Brokers have a statutory requirement to serve the best interests of their clients, whether buyers or sellers. That it is unethical to operate otherwise is another consideration.
Yet there are brokers out there who seem more concerned about their own welfare than that of their clients. Those are the brokers who shrink from sharing commissions. They shun co-brokering, splitting the commission with the broker who could produce a ready, willing and able buyer, as a recent post in TheApplePeeled.com reminds its readers.
The dollars can be considerable. Let’s say there is a $1 million apartment for which the seller has signed an exclusive contract with a broker who agrees to a 6 percent commission, or $60,000. If the the listing broker can sell the unit without the assistance of a buyer’s broker, the fee grows from $30,000 to $60,000. If the listing broker receives from his or her brokerage 50 percent of any commission, the numbers drop to $15,000 and $30,000.
So, the incentive is high to hold a listing close to the vest.
The ways of achieving that goal include the following tactics:
- Failing to list the property on broker databases in violation of their policies, in other words, a lapse known as a pocket listing;
- Failing to respond promptly or at all should other brokers inquire about the property if it is, in fact, entered into databases;
- Responding to inquiries but making it next to impossible to schedule appointments;
- In the hope of securing a direct transaction–that is, one that maximizes the commission–slowing down the process if a represented buyer manages to see the property and then makes an offer;
- Failing to update any public listing when an offer is accepted or a contract is signed;
- Refusing to co-broke when a customer decides at some stages of a transaction that having independent representation is desirable, even though a buyer can, by law, request representation virtually at any time;
- Advertising the property determinedly on Web sites that are available to the public but not exclusively to brokers.
Sellers should not be blinded by a broker’s luster. They need to verify by checking with current and past clients that any listing broker who they plan to engage is honest and effective.
Stay tuned for one tenant’s first-person tribulations arising from a broker whose contempt for her client’s best interests is clear and indefensible.
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022