Variable Commission Agreement


If you are a buyer who works with a real estate agent and is interested in a real estate, you may want them to know if other contract proposals are at stake and, if so, it is from the same real estate authority (designated broker) or a duale agency situation in which the seller has the buyer. If so, it is important to check and see if there is a variable commission in the game, and if so, what is the difference in the commission. This requires a simple phone call, email or text from your agent to the seller`s agent, and the code of ethics requires the seller`s agent to disclose this information. Your second point is also an illusion. Since the listing agreement is a contract between the seller and the broker, the seller is required to pay the agreed commission regardless of the buyer`s origin. If a buyer contacted the seller directly and acquired the property without a broker, the unfortunate seller would be required to pay the full commission in accordance with the listing agreement if a buyer contacted the seller directly and acquired the property without a broker. This is the “Hogger” above, in which the agent of the list keeps the entire commission to himself. As mentioned above, the seller`s representative must disclose that a variable rate commission is at stake for all other brokers. In many cases, this is done directly in the multi-list system. When the seller`s representative proposes a variable rate commission plan, the discussion focuses on the commission that the agent charges to the seller if the agent is the one who brings the buyer. As with all real estate commissions and fees, they are negotiable. For our example, the broker and seller agree to a 5% tax if the real estate agent brings the buyer. This type of agreement is called a duale agency or designated.

With a duale or designated agency, the seller`s representative now also represents the buyer and must be disclosed and agreed by the agent and seller when listing the house. Monty`s answer: your agent is right. The rules for variable rate commissions are in the realtorĀ® code of ethics. Here is the relevant language that is removed from a longer statement of the code: “REALTORSĀ® who act as stockbrokers have a positive obligation to disclose the existence of commission agreements at two or at a variable rate. The stockbroker, as soon as this is the case in practice, reveals to the cooperating potential brokers the existence of such agreements and, at the request of the brokers who cooperated, dividing the difference that would lead to a cooperative transaction or the efforts of the seller. If the cooperating broker is a buyer`s representative, the buyer`s representative must pass this information on to his client before the client makes an offer to purchase. If the listing broker has a variable rate commission at the time of listing, it should be identified as such in the MLS. It should be commissions that save you money, right? No no. Unless the contract is otherwise available, your agent can keep the entire commission to himself! This type of gale is called “Hogger” by real estate agents, and they are more than happy to have one! As far as I am concerned, I and my company do not practice a dual agency, and I always offer a variable commission rate on my offers. The result is that my sellers keep full representation and pay a lower commission if the buyer does not have an agent.

Variable commissions are also called two-rate commissions. The terms are used interchangeably. There are millions of home sales that could be tied to variable commissions. Keep reading to find out why no one knows the answer to your question. Thank you for your comment. They are on track for a variable rate commission to come into play only if there is only one agent – (the seller`s agent). However, it is wrong to believe that the seller`s representative must necessarily act as a double agent in cases where the buyer is not represented.