The Honest Broker
A Real Estate Blog by Diane Lott
Realtor Obligations, Commissions & Responsibilities
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 all interested persons.
Secondly, ALL commissions are negotiable; they are not set by companies or organizations.
When sitting down with an agent to discuss selling your home, any “negotiated” commission has to be accepted by that agent’s broker. 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.
This is a good time to discuss the difference between a realtor and a broker. Both of these people are licensed in their state to conduct real estate transactions. The licensed realtor works under a licensed broker who has advanced knowledge in real estate law and can own, coordinate, and run an office independently. In essence, the broker “secures” a listing through the agents that work under their license and if the agent changes offices while a listing is active, the listing remains with the first broker.
Diane Lott, Broker
Paradise Found Realty, Inc. of Palm City
Email: [email protected]
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