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There are also few questions that gnaw at me regarding the current practice of listing agents publishing to the world the amount of the fee being paid by the seller.

1. Isn't it the fiduciary responsibility to a client that an agent keep the terms of their agency employment contract a private matter between the client and the agent?

2. Doesn't the term "fiduciary" also apply to the amount of the fee the client has privately negotiated with their agent? Both buyer and buyer-agent, as well as seller and listing-agent?

3. Isn't it detrimental to both the sellers and buyers negotiating position to disclose the amount of commission each has agreed to pay, since that disclosure could provide an indication of their relative level of desire, or perhaps, desperation to either sell or buy?

As I see it, there are three simple steps that can and should be immediately implemented to eliminate this legally and ethically questionable practice:

1. Listing agents must never impose a fee or commission upon buyer agents when taking a listing.

When taking a listing, the listing agent should always advise the seller that the fee being charged by the listing agent is only for services rendered to the seller in connection with marketing the sellers property, which generally includes pricing and marketing advice, the placing of a sign, creating and placing various forms of advertising, submission to multiple listing service(s), promoting the property to other agents, negotiating for the sellers position at the time a proposed purchase contract is presented by a buyer-agent, assisting with post-contract duties, etc. Additionally, it should become the listing agents responsibility at the time of listing to negotiate a selling commission, but only for his/her own agency to sell the property as a dual agent (when obtaining the sellers written permission to act as a dual agent). It's also important that the seller acknowledge, in writing, that this selling commission is only for the agents in the listing agency who might sell the property as a dual agent.

2. Listing agents must advise seller clients of buyer agent relationships and fee arrangements.

When taking a listing, a listing agent should explain to the seller that buyers may hire a buyer agent to represent them, and further explain that the buyer agent fee is negotiated freely between buyer and the buyer agent, not by the seller or the listing agent. Also at the time of listing, a listing agent should explain to the seller that all fees for both the listing agent and the buyer agent are typically paid from the proceeds of the purchase. The listing agent should also assure the seller, in writing, there is no obligation to sell the property unless they (the seller) are satisfied with the amount of the net proceeds, after the payment of all brokerage fees.

3. Listing and buyer agents should not disclose the amount of their fee to anyone, including to each other, without the expressed written consent of their respective clients.

As a practical matter, the net proceeds to the seller is an essential factor to be dealt with when negotiating of a bona fide offer to purchase. However, it's not essential that either the sellers or buyers agent disclose the amount / rate of their fee to each other. However, there may be circumstances where disclosure by both agency positions might better serve to bring the buyer and seller to a meeting of the minds, although this decision should be left to the two agency positions to deal with as circumstances dictate, but always subject to the approval of their respective clients and acting their clients best interests.

In closing, it seems clear that the practice of listing agents setting the fees of buyer agents is legally and ethically dangerous since it denies the basic right of buyers to obtain the benefit of professional assistance through competitive pricing. This practice also reeks of an implied agent / sub-agent relationship between the listing and buyer agents, with the buyer agent becoming an unwilling subordinate agent to the listing agent. When we combine these problems with the fact that the majority of published fee splits are nearly identical within most market areas, we have, at the least, the appearance of an illegal, collaborative price fixing scheme rather than fees that have resulted from a free and open market driven by healthy competition. I believe, that unless the current practice of listing agents dictating the fees that are paid to buyer agents is eliminated immediately, there's little doubt that sooner, rather than later, there will be serious and costly repercussions that will have a substantial negative impact upon all in the real estate brokerage industry. A "black eye" that the industry does not need, and can easily avoid.

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