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Protecting your Commission Against Non-Licensees

Protecting your Commission Against Non-Licensees. April 20, 2004 Meeting. GK shares commission with:. Licensed brokers who accept our offer to cooperate in a sale by procuring a buyer. GK pays commission to licensed brokers regardless of whether they do business in our market area; or

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Protecting your Commission Against Non-Licensees

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  1. Protecting your Commission Against Non-Licensees April 20, 2004 Meeting

  2. GK shares commission with: • Licensed brokers who accept our offer to cooperate in a sale by procuring a buyer. • GK pays commission to licensed brokers regardless of • whether they do business in our market area; or • whether they are licensed in Texas or in another state

  3. GK does not share commission with: • Licensed agents who do not have a licensed broker involved in the transaction • Anyone who does not hold a broker’s license…including lawyers.

  4. The technical reason that GK does not pay commissions to lawyers or other non-licensees: • TRELA forbids licensees from paying commissions to non-licensees • Under TRELA, an attorney can sell real estate and accept payment from a principal for these services. However, real estate licensees cannot pay attorneys because they are not licensed.

  5. The business reason that GK does not pay commissions to lawyers or other non-licensees: • GK is a premium service firm, not a discount brokerage firm. • Benefit - We provide full, high quality service. • Benefit - We have an excellent reputation in the Houston real estate market. • Benefit – GK agents have experience and training. • We can’t afford to do twice the work for only one side of the commission. • GK experience is that when there isn’t a licensed broker on the other side of a transaction, the GK agent does twice the work. This pulls the agent’s $ per hour down. • If we paid 3% to every buyer who asked us to do so, we could no longer operate as a premium brokerage firm.

  6. The reasons GK will not reduce its 6% listing commission to 3%: • We have a contract with the seller for 6%, and the buyer should not INTERFERE with that contract. • The terms upon which we share the 6% listing commission are set forth in the listing agreement, paragraph 8, which says we will cooperate with other brokers who procure a buyer and pay them 3%. This is the only circumstance in which we will pay 3%. • We can’t afford to do twice the work for only one side of the commission.

  7. An additional approach to take with the Seller: • BE LOYAL TO YOUR LISTING AGENT!!! • GK has provided you with the highest level of service in marketing your home for sale. We are working hard to get you the best price possible for your home. • Please don’t repay us by treating us like a discount broker and asking us to take half the money for working both sides of the transaction!

  8. Commission = Value • A buyer’s claim for your commission, and how the GK agent and the seller react, is based on the VALUE of your services. • Build value throughout the listing process. • Reinforce the reasons that the seller came to GK to list their property instead of going to a discount broker.

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