If they disagree with what you charge either you can negotiate the fee or the buyer can MOVE ON to another agent.

Simple.

It does not matter if you agree or disagree with any one agent’s policy. The market (consumer) will decide whether the fee is too high or not. If it is, they can just move on.

As another person mentioned, sellers (and buyers) often make illogical decisions to terminate a brokerage relationship and we are supposed to bear the cost.

When listing agents approached me in terms of reducing my commission to make a deal work, I pointed them to the ethics regulations and told them they were breaking them. I have made concessions to get to the closing table, but it is alway my absolute last resort, and usually happens about 30 seconds before the buyer or seller walks out of the closing for good.

I also like what Rob said – I was perfectly happy to list luxury properties at a lower rate, and NAR statistics prove there is no seller benefit to a higher comission to make it more attractive to agents. Having said that, anything below 75K or so I’d do a flat fee that is typically higher than 6% in order to make it worth both my time and the buyer agents’ time.

Navy Chief, Navy Pride

When I team up with another broker (generally from out of state) who is bringing the buyer, my Mutual Non-Disclosure, Non-Circumvention, Cooperation and Fee Agreement lays out the requirements and that broker is bound to get the same agreement from his/her buyer. In these economic times investor buyers are used to paying all or part of the commission especially if it gives them access to opportunities they would not otherwise be exposed to.

I won’t work with a buyer who won’t guarantee a minimum commission and has said out front they won’t sign an exclusive representation agreement. Instead, I use a MNDNC and Fee Agreement which binds them only to the properties I present to them. My specialization is to research and target off-market multifamily properties (not listed by another broker) and to make unsolicited offers so in order for this to work, I keep a log of what properties I present to whom and when.

My goal with each buyer is to be so good at what I do in my niche in my market (greater Phoenix) that even if another broker presents a property to the buyer, the buyer will request up front (before property information is delivered) that the broker work as a team with me. I am happy to collaborate with both local and out of state brokers. In commercial this works better than making a referral and depending on the other broker to get the deal done.

My suggestion to residential agents: charge investor buyers and charge second-home buyers. Decide if you want to even serve homeowners who are buying at the very low end. While home prices have gone down, except for screaming loss-leader specials, other prices have not. There are agents who have made a big business of volume at the low end. Leave that business to them.

Real estate is about the last bastion of 100% contingent compensation. Maybe life insurance? It can be a sucky, draining, anxiety-provoking model so one must do everything to protect one’s self in difficult times.

Given that, they (we) should stick to the plan on the low end as well.

I realize this does not add up because 6% of $25k is hardly worth anyone’s time, however it is often times the same amount of work.

So, if that’s not worth your time at your current station in business, then don’t go there. The market is efficient and someone will step in and take that business. Someone who needs it and wants it.

So, my vote is stick to the norm we created and only take business that makes sense for YOU.

Simple.