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REAL ETHICS by Steve Stazel | March 2007 | Index of all Real Ethics columns
Before you show the property;
before you write the offer
Where is it written that a co-op compensation has to be any particular amount?
You’re right; it’s not written anywhere. Don’t ever assume what amount a broker is offering for cooperation. Remember...the co-op is determined by each listing broker and seller independently.
Let me quote a part of Standard of Practice 3-1: “Terms of compensation, if any, shall be ascertained by cooperating brokers before efforts to accept the offer of cooperation.” In layman’s terms, you had better know how much co-op compensation is being offered BEFORE you set the showing. Never assume anything. If you do not like the co-op being offered, you can always try to negotiate a different co-op BEFORE showing the property.
Before you write an offer, do you check the MLS to see if this particular listing has a variable rate commission?
I think you should and here’s why: As you know, a variable rate commission usually means that the seller will be paying one rate if the sale is made by a cooperating broker and a lesser commission will be paid if the listing broker brings the buyer to the property.
If two offers come in at the same time and one offer is written by the listing broker, can you see that the buyer working with the other broker is at a disadvantage? The reason for this is that the seller will net more if they accept the offer presented by the listing broker.
If you are NOT in the habit of ascertaining whether the property your buyer wants to make an offer on has a variable rate commission, consider this: Is it possible that three or five or ten years ago you wrote an offer that was not the offer which was accepted? And the reason yours was not accepted was that the other offer was presented by the listing broker and a variable commission was in effect?
You will never know if this happened to you. That’s because you DID NOT ASK. How many deals have you lost because you did not ask? Prior to writing an offer, I think you should always check the MLS to determine whether that listing has a variable rate commission. If it is a variable rate, be sure to read Standard of Practice 3-4.
Each month, the Aurora Association of REALTORSŪ Web site features Real Ethics,
a column by Steve Stazel devoted to explaining Code of
Ethics issues for members. A REALTORŪ since 1974, Stazel is a Professional Standards
instructor and senior Ethics
instructor for the Colorado Association of REALTORSŪ.
If you have an ethical concern or an issue you would like
to see addressed, please call Stazel at (303) 773-3333 or e-mail him at
stazels@msn.com. The comments of this article reflect the understanding and
opinions of the author and do not represent an official expression of policy by the National Association
of REALTORSŪ.
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