Can RE Brokers Earn Comm from their Own Properties?

Here's a tricky one: Can RE brokers earn a commission from selling their own properties?

Option 1: Yes!

Option 2: No!

Option 3: It depends.

The latest poll has garnered the highest participation yet—perhaps because many brokers find themselves in this situation.

Here are the results: 59% of respondents said no, brokers cannot earn commission from selling their own properties, while 27% said yes. If we consider the 14% who answered "it depends" as leaning toward "yes," the tally shifts to 59% no and 41% yes. A close call, indeed!

What Do the Experts Say?

According to the National Association of Realtors (US), the answer is no: "When an agent sells a home for sale by owner, they are considered the seller, not the listing agent. Therefore, they do not earn a commission on that sale."

My two cents

I voted, no, but I understand why people do it. It's a cultural thing. Parties seek to maximize their proceeds or minimize cost because it brings them significant satisfaction–a practice prevalent among the Indians and the Chinese. The larger the commission, the more frequent these happen. I have heard of a Bilyonaryo buyer getting their broker to pay for the Php20,000 condo deposit that the seller was collecting.

In some negotiations, parties may try to grab more value by factoring in the broker's commission–a practice called "rebate." A broker earning a commission from the sale of their own property resembles a "rebate." This brings me to a question for you: how do you feel when buyers request a rebate on your commission?

When deciding whether to take a commission or to agree to a rebate, brokers need to consider the potential consequences. For instance, would (other) brokers still market your listing if they knew you were taking a rebate? Alternatively, do you prioritize practicality over principles, believing that earning some commission is better than earning none?

The same goes if the broker is the one purchasing. It’s generally frowned upon, but it still happens. Developers give brokers discounts/commission even if they were the ones purchasing, right?

At the end of the day, there are no right or wrong answers, only consequences.