Chantilly, VA asked in Stockbroker Fraud and Real Estate Law for Virginia

Q: Can real estate salespersons legally set their own commission rate or their supervising brokers have legal final say?

I recently got a real estate salesperson license and I’m not getting enough business if I tell clients I charge full 3% instead they say if I can do 1% or less they will work with me. Is it legal for salespersons to set their own commissions rate without getting approval from their supervising broker or is that illegal? Can my supervising broker force me to set a minimum commission legally? Or can I legally set any commission that helps me expand my clientele? I went through my contract and there is no minimum commission defined but there’s a commission split defined which I have no issues with.

1 Lawyer Answer
Richard Sternberg
Richard Sternberg
  • Potomac, MD
  • Licensed in Virginia

A: You are a sales agent for your broker. You do not define much of anything for your broker as a matter of law. But, as a practical matter in the marketplace for decades now, agents who produce have more power than their supervising brokers. As long as you are producing and covering more than the broker's cost for you (insurance, desk, training), as well as paying whatever share you agreed to pay, you can probably write your own ticket *with the broker's approval*. Indeed, successful agents in the DC area often pay a small fixed price to hang their license and have broad discretion on their commissions.

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