While commission sharing is a perfectly legitimate way for agents to collaborate and can provide benefits to buyers, commission loading is a very different practice that, in today’s marketplace, is always detrimental to the buyer.

Commission loading refers to the practice of surreptitiously adding commission on top of the vendor’s asking price. The origins of this practice were more innocent than they may seem. Traditionally, when a vendor instructed an estate agent, they would tell the agent how much they wanted to receive from the sale of the property (before tax), and the agent would then add their fee on top to arrive at the asking price. When the market was rife with cash payments, the fee would be taken from the cash before the balance was given to the vendor. (Okay, reading that back it doesn’t sound ‘innocent’ at all, however, in its infancy this was the fundamental way in which the Spanish property market operated, in plain sight of lawyers and notaries, both for domestic and international buyers) Inevitably this practice was often abused. If a vendor was asking a low price, some agents would add huge fees on top. Additionally, if an agent had a buyer but no suitable property, it was fairly common for them to reach out to other agents to see if they had a suitable property and then add their commission on top of that agent's asking price, doubling the commission rather than splitting it.

When the market was at its worst, freelance “corredores” (runners) would hunt out properties, directly or through other agents, to provide extra listings. When I was very young and naive and working for a relatively large estate agency, I met a ‘corredor’ who was to take me to see a property in the countryside. The corredor, in turn, took us to meet another, who then had us wait for yet another to arrive. By the time we set off to look at the property, we were at the rear of a convoy of five cars, each containing someone who would have added their fee on top of the person in front. Needless to say, we walked away from that property very quickly. This story serves as a somewhat extreme example of how commission loading can lead to massively inflated property prices.

In the modern marketplace, the nefarious practice of commission loading has been nearly eradicated. The elimination of cash transactions has made this practice almost impossible to carry out surreptitiously. However, it has not disappeared completely. If you see a property advertised by different agents at different prices do not assume it is due to poor portfolio management.