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Commission structures in a thriving market are a wonderful thing for an agent. Lots of money with very little risk. However, when the market turns south like it has across the globe, it is hard to earn a living if things are not selling.

Real estate agents in Denmark have almost en masse decided that the commission structure is not working out for them and are now asking sellers to pay their fees upfront.

Now to be honest, this bothers me a bit. I do not mind agents charging a fee for their service, but it is annoying when they want it both ways. I would respect these agents in a boom market to have gone away from a commission based system.

But now that the market has turned, why is it the sellers cost? And whats worse, these same agents if they think that the home will sell quickly, it is fair to then sell it on commission.

Part of the real estate commission game is that for a oversized commission the homeowner is going to share the risk with the seller that the home will sell. And the homeowner knows that the pot of gold and the investment in marketing expenses are the motivator to work hard to sell their home.  

With thousands of houses on the market and prices in some of the most expensive locations dropping by at least 20 percent last year, real estate agents are having a difficult time shifting the property on their books.

The Danish Association of Chartered Estate Agents confirmed that it sees a changing fee structure being introduced among its members as they are missing out on payments due to properties not selling.

‘Sellers need to get something for their work, even if the property did not sell. Customers must understand that an agent cannot work to sell their property for six months without being paid for it,’ said Niels Carstensen, communications manager with Home, one of the largest national estate agencies.

The ‘sold-or-free’ principle is also being phased out by many working for EDC, another large estate agency. However, EDC said the option is still available to customers if an agent thinks the property will sell quickly. via the Copenhagen Post.

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