Is It Ethical to Negotiate the Agent’s Commission?

You are free to negotiate any arrangement on the commission with any real estate agent. The question will be, is the agent open to negotiating the fee with you? fizkes/Shutterstock

Dear Monty: My wife and I are in the process of downsizing. We have shopped neighborhoods and have chosen several where we would like to land. In this process, one particular agent showed us five or six homes. Now it is time to list our home. This agent’s company has proven a definite lack of knowledge of our development. We have decided to go with another company. We have signed nothing, nor have we made any verbal agreements. Is it unethical to negotiate a sweetheart deal with the listing agent by agreeing to use them to purchase our new home?

Monty’s Answer: You are free to negotiate any arrangement on the commission with any real estate agent. The question will be, is the agent open to negotiating the fee with you? It will affront some agents; some will not be affronted but say no; and others will negotiate with you. The agent’s broker may or may not participate in a reduced-fee transaction, which may reduce your new agent’s incentive to cooperate on the fee.

Check for Procuring Cause

A potential issue could come to bear in the situation you have described. Your agent may have a procuring cause conflict with the agent that showed you homes in the new neighborhoods. There would be no conflict unless you bought one of the homes the first agent showed you. I will assume both agents are members of the National Association of Realtors (NAR), which bounds them to NAR’s rules on procuring cause. Procuring cause protects agents from being cut out of the fee when a buyer or seller switches agents. If you plan to buy one of those homes, you want to discuss this with the new agent to learn if a conflict is possible.