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I wouldn't have a problem if a buyer's agent said to me that the commission on a particular house was so low that it just wouldn't be worth their time to them. I could then make the choice of what do to (pay them/don't see the house/try a different realtor).
So does this work the other way as well? If the agreement is for 3% and the seller's are offering 4% does the agent kick back or split the extra with the buyer?
REps and kudos to you Lebowsky . . .there are more goofballs in the real estate field than not, hence, makes the good ones look really bad, because we (novices) can't tell them apart, sorta like the needle in the haystack thingy or hitting the lotto when and if you find a competent/good one, lol
The problem is that real estate brokerages are in the agent recruitment business. They make their money off desk fees and such so some don't care about the quality of their agents. I've seen a few heinous agents over the years, but honestly most are just average. I say this as a brokerage owner.
Combine that with the fact that 64% of consumers hire the first agent they meet and you are in for lots of problems. The majority of consumers don't even attempt to make sure they are hiring a good agent.
I wouldn't have a problem if a buyer's agent said to me that the commission on a particular house was so low that it just wouldn't be worth their time to them. I could then make the choice of what do to (pay them/don't see the house/try a different realtor).
So does this work the other way as well? If the agreement is for 3% and the seller's are offering 4% does the agent kick back or split the extra with the buyer?
It depends on the agreement. I know some agents that do just that. I can't rebate in Oregon but I can waive a higher commission offering in a letter to the listing brokerage and ask that they rework their listing agreement with the seller to drop the commission offering and pass the savings onto the buyer.
I know the mods will probably cut this link, but there is a really great post on ActiveRain about this exact issue. The comment stream is fascinating to read. It doesn't say good things about the real estate industry for the most part, IMO, but a worthwhile discussion.
For those concerned about "working for free" and "it being such a small amount", we're talking 2.5% vs 3% per the OP - seriously?
Maybe it's an $80,000 house so the commission is really small to begin with. I don't know. If it is a $600,000 house then I'd totally agree with you.
Quote:
Originally Posted by MikeyKid
I really think that agents depending on this situation becoming the "norm" (i.e. buyer's paying agents) are kidding themselves. You'd just force folks to go directly to the seller's agent and put up with dual agency. If I have to put out significant money (i.e. half a point) as a buyer I'd much rather pay a lawyer than an agent.
I don't think agents are depending on it becoming the norm. I think things are shifting towards having a more open conversation about fees and such. Buyers like yourself can choose to not have an agent, they can bypass houses with low offerings, or they can pay up. Either of those are fine choices, but that is the key...the buyer gets to choose.
No I agree that your agent should have been clear that the commission could have been cut in a short sale. If you re-read what I said in comment #7, I told you, you should talk to your agent because you made an offer with the understanding that the full 3% was covered because she told you it was.
I'd bet you money that your agent isn't intentionally lying or trying to rip you off, they are just inexperienced. I am guessing they have never done a short sale before as a buyer agent and probably weren't aware that their commission could be cut. Inexperienced agents are a significantly bigger problem than unethical agents.
My advice still stands. Talk to your agent and tell them you made the offer you did with the expectation that the full fee was covered. See what the agent does.
Well I thought I did my research before picking the realtor. In this case had 10+ years of experience and had some references... seemed enough to me. In my field of work 10+ years makes you more than knowledgeable. In this case the profile of the realtor also stated prior experience with short sales...
For some reason you decided to think I'm intellectually challenged, as you hinted in post #9. Maybe the situation is so clear to you but understand that this is just because this is your field of work.
There is only so much diligence you can have before hiring somebody becomes pointless. You hire a plumber to fix the pipes of your home, maybe you read on the internet the cost of the materials and ask around how much did others got charged for the same service. You do this so he does not ********* over, but you don't learn to do the work, thats the point of hiring the plumber...
If its so hard to find a good realtor to help you then, why bother? It will be simpler to do the work yourself, it might take more time but it will leave me less frustrated.
It depends on the agreement. I know some agents that do just that. I can't rebate in Oregon but I can waive a higher commission offering in a letter to the listing brokerage and ask that they rework their listing agreement with the seller to drop the commission offering and pass the savings onto the buyer.
I know the mods will probably cut this link, but there is a really great post on ActiveRain about this exact issue. The comment stream is fascinating to read. It doesn't say good things about the real estate industry for the most part, IMO, but a worthwhile discussion.
You owe me 30 minutes of my life back.
That was actually a pretty interesting read.
Last edited by manderly6; 08-18-2010 at 11:35 PM..
Well I thought I did my research before picking the realtor. In this case had 10+ years of experience and had some references... seemed enough to me. In my field of work 10+ years makes you more than knowledgeable. In this case the profile of the realtor also stated prior experience with short sales...
For some reason you decided to think I'm intellectually challenged, as you hinted in post #9. Maybe the situation is so clear to you but understand that this is just because this is your field of work.
There is only so much diligence you can have before hiring somebody becomes pointless. You hire a plumber to fix the pipes of your home, maybe you read on the internet the cost of the materials and ask around how much did others got charged for the same service. You do this so he does not ********* over, but you don't learn to do the work, thats the point of hiring the plumber...
If its so hard to find a good realtor to help you then, why bother? It will be simpler to do the work yourself, it might take more time but it will leave me less frustrated.
I can see why you think I was assuming that but I wasn't. If you read though a good chunk of threads on here, you'll see that the #1 thing that consumers do is fail to read and understand what they sign. I did assume that you were a consumer who did not read what they signed. It sounds like that was an erroneous assumption on my part as you clarified that later.
While I know you feel like you did research on this agent, it sounds like you just interviewed one. When I first moved to my city, I asked a friend to recommend a doctor. I went and didn't like the doctor at all. Friend loved her. So, I asked around again until I found someone that was a good fit for me. The reason is that just because your co-worker, friend, etc loved their agent it doesn't mean that agent is the right one for you. Communication style is really important in real estate. Methodical people/planners want to be actively involved in the entire process. Analytical types want lots of data. Some people want none of that.
I don't think suggesting you interview three good prospective agents is excessive on the part of a consumer that is about to spend a couple hundred thousand dollars. I'm not suggesting that you read a bazillion books on real estate. That is what you are hiring an agent for. I'm just suggesting that you take the time to make sure you pick the best service provider for your needs.
If your agent wrote somewhere online that they have short sale experience, I would point blank ask them why they didn't warn you about a commission cut. There is no way they have short sale experience and don't know that commissions are often under attack during the negotiation.
But you are 30 minutes deeper into the polarization of the real estate world. I think all consumers should be aware of these issues in the industry so they know what questions to ask.
There is only so much diligence you can have before hiring somebody becomes pointless. You hire a plumber to fix the pipes of your home, maybe you read on the internet the cost of the materials and ask around how much did others got charged for the same service. You do this so he does not ********* over, but you don't learn to do the work, thats the point of hiring the plumber...
If its so hard to find a good realtor to help you then, why bother? It will be simpler to do the work yourself, it might take more time but it will leave me less frustrated.
I wasn't going to comment at all, but yes your contract with your agent will stipulate the commission agreement. If it states you owe 3% and you feel you were misled then go back and tell your Realtor in open, honest communication. Stay calm and present your case that you feel you shouldn't have to pay the extra.
As far as the rest, I understand you're upset. I probably would be as well. However, to shirk off all Realtors over this is definitely getting carried away. It's the same as saying you feel a plumber overcharged you so from now on if you need a plumbing repair you'll just learn to do it yourself to save money. Or if you feel a mechanic didn't meet your expectations, you'll learn to fix your own car in the future.
Regardless of how it turns out, the agent helped you find, contract, and close on a short sale which can be no small feat. I hope the rest of the transaction goes well. Be happy and enjoy your new home.
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