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Old 08-21-2007, 10:47 PM
 
6 posts, read 16,000 times
Reputation: 15
Default Buyers Agent commission split rejected!

Interested in your opinion and sure I'll get plenty from the Realtors...

Situation: Was looking to buy a certain home, however it was priced too high. I liked the home, but seller was unwilling to move on the list price. Therefore, in a last attempt of making a deal happen before I walked away, I asked the listing agent for a 3% commission split to the seller to sweeten the deal. I am not using a buyer's agent and know for fact the listing agent has a 3% commission in the seller's listing agreement. This would bring the house down by $10k and in the price range that would allow me to sign an accepted contract. All I asked is for the selling agent to simply modify the seller's agreement from a 6% commission to a 3% commission and give the seller the savings that I would in turn be reducing my offer by. Well.....

You would have thought it was Armageddon! The seller's agent became very hostile--"It was not my right to mess with his commission...". I simply explained it was a feasible way to make a win-win-win deal happen that otherwise would not happen i.e. seller sells home, buyer gets home, realtor makes 3% commission. Net, I walked away from the deal and am not looking back. I really think they should have taken me up on the deal as the home has been on the market since late March with not one offer. I wonder what the seller would have thought if they knew their agent turned down an opportunity to sell their home based on their own commission greed? After all, if I would have popped in the door with a Buyer's agent the listing agent would have lost the same 3% I was offering to close an otherwise undoable offer.

What do you think? Thanks in advance for your opinion.

Last edited by jimbob001; 08-21-2007 at 10:56 PM..
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Old 08-21-2007, 11:17 PM
 
Location: Montana
2,203 posts, read 5,981,596 times
Reputation: 1022
Interesting on 2 counts. First of all, this must be one of the few remaining parts of the country where the housing market is still "hot". I just can't imagine any seller not being willing to negotiate right now.

I'm also a little surprised that the list agent wasn't willing to negotiate at least a little bit; however the agent's commission is a contract between the agent and his seller - it really does not involve the buyer at all. The seller could have legitimately asked the agent to lower his commission in the case of a buyer without representation. The seller could have then chosen to pass that savings on to you in order to get his house sold.

Obviously neither the seller nor the agent are anxious to get a check. Where the heck is this place???? Either it's a really hot market there, or you're dealing with a couple of idiots.
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Old 08-21-2007, 11:23 PM
 
Location: Woods of Missouri with many Critters
25,441 posts, read 8,717,533 times
Reputation: 31388
Not only that, but the broker should have been involved. In my office it is the broker that makes the determination to alter the commission. She has given me permission to negotiate a lowered commission with a seller in the past in order to allow a lowered listing price. This worked out well for all involved.

I agree, the agent should have been more receptive to your suggestion and at least given it some consideration instead of behaving in the manner in which you describe. Shame. Good Luck in the future...
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Old 08-21-2007, 11:42 PM
 
Location: California
510 posts, read 2,257,603 times
Reputation: 364
I get the idea of pulling off the golden 6% sale when someone shows up without an agent... but still... if it's obvious the sale will not work without just taking the entire amount you fully expected to make...

Please let that agent know that I only like catsup only on my burger... and please don't screw it up because I hate having to go back through the drive-thru to fix it.
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Old 08-22-2007, 12:09 AM
 
Location: New Mexico
627 posts, read 1,422,102 times
Reputation: 286
You wrote "I wonder what the seller would have thought if they knew their agent turned down an opportunity to sell their home based on their own commission greed?" (I haven't figured out the quote feature yet)

You could find out. Write your own offer on what you suggested and give it to the broker to present to the seller.
You might not get the satisfaction of finding out what they think, but you got your message across. As the agent I couldn't let the seller sign your offer anyway as I'm sure the whole thing would have to be rewritten even if I was agreeable. This assuming you are a novice contract writer.

I think I would only be agreeable to your proposal if you were the only person on earth that would ever buy that house and I was sick of the listing , wanted it out of my hair or I was just desperate for a sale,
for lots of good reasons which would make this post too long. But it might not be legal anyway.

But I wonder who is greedy? The broker for earning his keep as agreed? Or the seller for holding out for more than what the property is worth?
If the seller won't budge on price he's not that motivated to sell.
If I were his agent, I would really have a hard time with lowering my commission so he could make more $$. I might lower so you could get for less and make the deal happen, but not for a hold out seller to make more $$.

I've charged tiny commission rates for desperate sellers to keep the price low hoping for a fast sale if they were willing to sell so low they'd not make any money from closing because they needed to get out from under the payments and are close to losing the place. Plus I've kicked in to help a deal go thru with hard headed buyers and sellers, but on property I'm sick of and glad to be rid of.
I wouldn't do it for your you as you proposed,
based on the assumption of what I should earn.
If I say yes, you love me, if I say no, I'm greedy.
I don't like those ultimatums.

A good sob story might work.
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Old 08-22-2007, 04:15 AM
 
Location: North Pittsburgh
353 posts, read 1,092,507 times
Reputation: 141
The seller and the company he listed with negotiated the commission when the seller listed the property. They have a contract.

You, the buyer want them to rescind that contract, change the terms so you can buy the property at a price you are willing to spend. Why do you expect the agent and his company to suffer a loss to accommodate you?
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Old 08-22-2007, 04:42 AM
 
Location: Georgetown, TX
873 posts, read 2,193,906 times
Reputation: 318
Quote:
You, the buyer want them to rescind that contract, change the terms so you can buy the property at a price you are willing to spend. Why do you expect the agent and his company to suffer a loss to accommodate you?
If the OP had a buyer's agent, would the listing agent and his company be 'suffering' because they would split that 6% commission anyway? I don't think so.

If the listing agent presented that offer to the seller, do you think the seller would say no? I highly doubt it.
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Old 08-22-2007, 05:15 AM
 
Location: Rural Central Texas
3,062 posts, read 5,522,981 times
Reputation: 4234
I am no longer an agent, but I can sure see why I would want to do double work to sell a listing and give you ten thousand dollars out of my pocket so that you are happy getting a bargain.

From your info we cannot tell that this house is overpriced for the market. Given that you would be happy with it for a "mere" 10k less makes me think it is not. I don't think the seller, even if we don't know what their financial situation is, is being greedy by wanting to get full value from their home. I don't think the agent is being greedy by wanting to keep his paycheck rather than splitting it with you. (It is really you benefiting from his loss, not the seller afterall) This sounds the same as if you decided to buy a pool and the dealer sells it for more than you want to pay so you ask the workers to help you pay for it so that they can get the work. The agent and the pool workers are there to earn a living. Why should they contribute to your wallet so that the seller and you can keep your money?

I am amazed that people are so willing to spend other people's money and so outraged when those people resist.
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Old 08-22-2007, 05:21 AM
 
Location: Rural Central Texas
3,062 posts, read 5,522,981 times
Reputation: 4234
Quote:
Originally Posted by mrsengle View Post
If the OP had a buyer's agent, would the listing agent and his company be 'suffering' because they would split that 6% commission anyway? I don't think so.

If the listing agent presented that offer to the seller, do you think the seller would say no? I highly doubt it.
I would. I treat my employees with respect and do not expect them to pay my way in life. It does not matter that there are circumstances where they might see less money in a deal when this is not one of those circumstances. With that logic why not forfeit the commission altogether because another possibility is that the listing might expire without a sale and then they would have gotten nothing on the deal. Are they suffering any more by waiving their commission then they would if the listing expired? Of course not. Would the workload still be more than the alternative circumstance? Absolutely.

The seller has a contract with the agent/broker. The buyer has no standing to expect that contract to be breached and should be ashamed of themselves for suggesting it. The only position the buyer has is to negotiate the best deal they can get the seller to agree to. If they absolutely cannot afford the house for 10K, then they just need to tell the seller that and hope the seller and agent can find a way to make a deal. It is absolutely not their place to approach the seller's agency to make such a suggestion.
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Old 08-22-2007, 06:33 AM
 
Location: Halfway between Number 4 Privet Drive and Forks, WA
1,516 posts, read 3,051,575 times
Reputation: 607
I'm no real estate agent, but I would have left the deal, too. I think you did the right thing.
mrsengle is right, if you had a buyers agent for yourself, they (listing agent) would have lost half of the commission anyway.
Here in our area of GA, it is not uncommon for a buyer with no representation to ask the listing agent to reduce commission on account of no buyers agent being involved, and they happily do it to get a deal through. That is in a hot or cold market, too mind you.
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