a fine line between an incentive and a bribe.
Of course all my concerns are of no consequence if the buyers’ agent shows this to their buyer prior to writing an offer. I am not sure how many would do that.
Many might question is this legal? Yes. It is legal, I’m just not sure it’s ethical.
What do you think?
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