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[FONT=Verdana]Wow, it is amazing how upset the Real Estate agents get about their fees. The realty is there is ABSOLUTELY NOTHING unethical about negotiating a fee. The current system is antiquated and coming under attack from competitive forces that don't support brokers getting paid $24,000 for selling a $400K house which is what I am in the market for. They will tell you all this BS about there specialized knowledge etc. the reality is it is all online now and actually easier to use and deal with than the vast majority of agents.[/FONT]
[FONT=Verdana] [/FONT]
[FONT=Verdana]Let me layout the scenario I am dealing with right now and what brought me to this forum. I am looking for a house in the neighborhood I grew up in and know as well as any agent since my parents have lived there for 30+ years. My wife and I constantly search HAR.com and have looked at several houses by contacting the listing agent explaining that we don't have an agent and if we did purchase there house it would be a "one sided deal" and we would expect a 2% rebate of the 3% that was typically offered to any agent that happens to walk thru the door with you as a buyer and they could keep the 4% for them selves which is MORE! than they would get if we showed up with a realtor. So far 99% of the listing agent have had no objection. [/FONT]
[FONT=Verdana] [/FONT]
[FONT=Verdana]Well heres the funny twist, on the house we settled on and just made an offer on the listing agent/broker got very offended by the aforementioned approach and gave me an uninspiring song and dance about the value realtors bring to the process etc.[/FONT]
[FONT=Verdana] [/FONT]
[FONT=Verdana]So what did I do? Went to Craig list where there are many brokers advertising they would negotiate their fees? The first one I proposed a $1000 flat fee too was very happy for the business. If the offer is accepted the listing agent will now receive LESS! than she would have if she accepted my first proposal and she succeeding in accomplishing nothing more than annoying a potential reference for future work and reducing her own fee. Why did she do it? The only thing I can figure is pride and a lack of recognition of the changing paradigms of the real estate world.[/FONT]
[FONT=Verdana] [/FONT]
[FONT=Verdana]The reality is many agent will MLS list for a flat fee $200-$500 depending on if the listing service also fields calls and sets up appointments etc. or just list your number and they will list with a traditional 3% buyer commission, however if the buyer comes along like me and negotiates the fee down it is very possible a $400K house can change hands for a couple thousand in realtor fees and the agents are beside themselves trying to quash this new reality. Why do you think they are jumping on here with their lame arguments and that is why in recent years you have heard all the radio ads about the value a realtor brings; they are trying desperately to slow the advent of the new era. If realtors brought so much value people would run to them instead of trying to avoid them. The only thing they have going for them is the MLS system and that is falling fast.[/FONT]
[FONT=Verdana] [/FONT]
[FONT=Verdana]Bring on the realtor flames![/FONT]
[FONT=Verdana]Wow, it is amazing how upset the Real Estate agent get about their fees. The realty is there is ABSOLUTELY NOTHING unethical about negotiating a fee. The current system is antiquated and coming under attack from competitive forces that don't support a broker getting paid $24,000 for selling a $400K house which is what I am in the market for. They will tell you all this BS about there specialized knowledge etc. the reality is it is all online now and actually easier to use and deal with than the vast majority of agents.[/FONT]
[FONT=Verdana] [/FONT]
[FONT=Verdana]Let me layout the scenario I am dealing with right now and what brought me to this forum. I am looking for a house in the neighborhood I grew up in and know as well as any agent since my parents have lived there for 30+ years. My wife and I constantly search HAR.com and have looked at several houses by contacting the listing agent explaining that we don't have an agent and if we did purchase there house it would be a "one sided deal" and we would expect a 2% kickback of the 3% that was typically offered to any agent that happens to walk thru the door with you as a buyer and they could keep the 4% for them selves which is MORE! than they would get if we showed up with a realtor. So far 99% of the listing agent have had no objection. [/FONT]
[FONT=Verdana] [/FONT]
[FONT=Verdana]Well heres the funny twist, on the house we settled on and just made an offer on the listing agent/broker got very offended by the aforementioned approach and gave me an uninspiring song and dance about the value realtors bring to the process etc.[/FONT]
[FONT=Verdana] [/FONT]
[FONT=Verdana]So what did I do? Went to Craig list where there are many brokers advertising they would negotiate their fees? The first one I proposed a $1000 flat fee to was very happy for the business. If the offer is accepted the listing agent will now receive LESS! than she would have if she accepted my first proposal and she succeeding in accomplishing nothing more than annoying a potential reference for future work and reducing her own fee. Why did she do it? The only thing I can figure is pride and a lack of recognition of the changing paradigms of the real estate world.[/FONT]
[FONT=Verdana] [/FONT]
[FONT=Verdana]The reality is many agent will MLS list for a flat fee $200-$500 depending on if the listing services also fields calls and sets up appointments etc. or just list your number and they will list with a traditional 3% buyer commission, however if the buyer comes along like me and negotiates the fee down it is very possible a $400K house can change hands for a few thousand in realtor fees and the agents are beside themselves trying to quash this new reality. That is why in recent years you have heard all the radio ads about the value a realtor brings; they are trying desperately to slow the advent of the new era. If realtors brought so much value people would run to them instead of trying to avoid them. The only thing they have going for them is the MLS system and that is falling fast.[/FONT]
[FONT=Verdana] [/FONT]
[FONT=Verdana]Bring on the realtor flames![/FONT]
Sometimes, you can try to get around the written agreement if you take certain steps. I've helped clients who have not had a written contract in the past, but you have to be able to substantiate it. It can be difficult, time-consuming, and risk of recovering anything are not favorable. Before sending any further threatening emails or calls, I would consult with an Attorney who has experience with these matters. With two people in the same boat, you could try and make a compelling argument. Please don't hit him or TP the house, from what you've said, you haven't done anything illegal, and there is no need to start now!
"The information contained in this posting is provided as a service to the forum community, and does not constitute legal advice"
So, finally I was able to manage to get the 2% back. phewww!!!
I did record the conversation about the 2% deal and told the broker that I will complain to TREC and file a lawsuit if he did not comply. He said it's illegal for brokers to give rebates so he can't give it to me in writing.
After telling him and talking to a lawyer about the legality of the rebate, he was taken aback and said that the builder doesn't allow it but he is fine with it and is willing to give in writing "If the Builder Allows".
Then came the time to argue with the builder. You can get the rebate 2 ways - "At Closing" or "Paid Outside Closing (POC)". The builder said they don't allow both---DUH!! Why not? The builder said that the other realtors don't like us offering rebates from the commission paid. So the builder was not allowing the broker to give me a rebate even though the broker agreed. I told the builder that I'm not closing since I stand to lose the same amount anyway and walked out. 3-4 days later the builder called and said we'll do an exception. I said, I don't care what you do as long as I get my money. So, finally I got the 2%.
A few things for others who would want to do it i.e. Lessons learnt:
1.) Rebate from a broker is fully legal as of today in Texas. A broker and a realtor both have to give it in writing.
2.) Make sure this rebate is on the HUD as either "At Closing" or "POC"
3.) Lender has to agree to "At Closing" because they don't want ppl to use the rebate as a part of the down payment. The lender should be ok with POC but you will need their approval. Send them the broker agreement mentioning this rebate. Remember, you'll get it if it's on the HUD, otherwise not.
I was let down by the role of the builder more than the broker for telling me that other realtors don't like us giving rebates from commission. Why the hell do I care about other realtors and transactions when my broker agrees to it and it's legal. We just moved in our new house and it's great but dealing with a rogue broker and a nasty builder wasn't fun. Good thing is I don't have to see their faces anymore.
Documentation is the key; don't trust your friends(Read the original post if you need some context).
Thanks for all the help that I got on this forum and it made me come back and update y'all.
Last edited by hounewhome1; 09-24-2012 at 12:19 PM..
This post disturbs me being a Broker. Not only did you NOT have any representation on the purchase of a very expensive home, this guy sounds like a shady character and should have his license taken away. What realtors do, or should do, is so much more than sign a few papers. I hope you get an inspection.
This post disturbs me being a Broker. Not only did you NOT have any representation on the purchase of a very expensive home, this guy sounds like a shady character and should have his license taken away. What realtors do, or should do, is so much more than sign a few papers. I hope you get an inspection.
You get what you pay for I guess.
That is total BS...Brokers/Agents want the general public to believe they offer some service that is so difficult that even educated people can not complete without an agent/broker. The reality is that the process IS very simple when you know what you are doing and what you are looking for.
This guy did not need any help yet here we are again with the you get what you pay for...he never complained about the house, just the rebating broker who was shady.
I bought a lot recently, had no desire to use an agent, but the listing agents commission split was such that she could not offer me cash back...I brought in a friend who is an agent to complete the transaction and rebate a percentage back to me. We both won in that situation...but there is no real reason at all that we could not have just negotiated the split as a credit to me at closing without an agent....Sellers broker refused so here we are - I had to bring in a friend who walked away with a very nice bit of cash for literally just entering his TREC number on the contract I had already filled out.
Seems like a waste of money to have to use a 3rd party like that, but the sellers broker simply said no...so it was some or nothing. There was no other choice. I chose some.
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(Read the original post if you need some context).
Excellent!
