The Honest Broker: What should you expect from a realtor?
BY: DIANE LOTT, BROKER PARADISE FOUND REALTY
First, the realtor and company you choose to work with are obligated to work for you and in your best interests. This is established in the National Realtor Associations’ (NAR) “Code of Ethics”. All realtors are required to receive continuing education on what their duty is to their clients and customers.
Primarily realtors pledge “to protect and promote the interests of their client…however, it does not relieve REALTORS of their obligation to treat all parties fairly.” In other words, the realtor cannot disclose what you are “willing to pay” (buyer), or what you are “willing to take” (seller) in contract negotiations. However, in dealing honestly with all parties, the realtor cannot withhold known information that would adversely affect the value of the property. For example, if there’s a foundation problem, geographical issue, etc., then it must be disclosed to anyone interested in the property.
Secondly, ALL commissions are negotiable; they are not set by any individual, company, or organization. When sitting down with an agent to discuss selling your home, any “negotiated” commission must be accepted by that agent’s broker. Traditionally, commissions are between 5-6%, however, the parties can negotiate a better rate.
How is the commission paid out? How much does each side of the “deal” make? The percentage that is agreed to is then split between the offices of the buyer’s broker and the seller’s broker. In essence, if the agreed commission is 5%, then each office receives 2.5% each. Then the listing agent receives their agreed-on percentage of the 2.5% with their broker, the same for the buyer’s agent.
This is a good time to discuss the difference between a realtor and a broker. Both people are licensed in their state to conduct real estate transactions. The licensed realtor works under a licensed broker who has an advanced knowledge in real estate law and can own, coordinate, and run an office independently. In essence, the broker “owns” a listing when his/her agent works under their license and secures the listing. If the agent changes offices while a listing is active, the listing remains with the first broker.
Diane Lott, Broker
Owner: Paradise Found Realty
Paradise Found Realty, Inc. of Palm City
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