Royal Lepage True North Realty
What should Realtors do when friends or family members ask them to cut their commission when selling their house?
Fred Martens, a Realtor with Confederation GMAC Real Estate in Cornwall, P.E.I., points out, “This is very much an individual decision. My first response would be – would my cousin sign his next paycheque and let me deposit it to my account? This question goes to the heart of the profession of Realtors. Are we professionals offering our services for a fee? Do we treat our choice of work as a profession or not? We must make our family and friends aware that we are no different than them. Realtors have bills to pay. We have many duties to perform for our clients that cost us money out of our back pocket. This is the reality of the business and must be appreciated by the client though it may be your brother or sister.”
Tim Snow, a Realtor with Royal LePage Cavagnal in Hudson, Quebec, has made sales for friends and relatives at a reduced commission rate. He explains, “It is the choice of the agent on how much he wants to collect as commission. There is a big misconception that agents get the commission that is stated on a brokerage contract. Most of the commission is absorbed by the broker and his fees, the regional real-estate board, the provincial board where it applies and regulators that love to have all kinds of fees to charge.”
If you do cut your commission for your cousin Johnny, will there be anything left after you pay brokerage fees, office overhead and expenses, the buying agent's cut, automobile costs, referral fees, advertising costs, secretarial support, insurance and the myriad of other expenses that crop up? Can you afford to offer reduced commissions?
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