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Should Agent Commission Splits Be Public Record?

by Peter Thomas Ricci

Agents never publicly disclose their splits, but should that change?

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Howard Schultz, the famed CEO of Starbucks, recently proclaimed that “the currency of leadership is transparency,” and his comment snuggled up quite nicely with what is a new trend in business circles. The Economist writes articles about “the openness revolution”; new studies proclaim the ethical and profitable nature of transparency; and businessmen like Elon Musk release all their patents to public scrutiny.

Yet, amidst that swelling of openness and transparency, real estate remains a relatively secretive, secluded industry, and a recent story over at Realtor Mag perfectly spotlighted the divide.

In short: Trelora, a Denver-area brokerage, launched a searchable database last week that allows consumers to see broker commissions, via information from REcolorado, the area’s MLS; problem is, REcolorado thinks that publishing commissions is against agency rules, and it has ordered Trelora, via a cease-and-desist e-mail, to shut down the database, lest the brokerage be fined, suspended or terminated altogether from its MLS feed. Trelora has until 9 a.m., Feb. 13 to respond.

According to Realtor Mag, Trelora’s attorneys are crafting an official response, but the brokerage struck a defiant tone in a statement to the Business Journal.

“REcolorado, acting as a monopoly of home listings in the Denver metro area, has chosen to block homebuyers from viewing critical information necessary for making wise financial decisions in a hot real estate market,”  the statement read.”Commissions for buyer’s agents are chosen by sellers and the sellers’ agents and imposed upon buyers. Trelora simply wants to allow buyers to see how much commission has been committed to their agent on each home for sale, keeping them in full control of their home buying process.”

This got us wondering – with the business community embracing transparency so vigorously, is it only a matter of time before commissions become public record? before they become another detail consumers gauge before deciding what agent to work with?

What are your thoughts on the matter? Let us know in our poll below:

Should an agent's commission be posted publicly?

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Comments

  • David Hackiewicz says:

    Presenting what the buyers side is all that should be important.

  • Jay Siegall says:

    Buyers should be entitled to the information “if they ask”. Since the MLS is merely a clearing house to facilitate sales much like the stock market and the buyer IS NOT paying the commission there should not be a general posted disclosure. It would not likely be accurate anyway as in my case I frequently make adjustments or give seller or buyer rebates based upon circumstances and such commissions may vary WIDELY from any generally published data! And this could get very complex since there is NO FIXED rate of commission! In our MLS rebates etc are to be disclosed to all partues in the transaction. If an agent pushes a customer toward purchase of any listing which offers a bonus, the agent should disclose the bonus! JAy Siegall, Sun Realty USA Naples-Ft Myers, FL

  • John J says:

    Lawyers are the biggest problem in this country. Frivolous law suits cost American consumers approximately 8 to 10% more in goods and services prices, yet nobody will put the clamps on these crooks. The reason for this is that lawyers run this country and you always take care of your buddies. If you look at licensing requirements, whether in real estate, financial services and many other areas requiring licensing, the lawyers always seem to get a pass. Why is this? I have already stated the reason. They take care of their buddies.

  • jeff stainer says:

    Clients paychecks on not posted on the internet .. why should ours.

  • Gy says:

    the general public views that as their money as it is. That dollar amount would really create a mess.

  • Joe Pokorny says:

    yea they should be posted so everyone will know how much all the other thieves make who had nothing to do with the sale and then people will know what a crooked and dishonest racket real estate really is…. .everyone gets overpaid except the agent it is ridiculous!!!!!!!!!!!!!

  • Kim P says:

    The public can see what my split will be, when they start paying me by the hour for all of the upfront marketing expenses. Ask me what it cost me to try to land you as a client, before the average check is split four ways. Which by the way should be considered as this is probably the only industry where you go to work for 3-6 months with the hopes of getting paid and everyone wants to take a piece of the check before you get it’!

  • Tina Noble says:

    I feel the splits should be a private matter between the broker and their managing broker. Splits vary depending on a person’s experience, dedication and expertise.

  • Jackie Reed says:

    If every profession that pays commissions discloses publicly what they pay their employees or independent contractors individually, then it would be fair to publish commission for real estate agents. Seems like rules are always different in our real estate industry than in other industries. Somehow not fair.

  • Andrew S-G says:

    Would the large number, and value, of uncompensated costs, dues and expenses for each agent be compiled and posted along with the split? Of course not, so the general public would have an extremely skewed view of the commission and what costs are actually involved in facilitating a transaction, let alone the frequent four-way split that occurs with commissions. When an agent rebates for dual agency or to make a close deal close, would that be explained, or would clients simply expect some sort of discount on every deal? Exactly. Commissions would skyrocket so that they could be discounted to market value, and then watch the general public’s attitude towards the industry…

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