FAQ – “My buyer wants to make an offer on a property listed with a discount brokerage offering $1,000 to the buyer’s agent. Can I put a clause in the contract asking for my full fee?”
In this video Steve Jamieson, Managing Broker of RE/MAX Crest Realty Westside, explains the procedure for a buyer’s agent to negotiate their commission with the seller.
Here’s a brief summary:
YOU are NOT a party to the contract
Yes, you may negotiate your fee for service, but it must be done in a specific way.
Remember, YOU are NOT a party to the Contract of Purchase and Sale.
The contract is between the buyer and the seller, and you may not insert yourself.
Step 1 – Get your buyer’s permission
If you are using a Buyer’s Agency Exclusive Contract, include the following clause in Schedule A:
If the compensation being offered by a Listing Brokerage or a Seller to the Buyer’s Brokerage is less than the compensation agreed to by the Buyer and the Buyer’s Brokerage then the Buyer’s Brokerage is hereby authorized to modify the offered amount of compensation in the terms of an offer to purchase.
If you are not using a Buyer’s Agency Exclusive Contract, then there is a Buyer Agency Remuneration Agreement on WebForms.
Step 2 – Add the clause to the contract
The Parties to this Contract of Purchase and Sale agree and direct that the purchase price includes the payment of commission to the Buyer’s agent (payable by the Seller) of _____% of $100,000 and then _____% on the balance of the selling price plus GST. The Buyers acknowledge that they have authorized the cooperating Brokerage (RE/MAX ___________________) to modify the listing brokerage’s (name of listing broker here) offer of compensation in a separate written document.
Step 3 – Let the listing agent know that you have added a clause asking for your full fee
This can be via email, a text message, or a phone call, but it must be done BEFORE you present the offer.
It is very important that the procedure be followed correctly.
Remember, the listing agent cannot refuse to present the offer to the seller.
Please note: The Frequently Asked Question video series is used for training purposes within our group of RE/MAX offices. If you are licensed at a different brokerage, you must refer to your own Managing Broker for advice.