| THE Daytona Beach Real Estate & Community Events blog. By Lisa C. Hill, "THE SMART CHOICE!" |
I recently wrote a blog post about...
- A house I just sold that was in horrible disrepair
- The worst listing agent I've ever encountered.
These were both part of the same post and transaction. I mentioned that I would soon be writing a post with details about the listing agent (sans his real name). But I'm not even to that point yet because I just discovered he had the nerve to short my commission check. I was pretty sick with some sort of virus for over a week, so today I finally went to pickup the HUD-1 (closing statement) and check. Surprise, surprise. My commission check is short.
Thankfully, the way the transaction transpired, right from the start I suspected the possibility that things could get worse, so I took extensive notes, kept every e-mail, and most importantly, I printed the MLS listing sheet which has the commission amount on it.
Now, to go over some overall pertinent facts, and some details about the transaction.
- When I first showed the house, the MLS showed the commission to the selling agent as an amount which was quite a bit lower than the average for our area.
- All commissions are negotiable, so if the seller wants to offer a much lower commission than the competition, he or she has every right to do so.
- Although the seller has the right to offer a lower commission, many agents will not show the properties that offer lower commissions.
- Obviously, I was showing the property regardless of the commission, because it's what met the needs
of my buyer.
I want to make it clear that I do not condone agents showing only the properties that net them the highest commission. We're supposed to work for the client. So we should show them every property that meets their criteria. Unfortunately, many agents are not diligent in putting the clients' needs before their own.
Why did I explain all that? It's simple. I needed to set the stage for some of what occurred. I'll start from the beginning, but I'll be skipping over a lot. The purpose of this post is to educate people both in and outside of the real estate industry of...
- The unethical behavior of some real estate agents
- The likelihood that you won't know in advance, about the agents who may very well be known as top producers, that can be the biggest offenders of real estate law, the REALTOR® Code of Ethics, or even doing what's best for their clients.
- The way our Code of Ethics and (Multiple Listing Service) MLS rules call for some situations to be handled.
So, to start from the very beginning, I had a buyer who found my web site 3 years ago, but had several properties to sell before moving to Florida... Fast forward to now, when her last house finally sold, and we're standing in the house (in the Daytona Beach area) she is most interested in buying.
While we were in the house, my buyer started asking a lot of questions which only the listing agent could answer, so I gave him a call. (Now bear in mind. This IS a top producing agent! I'm afraid this post is going to make you think twice before you ever again assume that "top producer" is synonymous with "best service" or even "most knowledgeable".) It turned out that this agent had never even been inside the house, although it was on the market for 2 years. (That could be a whole other blog post.) As I already stated, I previously discovered that properties listed with lower commissions were less likely to be shown, which means they're highly unlikely to sell. So when my buyers asked why the house had not sold, we discussed the most obvious reason, which was the horrible condition of the house, and I mentioned what I had noticed with my own listings that offered lower commissions, and how much longer those sat on the market, as
opposed to the ones that offered higher commissions. (I actually tested this theory. It's sad but true.) However, it is completely against the law to "price fix", which is why all commissions are negotiable. So, although there are many brokerages and REALTORS® who will not list properties below a certain percentage, and many agents who will not show the MLS listings with lower commissions, the sellers still have the right to attempt a negotiation of the commission. (Now stay with me a little bit longer because this next part is important.)
Real estate agents, their clients and potential clients are free to negotiate commissions amongst themselves. However, since there are laws against price fixing, REALTORS® from differing real estate brokerages should avoid discussing anything remotely along the lines of what their "usual commission" might be.
One exception I've seen is when when a REALTOR® from another brokerage attaches an addendum to a contract, requesting a higher commission for themselves, than what is being offered in the MLS. I've never known this scenario to be taken up on a legal level, so if you're a REALTOR® who has knowledge of any legal proceedings under these circumstances, I'm curious to know of any court or panel rulings. As far as I know, it seems to be a grey area.
However, my buyers knew that this house had been on the market for 2 years, and even to the naked eye, it obviously needed a LOT of help. And they wanted some more specific answers.
So I asked the listing agent for his opinion on why the house had not sold yet, and several other questions my buyers were asking. (They were standing right in front of me, continuing to ask more questions.) It didn't take long to realize this agent had never been in the house. At some point in the conversation, as the agent's answers grew shorter and shorter in his attempt to get me off the phone, I mentioned to this listing agent, the conversation that I had previously had with my buyers, about some agents not showing houses with lower commissions. I then cracked a joke about me obviously not being one of them! But during this part of the conversation the listing agent suddenly gave me his attention and asked what commission was on the MLS printout. When I told him the amount, he told me that was wrong, and then told me the correct amount, which
was a full percentage point higher. He also said he would have it corrected in the MLS, immediately.
I'm now going to jump forward, past all the extraneous drama that accompanied every single day of this transaction; since I'm still mentally exhausted from dealing with this agent; and relay what happened this morning, when I discovered that my commission check was short. Knowing how condescending and difficult this agent was, I was not looking forward to calling him, but hey, his brokerage owed me money. So I made the call and told him my check was short. He then said it was not short, because when I showed the house it was lower. So I reminded him that he told me that was a mistake and that I had the corrected version of the MLS printout, which was dated 2 days after the contract date! His next excuse was to demand why I was calling a full week after closing about this. I then had to inform him that I had been sick and had not left the house in 9 days. His next response was that it was on the HUD-1 and I signed off on it. So I now informed him that I had not signed anything since the entire closing for both the sellers and buyer had been a mail-away. He then repeated everything again. At some point I told him that everything he had to say was irrelevant because the MLS rules are very specific. Whatever the MLS states is the commission to the selling brokerage, is the amount they're required to pay. His final statement was that he was going to contact the title company and let them sort it out. My final statement was to not bother calling them. I'd be going through the proper channels by contacting the Board of REALTORS®. I then called my manager, made photocopies of everything for her, and now she or our broker will be handling it with his broker. It may end up in arbitration through the Daytona Beach REALTOR® Association. But I know without a doubt that I'll receive the remainder of the commission that he tried to take from me. All of his reasons and excuses are completely irrelevant because the rules are crystal clear. Whatever commission is stated in the MLS is the amount that has to be paid. Oh, and when I checked again I discovered the commission had been changed again. I guess it's a darn good thing I printed the MLS sheet with the correct commission when I did!
You can read more about the house itself in my post titled "Would You Buy This House?" and a follow-up post titled "Real Estate Takes A Moment of Mourning".
Learn more about REALTORS®, real estate and the Code of Ethics
View Daytona Beach area listing MLS videos

