Divorced commissions come to Charlottesville!

I’ve been writing about Divorcing the Commissions for quite some time now, not quite as eloquently as Greg, but vehement in my advocacy nonetheless.

For the first time in the Charlottesville area, I saw this in the agent’s remarks in an MLS listing today: a Realtor is not offering a Buyer-Broker commission; the Buyer is responsible for paying their Buyer Agent, and the Seller is responsible for paying the Seller’s agent. Makes sense, no?

This is the listing, but the link will expire in ten days; here’s a PDF.

I can’t wait to hear what other (local) Realtors’ response to this news.

Update 03/08/2008: Rather than poke anyone in the eye, I have edited this post from the original. In the original, I quoted from the “agents’ remarks.”

Update 03/10/2008: To fully understand the concept of Divorced Commissions and the debate and fear surrounding the concept, start reading at BHB.

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  1. Pavel March 8, 2008 at 14:52

    Jim, Wow.

    Four things:
    1) I saw this listing too. The agent placed the remarks you quoted in “agent remarks” section of the MLS section, so is posting/quoting “agent remarks” on this public site defeat the purpose of having “agent remarks” in MLS? Section 4.0 (information for Participants Only) of CAAR MLS rules and regs: “Any listing filed with the Service shall not be made available to any non-Participant, without the prior consent of the listing broker.

    2) Pictures are of another “like” property and listing agent only disclosed that in the individual picture descriptions.

    3) By posting a blog entry about this property and providing a branded PDF of the entire listing to the public, are you not violating MLS rules and regs, specifically section 2.7 which states: “A property listed with the Service shall not be advertised by a Participant, other than the listing broker, without the prior consent of the listing broker.” Is blogging about another broker’s listing a form of advertising? I wonder what the official response from our Association would be.

    4) I look forward to seeing the progress of this listing.

  2. Jim Duncan March 8, 2008 at 17:35

    Pavel –

    Was your “wow” directed to the fact that we are witnessing progress in the form of divorced commissions our market or that I wrote about it?

    1 – I posted the public information sheet, rather than the agent full information sheet.

    2 – I don’t see the pertinence of this, if it’s the same information on the public site.

    3 – You’re absolutely right, and I didn’t explicitly consider the MLS rules before posting.

    As such, I’ve edited the post (but saved a screenshot for posterity).

    But – is a blog posting, with the disclosure that I am in fact a Realtor, substantially different than a link to the public mycaar.com site that has all of the information available in the PDF?

    That a Realtor is not offering a buyer-broker commission is news – big news, in fact. This post is arguably an example of how I (and other bloggers) are treading the proverbial fine line between journalist and Realtor.

    Is it safe to assume that this

    Is blogging about another broker’s listing a form of advertising? I wonder what the official response from our Association would be.

    is a precursor to an “official response”?

    Is this substantially different than someone selecting me as their “preferred Realtor” through mycaar.com and asking for me to send them listings? No agency involvement is created in that situation either. I send them listings branded with my information and not the listing agents’. Here I happen to be casting a wider net.

    Is a screenshot from mycaar.com kosher?

    4 – This should prove interesting.

  3. Matthew Rathbun March 8, 2008 at 18:14

    Wow, is right. I don’t know where to start… I am a huge fan of paying for the services you use. I think that eventually we’ll all be fee-for-specific-service and that probably isn’t a bad thing. However, the commission is already divorced from the commission in a “letter of the law” sense. If a Realtor was to be sued for not performing, they wouldn’t be able to use the excuse that they only did 75% of the work because they were only getting 75% of what they were “accustomed” to getting. Once I make a bilateral agreement to work with a client, absent any agreement to the contract, I agree to do so regardless of my commission or fees.

    Having yelled that opinion in an empty forest, let me say that Pavel has a very interesting quandary.

    I don’t have a clue about your MLS regs. MRIS requires that a buyer agent commission be stated or it cannot be entered into MLS. I am surprised that any MLS would allow a listing be entered without a co-broker fee.

    While in concept I agree with consumers paying for their own service, I think the Lister in this case may have an obligation under Article 1 to express to the Seller that by not offering a fee for the Buyer Agent’s service, there’s virtually no chance of a represented buyer coming to the listing. Therefore they have significantly increased the chance of Dual Agency (which I think is from the devil.)

    Since Jim is expressing this in the affirmative, there isn’t much of ethics issue (in my opinion – for what it’s worth.) If the agent remarks are the same as the public remarks than why not share them?

    Again I don’t know your MLS rules. Marketing another’s listing info? I don’t know is it the same info I could find through IDX?

    All in all, I think that sharing this information is great and finding a Lister brave enough to go against the norm is inspiring!

  4. Jeanne Breault March 8, 2008 at 18:53

    There’s nothing I can add that hasn’t been said. I, too, will be interested in seeing what happens next.

  5. Terry Smith March 8, 2008 at 19:37

    Well, I’ve been waiting for that one! As you watch the co-broke fee get lowered more often, say the last few years, this is a natural process.

    In Texas, we are a bit slower but have plenty of discount companies to deal with on the sell side. My buyers would not want to pay the fee, no matter what price point, but I think it’s coming.

    I have been posting open house and customer detail PDF files for awhile, and the consumers like it. That’s the way our MLS is intended to be used by our customer, through us. I made that up, but it sounded good.

  6. Joseph Ferrara.sellsius March 8, 2008 at 20:35

    It will be interesting to see the result. Will it be less buyers? Curious if others follow suit.

  7. Pavel March 8, 2008 at 22:21

    “Was your “wow” directed to the fact that we are witnessing progress in the form of divorced commissions our market or that I wrote about it?”

    Yes, of course, the first, Jim. I’m delighted you wrote about it and hope Dave P. does too. I can picture buyer agents going to their brokers: “how should we handle this one?”

    In my opinion, if someone posts a “featured property” on their website of another broker (through IDX this is done all the time) – your post is no different (be it PDF, mycaar link, etc.).

  8. Dave Phillips March 10, 2008 at 11:50

    I am surprisingly unshocked by this listing’s failure to offer Buyer Agent compensation. I am shocked that they offer Subagent (SA) compensation. I thought subagency was dead. Although most firms in the Charlotteville area still put compensation offers under “SA”, I suspect it is rare that anyone actually accepts that offer and performs in a subagent capacity. Hopefully folks haven’t been filling out SA because they think it means “selling agent.”

    The MLS rules require that you offer compensation to someone else. In this case, the listing firm has offered compensation to subagents, so this listing is acceptable. Compensation can be as low as a penny, so the obviously nominal SA fee is okay.

    Jim, you are pushing the envelope by publishing the agent view of the listing because there might be confidential info in there that the seller does not want to be made public (e.g., seller works nights or key under front mat :-)). I do NOT think there is anything wrong with blogging about this or mentioning what the agent remarks said about commissions. Agent commissions are not generally confidential seller information. Blogging about a listing is NOT advertising without permission per se, but there are some gray areas for our gray matter to consider.

    Matthew, does MRIS really require that buyer agent compensation be included? If that is true, I’m guessing they must have eliminated sub agency as a category. Interesting if true and probbly a good idea.

  9. Jim Duncan March 10, 2008 at 12:03

    Dave –

    Thanks for the comment. First –

    I never published the agent sheet. I quoted the remarks about the commission, which I then removed; but never did I (nor would I) post an agent sheet to a public site.

    Second, I’m very interested to see how this plays out. I know it’s happened elsewhere, but what if the agent puts $1 as the commission being offered to buyer agents?

    Will “buyer agents” black list the listing? Will some say that $1 is “not enough” to offer?

  10. Matthew Rathbun March 10, 2008 at 12:07

    Dave, the differentiation of the archaic practice of Sub-Agency is a valid question. I re-read the article (below) and you’re correct. The way I am reading it, MRIS would allow no Buyer Agency commission, but in fact would allow for Sub-Agency.

    Subscriber agrees that in connection with all listings placed in the database, the offer of cooperation and compensation to subagents or buyer agents shall be specified so that an MRIS® Subscriber shall know what the compensation will be. The listing Principal Broker Subscriber may offer compensation other than the compensation indicated on the listings as published in MRIS®, provided the listing Principal Broker Subscriber informs the other Principal Broker Subscriber in writing in advance. The listing Principal Broker Subscriber retains the right to determine the amount of compensation offered to other participants (acting as subagents, buyer agents, or in other agency or non-agency capacities defined by law) which may or may not be the same as the compensation indicated on the listings.

    Sub-Agency is potentially more litigious that most other agency types, so I hadn’t thought to read that part. For the most part and by far, agents traditionally put zero for SA in our neck of the woods.

    Does CVMLS offer commission for Non-Client status?

  11. Dave Phillips March 10, 2008 at 13:01

    Matthew, Yes, the CAAR MLS does have a non-agency category for compensation.

  12. Pavel March 10, 2008 at 20:07

    In my conversations with various agents in the last few years, I’ve discovered a good number of agents think SA stands for “Selling Agent.” Also, according to a few agents in Richmond, I understand some associations have decided to take “Sub Agent” field completely out of the MLS system.


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