Hi all,

I am an agent working under a large corporate brokerage housing over 700 agents in my area. The managing broker for these local 3 franchise offices is the same. This broker routinely takes their cut of the commission on gross commission, but as a short sale listing agent, I sometimes must pay a portion of my commission to settle the second lein, or a HOA debt, or any numbers of things that homeowners in default fail to take care of just in order to get the deal closed. My question is, is this legal? If my gross commission is 10,000, but I have to pay out 3,000 to settle a lein in escrow, and only am netting 7,000, can my broker legally take their cut off the 10,000?

they can do whatever they want. it's their commission which they are sharing with you based on your independent contractor agreement. if you are offering to pay up to settle a lien without them contributing, that's something you need to discuss with them. talk to them directly. if you are unhappy with their terms.. move on.

The broker can do what they want. You work from the broker and have to play by his/her rules. I agree it would be nice if the broker took their cut of the 7.000 not the 10,000. See if you can work something out.

Yep I am a head broker owner and it's my way or the highway.

You make the decision to take a payoff.You should try to get the homeowner,the buyer,the mortgage broker,the title or closing attorney,the selling agent all to kick in some coin to reduce or eliminate your payout off of your commission.

If the second lien is to high negotiate.I am not there but it seems you just want to be easy and reduce your commission to get to closing fast.

Before I was a broker just starting out this type of thing became an issue with my last company.Some agents wanted to take listings for reduced commission or give a buyers rebate.

The head broker said that is fine but your 70/30 split will be based off of a 3% minimum for one side and 6% for two.

You will also not be able to advertise these reduced commissions as it would be unfair to the other agents.

In reality it is not your commission to begin with it is your brokers.So each time you have to look at paying a lien etc. talk to your broker.

What if you agree to all these items of payoff and then based on the payoffs there is not enough to cover the broker?? In that case you would have to pay the broker to close and lose money. What about a broker bonus? What is your split on that or does the broker let you keep??

These are all things you need to discuss with your broker ESPECIALLY if you are doing a lot of sales.

The illegal question is a funny one for sure.Yeah that broker is just charging to much it should be illegal! LOL

If they don't want to adjust the commission schedule and risk losing you then talk to other brokers. Your clients will work with YOU and not the name of the broker. Ask any of the buyer's or seller's if they know your broker or how much the brokerage name actually matters. People want a capable agent to help them buy or sell. If you say that just a bigger company means more capable, knowledgeable agents, then we have more problems in our industry than I thought.

I feel that if they won't work with you and they don't want to help try to keep you happy then that is why you are an independant contractor. BTW what does your Ind. Contract Agreement state regarding commissions and how splits are calculated?

Yes, this legal (although undesirable). What it comes down to is that the agreement between you and the brokerage firm is basically a contract between an employer (the brokerage) and an independent contractor (you). If you are not happy with the arrangement it is up to you to negotiate the terms of the contract with the brokerage, or move on to another team.

They have quite a bit of different ways they can do your commission as an agent and although it is undesirable, it is still legal (as far as I understand it). As Krisi pointed out, the agreement is writen between you and the brokerage firm and you are binded by the contract.

Your independent contractor agreement and or commission split policy that the broker supplied you when you signed on should spell out the details exactly.

If this split isn't working for your particular situation, why not read through your agreement, come up with something that works for you, and approach your broker about the changes you'd like to see.

With a broker that has 700 agents you may find they are unwilling to make a change.

Just like a builder that has many lots to sell in a development, they will be hesitant to cut you a break for fear word will get around. Even a small discount to you could be multiplied by 700!

As a broker/owner, that's not very appealing to me.

Thanks for all of your responses. I'm on my way out with this broker anyways, I just don't see the value in sharing any of my commission with anyone. They offer nothing but a big (red) name and a hefty bill for everyhing. I'm taking my broker's classes through Allied and hope to cut myself free ASAP.

Broker has own rules. How can a broker work well if he keep on doing what the seller wants and same with the buyer wants. Broker is the arbiter which he must know whose gonna give a favor.

DesertRealtor, good luck to you!

Do they ask the Lawyers to help settle the lein? Why should the Agent? Is it our fault they are under water - you did your job - Hang tough don't give in too easily to "settle the lein". Agents are too quick to cut their commission in short sales.

Just to be taken seriously when you put it in writing, these are usually "liens".

I think it's just that old "i" before "e" thingy !

When speaking verbally, it probably doesn't matter.