doesn't the mls prevent Agents from listing lower commissions than the standard 3%?
No. The Multiple Listing Services (MLS) cannot legally control and/or mandate specific agent commission or pay. The MLS has “not for public viewing” sections and these private broker, agent-only areas, are where commission and other side agreements are stated. Agents are absolutely allowed to post flat-fees and discounted percentages in these private sections. Most MLS only stipulate that something must be entered in these fields. It can be $1.
Don't some other real estate companies not allow their agents to agree to lower commissions?
Some agents might tell you this, and if it is true, it is illegal. Saying that "no one in our company is allowed to agree to lower commissions" is an easy way for agents to pass the buck and avoid a challenging conversation. Brokerages cannot legally control or mandate fee structures for their independent-contractor agents. That would be collusion and price fixing.
Aren't real estate agent fees industry mandated? and isn't it illegal to change them?
No and no. Price fixing is illegal! The industry and its national associations cannot legally control or mandate fee structures for their independent-contractor agents. Doing so would also constitute collusion.
is it true that buyers' agents are not allowed to lower their commission?
No. Buyers' agents sometimes claim that they are not allowed to lower their commissions, and thus, if a seller is offering less, the buyer must cough up the difference. However, this claim is wrong. Nobody can legally control or mandate fee structures for an entire industry. Once again, this would be collusion and price fixing.
As a seller, if I offer less than the "standard" commission, won't buyers' agents refuse to show my home to their clients?
Sadly, some agents are unethical and dishonest, at times going out of their way not to show homes offering lower commissions. Fortunately, these agents make up a small percentage of the population, as most understand that they have a fiduciary responsibility to put their client’s best interests above their own. Subversive agents are easy to identify as they often want to avoid talking about commissions at all costs - specifically, when asked to explain how they will earn the traditional 3%.
Don't I get better service if I am paying more? Isn't it true that you get what you pay for?
Although you generally get what you pay for, when it comes to real estate agent services, you need to ask questions such as: "what services am I getting for my money?" or "how many hours does it take to complete a real estate transaction?" We asked ourselves these questions and realized that traditional real estate fees are highly inflated. In fact, they are significantly higher than standard attorney hourly rates! When your average agent is only doing two deals a year, it's no wonder they have to charge so much.
Regardless of price, we at Treo offer the highest quality service you will find anywhere. For each of our clients, we have a full team consisting of a lead agent, transaction coordinator, and real estate attorney. Our teams consist of highly-skilled, professional individuals who provide the ultimate customer satisfaction. In fact, we are so confident you will be pleased with our service that we don't require any term contract or up-front fees. Let us prove our value to you - risk free.
I've been told by other real estate agents that the money from deals they close has to cover all of their work done on deals that do not close, is that true?
This is just plain silly. Why on earth should you have to pay for the work your agent does for other clients? We don't believe in this illogical theory and that's why we seek proactive buyers who are ready to purchase and already have a good idea of what they want. If other agents are dealing with an eternal buyer then we are willing to listen to why they deserve more. It's that simple.
My agent can't afford to discount his or her commission because his or her broker takes a 40% cut, is this true?
This might be true, but don't let an agent's fee arrangement cost you money. If he or she chose a brokerage with high expenses, that's not your fault, and you shouldn't have to pay for it. Your agent should work for you, not their brokerage firm.
Why is there a standard real estate commission?
The real estate industry has worked tirelessly over the years to protect the almighty 6% "standard" commission. Worse, they have made many silent deals and “agreements” to block anyone who threatens their high fees. This happens at all levels. It starts with two or three agents standing around the office water cooler whispering about not showing discount-commission houses. But it is only a matter of time before the market rejects this archaic model.