Kudos to Brahm Resnik for giving this story wider coverage: [Doom's own M contributed to this story.]
I was choking and sputtering when I heard this comment from Bob Bemis, CEO of ARMLS?
We don’t necessarily get involved in any of the business arrangements, or the business practices of our brokers.
If they don’t get involved in the arrangements or practices of agents, then why is it the policy of ARMLS that publicly displayed bonus information is considered "inappropriate language"?
Then you gotta love this exchange:
Bemis: Maybe we need to do a little bet job educating the public…
Resnik: Which could start with disclosing this..
Bemis: It could very well. Yeah, I don’t have an answer for you…
Bemis should have an answer for us. The answer should be that this policy is changed, and that all information pertaining to commissions and incentives offered will be made public in the listings.
The public has a right to know what they are paying for. In advance- not at closing.
Where can joe user see these comments?
Can someone that has access to comments tell me what they say about this listing?
MLS # 2784513
This is a bs news story produced to be inflammatory. A side deal occurs OUTSIDE OF ESCROW. If a seller wants to reimburse a Realtor with a bonus, that’s up to the seller. When the buyer signs the closing documents, everything is there for him to see. NEARLY EVERY business offers bonuses to salespeople. Should the auto dealers disclose bonuses to buyers? Should the woman at the cosmetic counter in Macys disclose spiffs? Gimme a break. There is nothing going on in secret here.
Agree with stevec. Buyers rarely see what compensation their REALTOR is getting until closings. Commission percentages vary too which no one mentioned in the report. This is why a buyer should ALWAYS negotiate a set percentage commission with his BUYERS agent before looking at houses. This way the agent knows he will be getting, say 3%, regardless if he shows you listings that offer 2%, 4% or extra incentives. A buyer should have in writing what the BUYERS agent will get in compensation and what his/her duties are.
“NEARLY EVERY business offers bonuses to salespeople.”
The difference is those are salespeople FOR THAT BUSINESS. A buyer goes in knowing the salespeople are trying to get all they can for the business.
If a seller wants to be his agent extra, fine. But if my buyer’s agent, who is supposed to be representing MY best interests, is being paid a huge bonus to steer me to buy a particular house or pay a specific price, then I need to know about it.
I completely agree with the village idiot here – an extra bonus or higher commission to the listing agent is one thing, but having the seller pay an extra bonus to the so-called buyer’s agent is entirely different. That is NOT the same as every other business.
The buyer will know to view a house and the things a Realtor says about it differently if he knows the Realtor showing it to him gets a special bonus versus other houses if he buys that one.
This goes to the very crux of the problem with the whole profession – the profound conflict of interest in having a “buyer’s agent” whose interests are in direct conflict with his client’s, and even more so where, as here, the nature and magnitude of that conflict is not only not disclosed to the buyer, but is both materially different than the standard arrangement and actively hidden by the so-called buyer’s agent and the seller.
Sorry to be the cause of your choking and sputtering.
There are two problems with TV news: is it doesn’t have enough time to tell the whole story and it is audience/advertising driven. I know because I worked in television business for 20 years prior to real estate. There is grim truth behind the adage “if it bleeds, it leads.”. Audiences watch controversy. News directors know it and look for it, and when it isn’t there they have been known to create it. Thus the birth of the investigative reporter.
No slam on Brahm Resnik here. He did his job well. He asked provocative questions and got answers interesting enough to make a story. But I do have an issue with the editing of the sound bite. They clipped the part of my answer wherein I explained that the role of the MLS is to serve the brokers and agents, not educate the public.
Indeed, we go to great lengths to avoid conversations with buyers and sellers because most already have fiduciary relationships agents and brokers. We risk interference with that relationship and potential legal liability whenever we talk to them. ALL communication has to go through the broker, often via the agent.
Should the buyers be made aware of all elements of the sale that affect them? Absolutely. Does bonus commission affect them? Potentially. (Certainly not if they have a buyer’s representation agreement with their agent wherein the agent declines all cooperative commissions and is paid per contract directly by the buyer.). Is it the MLS’s job to tell buyers what offer the listing broker made to other agents, whether or not it affects them personally? I think not. It is the job of the agent to inform and when needed to disclose all facts relevant to the transaction. By putting this info in the agent remarks, not the public remarks, we give the buyer’s agent options as to if and when it is appropriate to disclose this information, rather than make that determination for them. That’s the part of the agent’s business I was referring to when I made that comment.
One more thought. When the payment to a buyer broker depends on a percentage of the sale price, and rises as the buyer pays more, not less, for the home, how is that being fiduciarily responsible to the buyer client? This seems to me to be a more important issue than one very large bonus payment that could probably never be earned given the condition of the short close window.
Bob Bemis
ARMLS
You guys don’t get it. A side deal occurs OUTSIDE of escrow. This is fully disclosed on the paperwork. You don’t agree because you don’t like the way it is done. However, nothing is hidden. There are a variety of other sales situations where both buyer and seller have separate agents and the buyer’s agent gets a bonus from the seller. It occurs in collectible cars, expensive jewelry, art, horses or anywhere a buyer’s agent is doing legwork.
Oh come on – when you say “nothing is hidden,” you mean is in, specifically required to be not shown to prospective buyers from the MLS?
If your agent is urging you to buy a particular house over others because s/he gets an extra fee to sell that one to you, and you don’t know that (if at all) until you’ve already arranged financing and gone to a lot of other trouble and are sitting at the closing table, you have been materially disadvantaged by your so-called agent’s withholding information from you until the last second. Information which might change your decision-making process. At that point, your so-called agent is actively acting against your interest.
To say this is dishonest and distasteful is an understatement, and if you think that having your agent hiding things from you so that he can get you to the table and squeeze an extra buck out of you, is normal and good business, then you deserve the same from everyone who services you.