The following statements detail the policies and procedures for dealing with commissions, commission rates, discounts and special arrangements.
Commission – Buying
Any buying commissions that are negotiated with clients must be properly authorised and adequately
documented. Approved REIV authority must be completed.
The practice of reducing commission to offset advertising incurred by a vendor is not acceptable unless
prior approval is given by the Directors. Discounting will incur costs to both the company and the listing consultant.
Any attempt to discount commission should be discussed in the first instance with the Directors and will not be considered unless the following criteria apply:
- Property is listed at the company’s standard commission rate or better
- The giving of a discount is judged in terms of its flow-on effect to acquire additional listings
- The current level of listings within an office is such that the use of this technique will increase the general level of listings
It is incumbent upon the Directors and sales consultants to ensure that such discounts are not perpetuated and are used only in special circumstances.
Commission – Incentives
The incentive scheme is intended to reward those who earn commission in excess of the “average”. In line with normal business practice, the company reserves the right to amend and/or remove this payment arrangement.
Commission – Negotiation
In a deregulated environment, all sales commissions are negotiable and this fact must be made clear to vendors before any authority is signed.
The company’s preferred rate of commission is 2% to 3% of the sale price. Depending on circumstances the commission rate may be varied, but is conditional on Directors consent.
Unconscionable rates of commission shall not be negotiated with vendors and management shall be the final judge of “unconscionable”, taking into account all of the circumstances of the listing.
The practice of reducing commission rates to offset advertising incurred by a vendor is not acceptable unless prior approval has been given by the Directors.
Listing consultant’s commission will only be granted with the approval of a Director and may not be promised without prior consent.
Commission – Referrals
Referral commission, paid to a consultant as a result of finance provided to a vendor or purchaser, shall be in the first instance paid to the company. Consultants must disclose to vendors and purchasers that they may be entitled to a referral commission form the finance provided. Failure to do so may make the claim invalid for the referral.
Referrals to another agent will attract a 80/20 arrangement, and a referral form must be completed.
Consultant’s who successfully arrange finance will be paid a commission for such a referral. The payment of such commissions will be made via the payroll system and therefore the appropriate tax will be deducted.
All Finance Referrals are to be directed by Our CompanyFS.
Commission – Sale of Property for staff and families
The company policy is to allow a discount on commission charged to staff and their immediate family when selling through Our Company.
Provided the initial rate of commission charged is 2.5% a discount of 40% should be allowed for sales of staff owned properties and 25% when selling properties owned by their immediate family.
All commission payments to sales consultants will be based on the actual discounted commission charged to the owner.
Commission – Scale Property Management
Currently a one off incentive (50% of the letting fee) is paid to all staff who introduces a property to the rent roll. A property that is introduced to the rent roll by a sales consultant when it becomes available for sale is to be managed by the introducing consultant, if still in the company’s employ. A referral form should also be completed in this instance in order for commission to be paid.
Commissions – Secret
Secret Commissions are illegal under the Crimes Act and any staff member accepting a secret commission is liable for dismissal. Any legitimate commission earned by consultants will be properly accounted for by the company in the normal manner.
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