Use the phrase ‘fee’ vs the phrases ‘compensation‘ and ‘fee‘
There are a selection of causes for making this shift.
Because of the fee litigation, “commission” and “compensation” have develop into hot-button phrases.
Sellers have repeatedly heard via the media that they solely have to pay their half of the fee. Utilizing the phrase “fee” opens up an infinite variety of prospects for a way the sellers could select to assist the client — for instance, a credit score to restore the roof or to present the client with an rate of interest buy-down.
Patrons usually tend to push again on paying their very own “commissions” as a result of they could not have the ability to afford it, haven’t had to take action up to now or just don’t like the concept.
Utilizing the phrase “fee,” additionally encompasses the payment for service (menu of companies) enterprise mannequin the place the client could elect to pay their agent for finishing particular transaction duties, akin to finding and exhibiting the property, negotiating the supply, and/or dealing with transaction issues required to shut the deal.
The Division of Justice (DOJ) and the Shopper Federation of America (CFA) need our varieties to be “consumer-focused” relatively than “Realtor-focused”
The brand new eXp Purchaser-Dealer Illustration Settlement affords one attainable method to tackle this concern. This doc makes use of the time period “broker fee” all through the settlement.
It additionally references how the payment can be “paid,” i.e., not how the dealer can be “compensated.” In truth, the phrase “compensation” is used solely twice within the settlement:
COLLECTING BROKER FEE FROM THE SELLER:
Credit score to Purchaser, at Closing. Purchaser could select to barter that the Dealer Charge be paid, in complete or partly, by the vendor, via a seller-credit to Purchaser, at closing. At Purchaser’s instruction, Dealer will write this request into Purchaser’s supply to buy the Property.
AND
Direct Vendor-to Dealer Compensation: Purchaser authorizes Dealer (eXp) to request that the Dealer Charge be paid, in complete or partly, by the vendor, to Dealer (eXp), at closing. Any such association can 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 circumstances their consumers need, akin to “repairing the roof,” “buying down the buyer’s interest rate,” or “including the dining room chandelier in the purchase price.”
