As with all blog posts from me, comments are welcome--especially welcome on this post. I am a full-time Fremont-Newark-Union City Real Estate Broker, http://www.tricityhome.com and I work hard in the office, on the phone, face to face and on the Internet. You probably work hard in your profession too.
BUT--Can I have some of your salary if I ever need your services?
No? Why not?
I have been asked to give away some of my commission from time to time since I started real estate in 2000. Perhaps it is just part of the business. But why? Do you ask a lawyer to lower their retainer? Do you ask the accountant to credit the expense column in your favor? Surely not!
Lately, buyers and sellers have been asking for significant portions of my commissions on a regular basis. I cannot discuss commission rates due to laws governing the subject, but I believe my skills, and knowledge of the real estate contract and the skill sets I possess in negotiating sales and the like merit my pay as well as other agent's and broker's pay. As awful as that may be, still another person has been asking for my commission as of late. Can you guess who it might be? The Home Owner's Association in a short sale of a condominium, that's who.
I have a short sale in Fremont that has been, for reasons beyond the scope of this post, in escrow for 1 year now. Now that we are on the very cusps of closing escrow, the HOA (of all people) wants me to "pitch in" in order to settle an assessment that is due upon the sale of the property. Whaaat?
Here is the math:
My pay on a successful close of the above-mentioned property is $6600 divided by 12 months of calling, disclosing, coordinating, compliancing, faxing, emailing, logging, filing, problem solving, driving, (my job) equals $550 dollars a month. Only if it closes escrow.
Another property in the same boat is $1060 divided by 10 months of the same equals $1060 dollars a month. Only if it closes escrow. And believe me--they do not always close escrow.
Asking for a piece of the broker's commission will never stop because that's how it is set up. It is illegal to fix a commission in real estate understandably, and brokers must disclose that commission is set by each individual broker and that it is never a "standard" rate. It keeps it competitive. So, in a sense, we advertise that our commission is negotiable. But what a broker can do is simply say, "no" when asked to "pitch in."
The reason why I and other brokers give their commission when they really should not (myself included) is because we work very hard and only get paid at the end of a successful close of escrow. The threat--if you will-- of losing all that hard work unless a little or sometimes a lot of commission is given away is the only way to get any money at all. I guess it is human nature to be so bold to ask for a piece of the broker commission. The only way for it to stop is for the broker to simply say, "no" and suffer any consequences that may fall.
In a moment, I will try to ask for a piece of my dentist's fees today when I go get my teeth cleaned. I will report back to you.
A few hours later
She said, "no." By Jeff Pereyda