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Listing broker Raul has agreed to reduce the seller's commission by 1% if an agent in his firm procures the buyer. Raul:

a) Is violating ethical standards
b) Is negotiating ethically
c) Is breaching contract
d) Is imposing unfair conditions

1 Answer

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Final answer:

Raul is negotiating ethically by offering a reduced commission to incentivize in-house agents to find a buyer. This practice is customary in real estate and adheres to industry standards unless it contravenes agreed-upon terms.

Step-by-step explanation:

When a listing broker like Raul agrees to reduce a seller's commission by 1% if an agent in his firm procures the buyer, he is not necessarily violating any ethical standards, breaching contract, or imposing unfair conditions. This scenario falls under negotiating ethically, as it is a common business practice in real estate for commissions to be negotiable between the seller and the broker. It's important to note that ethical standards in real estate are governed by state regulations and industry organizations, such as the National Association of Realtors (NAR), which outline fair business practices. A broker's actions would only be considered unethical or in breach of contract if they contravene agreed-upon terms or statutory requirements. In this case, providing a commission incentive to motivate in-house agents to find a buyer is typically within the bounds of ethical real estate practices, as long as it is done transparently and all parties agree to the terms.

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