Use the phrase ‘fee’ vs the phrases ‘compensation‘ and ‘fee‘
There are a selection of causes for making this shift.
As a result of fee litigation, “commission” and “compensation” have develop into hot-button phrases.
Sellers have repeatedly heard by the media that they solely must pay their half of the fee. Utilizing the phrase “fee” opens up an infinite variety of prospects for the way the sellers might select to assist the customer — for instance, a credit score to restore the roof or to present the customer with an rate of interest buy-down.
Consumers usually tend to push again on paying their very own “commissions” as a result of they might not be capable of afford it, haven’t had to take action previously or just don’t like the concept.
Utilizing the phrase “fee,” additionally encompasses the charge for service (menu of companies) enterprise mannequin the place the customer might elect to pay their agent for finishing particular transaction duties, reminiscent of finding and displaying the property, negotiating the provide, and/or dealing with transaction issues required to shut the deal.
The Division of Justice (DOJ) and the Client Federation of America (CFA) need our varieties to be “consumer-focused” reasonably than “Realtor-focused”
The brand new eXp Purchaser-Dealer Illustration Settlement gives one potential strategy to deal with this concern. This doc makes use of the time period “broker fee” all through the settlement.
It additionally references how the charge will probably be “paid,” i.e., not how the dealer will probably be “compensated.” In reality, the phrase “compensation” is used solely twice within the settlement:
COLLECTING BROKER FEE FROM THE SELLER:
Credit score to Purchaser, at Closing. Purchaser might select to barter that the Dealer Payment be paid, in complete or partly, by the vendor, by a seller-credit to Purchaser, at closing. At Purchaser’s instruction, Dealer will write this request into Purchaser’s provide to buy the Property.
AND
Direct Vendor-to Dealer Compensation: Purchaser authorizes Dealer (eXp) to request that the Dealer Payment be paid, in complete or partly, by the vendor, to Dealer (eXp), at closing. Any such association will probably be memorialized in a separate compensation settlement as between the vendor and Dealer (eXp). Purchaser understands that Dealer (eXp) can not talk with the vendor with out first receiving the vendor’s dealer’s permission to take action.
Use ‘terms and/or conditions,’ not ‘concessions’
For many years, there was a discipline in most buy contracts the place brokers can write in extra phrases or situations their consumers need, reminiscent of “repairing the roof,” “buying down the buyer’s interest rate,” or “including the dining room chandelier in the purchase price.”
