Commissions to Attorneys
Q: I am a listing agent and received an offer written by an attorney. Once we ratified the Purchase Agreement, the attorney asked what commission was offered in the MLS to buyer’s agents. I replied that I was offering 3% to cooperating brokers. The attorney stated that he expected to be paid that commission. I asked him if he had a broker’s license and he said he did not; but that it didn’t matter since attorneys are entitled to receive commission payments in real estate transactions and he did it all the time.
Can I pay the attorney the co-op commission?
A: NO.
It is a common misconception, even among attorneys, that attorneys are entitled to be paid commissions in real estate sales. However, that is not true.
This misconception may have come about because attorneys can sit for the broker’s exam without the need for required college-level courses.* But, the mere holding of a bar license does not entitle attorneys to be paid real estate commissions.
In fact, it is a violation of California real estate law for a broker to pay compensation to one who does not possess a valid California broker’s license.
Attorneys who are aware of this often will, when representing buyers in a purchase, attempt to negotiate a price concession in the amount of the co-op broker commission being offered, and also the seek the agreement of the listing broker to reduce the amount of the seller’s commission obligation to the amount of the listing broker’s commission.
*To qualify to take the CalBRE Broker license exam, members of the California State Bar are statutorily exempt from the college-level course requirements. Evidence of admission to practice law in California must be furnished. However, members of the California State Bar would still need to demonstrate that they have satisfied the requirement of two years of full-time licensed salesperson experience within the last five years or have at least two years of real estate-related experience within the last five years while practicing law in California.
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