Can You Share in Your Realtor’s “Bounty”?

I was reading a critique of the real estate industry not long ago, in which the author stated that clients (buyers specifically) pay close attention to how much commission their agents were being offered.  The author seemed to be implying that, since some properties offer bonuses and such to buyer’s agents, such agents may push them into certain properties regardless of their client’s wishes in order to secure said bonuses. 

 

While I can’t say that this never happens, I do like to turn the coin over and examine the other side.

 

I have often preached (seems like I’ve done it a lot recently) that if you do not trust your agent, you should not be using that agent.  That being said, since you and your agent know and trust each other, it is completely fair to ask an agent what the cooperative commission is on a property, and if there are any bonuses or extra commission being offered. 

 

The reason I bring this up goes to the Realtor Code of Ethics (a fascinating read if you are having trouble sleeping).  Basically, a Realtor cannot refuse to show you a property because it has a low cooperative commission offered, and cannot steer you to one specifically because it has a high co-op offered, or includes a nice bonus or incentive for the agent.  Realtors must always have the best interests of their clients in mind.  Therefore, if you feel you are being unreasonably pressured to put an offer on a property that does not suit you, either you and your Realtor are not on the same page, or, unfortunately, your agent may be concealing an ulterior motive.

 

Now, to truly look at the flip-side of this situation:

If you pick a property, and there happens to be a Realtor bonus or incentive, and your state allows it (I believe most still do), there is nothing preventing you from asking to split the bonus with your Realtor.  In many states, Realtors are allowed to give referral fees to non-licensed principals of real estate transactions (that would be buyers or sellers primarily).  Now, a seller doesn’t really benefit from this, because they already negotiated how much commission they are paying for this transaction.  But a buyer’s agent’s commission, as we have just learned, may fluctuate from deal to deal.  If there is more commission than expected offered, a buyer may ask their agent to participate in this surplus.  Be aware, however, an agent is free to say “no”. 

 

Also take the following into consideration:  Make sure this practice is legal in your area.  Make sure that such “referral fees” will not screw up your loan.  Ask how such monies must be reflected on your closing statement.  Etc. etc. etc… 

 

Just food for thought. 

Tags: buyers agents, commission kickbacks, listing agents, real estate commission bonuses, Real Estate Commissions, real estate referral fees, realtor incentives, steering