“Real estate compensation structures are wrought with problems, which could be effectively eliminated if the MLS-mandated offer of compensation were done away with.
Agent compensation is set by office policies that support a specific company’s fee philosophy and income. But the system doesn’t take into account how it affects consumers’ opinion of value received or how it can clash with other companies’ compensation policies.
These policies also contribute to uneducated agents blacklisting certain properties—either intentionally or unintentionally.
One major contributing factor to the compensation problem is that a buyer’s agent is paid according to the selling agent’s office policy. This totally disregards the buy-side agent’s office policy on compensation, the buyer’s contract with his agent and the seller’s best interests, which are to remove any barriers that may keep potential buyers from seeing their home.
One problematic result of the mandatory unilateral offer of compensation is the belief that the seller and his agent are the ones paying for the buyer agent’s fee. In reality, both the seller and buyer agents’ fees come from the negotiated sale price, and are deducted from the proceeds Continue reading this post