I was talking to a friend of mine this morning about an escrow of hers that closed a week ago. The seller was upside-down on his home but was prepared to bring cash to the closing table to get out from under his mortgage. The catch? He didn’t have enough if the full commission was included.Since the buyer came off a sign call, there was no second agent to pay. And so my friend, after discussing the situation with her manager, decided to reduce her commission to make everything work. The buyers were happy. The sellers were happy.It should have been a happy ending, right?
Well, not quite.
This seller happened to be a member of USAA and came to my friend through their MoversAdvantage program. (Disclosure: I am certified in the program for another 32 days – though I can’t utilize that certification since I left my former brokerage.) As part of the program, buyers and sellers receive cash back on their transaction funded by a 35% referral fee levied against the real estate agent.
For all the complaints about corporate relocations and other such programs, agents who work with these clients generally go in with their eyes open. We know what we’re paying out when the process starts. And so there was no problem there.
No, the problems came when it came time for the split that the brokerage takes from the commission. This company has one split for agent generated business and a 50-50 split on company generated business.
Logic would have dictated half the commission be paid under the agent split (for the buyers’ side) and the other half under the company split (for the sellers’ side.) Which it was.
Oh, but there’s also a standing company policy that says if a listing is taken under a pre-determined commission rate (which is allowable, incidentally), the split’s 50-50.
So by doing the right thing for her clients on both side of the closing table, my friend lost not only the additional commission agreed upon at the beginning but also another four figures to the company just because.
The company’s reasoning in a nutshell (paraphrased): “It’s not up to us to step in and make sure the owner can sell the house. If they don’t have enough money to pay everyone, that’s not our problem.”
Beautiful attitude, no? Really embodies the spirit of customer service. (Here’s hoping Ardell sees this as I know she’ll love that line from the company.)
Everyone wants a piece of the pie. Few actually care about the buyers and sellers involved. Relocation companies sure don’t. Third-party referral vendors don’t. Sadly, many brokerages don’t either.
It’s lonely at the front lines.