Q-C real estate firms at odds over commission
- Font Size:
- Default font size
- Larger font size
By Kay Luna | Friday, June 22, 2007 |
RE/MAX River Cities has filed a lawsuit against Mel Foster Co. after getting sudden notice that the real estate company planned to take a bigger commission split when a RE/MAX agent sells one of Mel Foster’s property listings.
The lawsuit, filed June 12 in Scott County District Court, refers to a letter written April 23 by Mel Foster President Bonnie Sparks-Gray.
The letter gave RE/MAX River Cities, of Bettendorf, two days notice that Mel Foster was excluding RE/MAX from a 60/40 cooperative commission split offered by Mel Foster in the Quad-Cities Area REALTOR Association Multiple Listing Service.
Instead, the split offered to RE/MAX — represented by designated broker Susie Banks and President Tom Swanwick — was changed to 80/20, meaning that Mel Foster would get 80 percent of the commission and RE/MAX would get 20 percent when it sells a Mel Foster listing.
“In order to best satisfy both our buyer and our seller needs, we at Mel Foster Co. Inc. are certain that our companies will continue our cooperative split,” the letter states.
The letter does not explain why RE/MAX was being excluded from the original agreement.
The lawsuit claims that Banks and Swanwick — and real estate owners who list their properties for sale with Mel Foster — have suffered damages as a result.
The Davenport lawyer representing RE/MAX, Arthur Buzzell, could not be reached for comment.
Swanwick declined to comment, but a RE/MAX River Cities advertisement in Sunday’s Quad-City Times carried the statement that “one real estate company in the Quad-Cities has a compensation program that may affect your chances of selling your home.”
“The two rules of real estate written in stone are: protect the public and serve your customer to the best of your ability,” the advertisement read. “Ask any realtor if the 80/20 compensation program meets either of these rules.”
Sparks-Gray declined to comment on the lawsuit or Mel Foster’s motivation in changing the policy.
“I think I’ll wait and see the lawsuit,” she said. “I’m really not free to comment until I see how the suit is structured. I’m not going to comment from an uninformed position.”
Walter Molony, spokesman for the National Association of Realtors, said there could be “incentive issues” as far as one company’s interest in selling the other company’s property listings in this type of dispute.
The association’s associate counsel, Isham Jones, said that is what RE/MAX would need to prove in court.
He added that he does not know what the national average is for commission splits, and the association discourages its members from collecting such data.
“It’s really up to the various companies about how they split their commissions,” he said.
Mel Foster ranks Number 1 in the Quad-Cities as far as its residential Realtor numbers, with 401 in the market. RE/MAX River Cities has the third-most residential Realtors, with 64.
Kay Luna can be contacted at (563) 383-2323 or kluna@qctimes.com.
del.icio.us
Digg
NewsVine
Fark
reddit» More Business Stories
Highest Rated Articles from the last 7 Days
- Free Business Grants Kit
- Get $50,000 in Free Business Grants. Request Your Free Kit Today.
- www.thousanddollarprofits.com
- Business Plan Writing and Development
- Business plan writing since 1979. BBB Accredited.
- BPlanning.com
- small business plan software
- Complete and Exclusive Website for small business plan software.
- the-BusinessPlans.net
- Ads by Yahoo!
