Tuesday, February 9, 2010

Real Estate Brokers Miss Their Shady Deals and Payouts

From the Charlotte Observer:

The presidents of the state's three largest metro Realtor associations are protesting part of a 2008 rule that requires buyer's agents to provide a written disclosure of compensation they might receive from sellers when a home is sold.

Real estate brokers are typically paid a commission, or a percentage of the sales price. Some sellers, particularly homebuilders, also pay agencies a bonus for finding buyers. Such extra incentives, which come in the form of cash, trips and gifts, are legal. Before 2008, however, an agent didn't have to acknowledge receiving those extra incentives until after the homebuyer had made a purchase offer on a home. Agents also were only required to tell the customer orally, making the rule hard to enforce.

The 2008 rule required that buyer's agents inform homebuyers of bonuses in writing - and before that offer is made.

Read the full story in the Charlotte Observer here.

One of the largest brokers in the state and a major force in Charlotte Allen Tate is unhappy with the rule which was prompted by an investagition that was started by the Observer in 2007.

Allen Tate has been raping sellers for years. By increasing the payout on Tate listed property over outside agencies Tate brokers have locked up the Meckburbia market. It's about time the big agents showed their true colors.

How the Allen Tate deal works:

Tate agents normally get a 50% payout on a deal. The commision is normally 6% split between the selling broker and the listing broker. Your broker with Re-Max and the Allen Tate broker spilt the 6% and each broker's "house" gets 1/2 of the 3%.

But Allen Tate gives their brokers an increased payout incentive to sell Tate homes over outside agencies. In other words if you are an Allen Tate broker you'll want to show your buyer an Allen Tate home before you show a Re-Max home because you get a bigger commision payout.

What this means to sellers in this market is..... if you want your home sold you would be crazy to list it with anyone but Tate. Because 2/3 of Charlotte's agents are Tate Agents and they will only show your house as a last resort. Tate's 1600 agents are showing thier inside listing first then the other MLS listed homes.

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