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Old 08-06-2012, 11:21 AM
 
Location: Gilbert - Val Vista Lakes
6,069 posts, read 12,700,380 times
Reputation: 3810

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Quote:
Originally Posted by hindukid View Post
Question for all you real estate agents out there:

Don't you kind of want to renegotiate the agreement with your seller if this situation arises. I understand that it would be great to be dual agent and get both sides of the commission. But do you really think that is going to happen when the buyer is specifically looking on his own in an effort to reduce the net price.

Is there really any chance that you are going to get the full 6% commission? There is no way that the buyer is just going to give it to you. He is after all the one who found the house. But forget about fairness, you are providing him with absolutely no incentive to use you. He saves zero dollars. At the very least he can get a full service agent who will serve only his interests. Plus he is probably not going to be your biggest fan. Plus he can probably find a realtor to rebate him a significant portion of the commission.

So what I am saying is that there is virtually no chance that you earn a 6% commission. In fact when you take on the listing you are really just hoping for a quick sale with a 3% commission. So I just don't get why you wouldn't jump at a chance to wrap up the sale and make a little extra money. Wouldn't you rather take 4% and pass on a 1% savings to both buyer and seller than have the buyer bring another agent to the table and stick you with a 3% commission. It seems like a win-win-win. I just don't get how it is in your own best interest to hold the line on this.
The buyer is more than welcome to use a buyers agent. He is not welcome to interfere with our listing contract. Many of us do not want to work with an unrepresented buyer because the majority of them do not know what they're doing, although they think they know more than the Realtor because they know how to search for a home on Realtor.com

It's already been mentioned on here the risk an agent takes when working with an unrepresented buyer. By answering a simple question the agent could have created an accidental "implied" agency relationship, which would then create an accidental dual agency situation without the written approval of both parties.,

That simple risk could later turn into a law suit against the agent. If the buyer or seller elect to sue each other they will also sue the agent. An attorney will dig into all the communications both verbal and written to look for things like accidental creation of agency, and other things that they can ding the agent with.

It is about the price of the risk. There is no requirement for an agent to renegotiate a contract, and there is a law against tortious interference with a third party contract.

The listing agreement is between the agent and seller. The purchase agreement is between the buyer and seller. The agents commission cannot be negotiated within a purchase contract.

 
Old 08-06-2012, 12:11 PM
 
413 posts, read 700,308 times
Reputation: 294
Quote:
Originally Posted by Captain Bill View Post
The buyer is more than welcome to use a buyers agent. He is not welcome to interfere with our listing contract. Many of us do not want to work with an unrepresented buyer because the majority of them do not know what they're doing, although they think they know more than the Realtor because they know how to search for a home on Realtor.com
Fair enough. You would rather do only the seller's work for 3% than both parties work for 4%. Would that change if buyer had an attorney? Also it seems to me like most of you are happy to do all the buyer's work for 3% of 200K or $6000. And this number includes all those times you have to show them around town to 20 different houses and all those buyers who you put work into and then they never make an offer. If those are worth $6000, doesn't it make sense to take the buyer from offer to close for 1% of an 800K house or $8000. Seems like the latter is far easier than the former.

Quote:
Originally Posted by Captain Bill View Post
It's already been mentioned on here the risk an agent takes when working with an unrepresented buyer. By answering a simple question the agent could have created an accidental "implied" agency relationship, which would then create an accidental dual agency situation without the written approval of both parties.,

That simple risk could later turn into a law suit against the agent. If the buyer or seller elect to sue each other they will also sue the agent. An attorney will dig into all the communications both verbal and written to look for things like accidental creation of agency, and other things that they can ding the agent with.

Wouldn't this be solved by having both parties agree to have you represent both of them as a dual agent. If all parties were happy with the price and buyer is happy to use you since you cut rate to 4% then problem of representing buyer is solved.

Quote:
Originally Posted by Captain Bill View Post
It is about the price of the risk. There is no requirement for an agent to renegotiate a contract, and there is a law against tortious interference with a third party contract.

The listing agreement is between the agent and seller. The purchase agreement is between the buyer and seller. The agents commission cannot be negotiated within a purchase contract.
This is not about the seller trying to renegotiate your commission. But there are times when its advantageous for all parties to a transaction to modify a contract. Seems to me like with your current contract you are going to get a 3% commission if and when the house sells. If you modify that with your seller you might get a sale right away and an extra $8000 commission.
 
Old 08-06-2012, 12:15 PM
 
Location: Phoenix AZ
5,920 posts, read 10,491,366 times
Reputation: 9228
Quote:
Originally Posted by hindukid View Post
Question for all you real estate agents out there:

Don't you kind of want to renegotiate the agreement with your seller if this situation arises. I understand that it would be great to be dual agent and get both sides of the commission. But do you really think that is going to happen when the buyer is specifically looking on his own in an effort to reduce the net price.

Is there really any chance that you are going to get the full 6% commission? There is no way that the buyer is just going to give it to you. He is after all the one who found the house. But forget about fairness, you are providing him with absolutely no incentive to use you. He saves zero dollars. At the very least he can get a full service agent who will serve only his interests. Plus he is probably not going to be your biggest fan. Plus he can probably find a realtor to rebate him a significant portion of the commission.

So what I am saying is that there is virtually no chance that you earn a 6% commission. In fact when you take on the listing you are really just hoping for a quick sale with a 3% commission. So I just don't get why you wouldn't jump at a chance to wrap up the sale and make a little extra money. Wouldn't you rather take 4% and pass on a 1% savings to both buyer and seller than have the buyer bring another agent to the table and stick you with a 3% commission. It seems like a win-win-win. I just don't get how it is in your own best interest to hold the line on this.
If you *really* want the buy-side of the commission, why not just get your own re license?
In my state it only requires about a hundred hours of classroom time and $1500~ish in fees and expenses.
I did it myself because I couldn't find an agent I believed was working on my behalf, 100% of the time - and it worked out great! I got to handle my own deal & cashed a nice check for my trouble.

Expecting to get the same "discount" I earn, without doing the work seems kinda snarky.
 
Old 08-06-2012, 12:20 PM
 
Location: Phoenix AZ
5,920 posts, read 10,491,366 times
Reputation: 9228
Quote:
Originally Posted by hindukid View Post
Fair enough. You would rather do only the seller's work for 3% than both parties work for 4%. Would that change if buyer had an attorney? Also it seems to me like most of you are happy to do all the buyer's work for 3% of 200K or $6000. And this number includes all those times you have to show them around town to 20 different houses and all those buyers who you put work into and then they never make an offer. If those are worth $6000, doesn't it make sense to take the buyer from offer to close for 1% of an 800K house or $8000. Seems like the latter is far easier than the former.




Wouldn't this be solved by having both parties agree to have you represent both of them as a dual agent. If all parties were happy with the price and buyer is happy to use you since you cut rate to 4% then problem of representing buyer is solved.



This is not about the seller trying to renegotiate your commission. But there are times when its advantageous for all parties to a transaction to modify a contract. Seems to me like with your current contract you are going to get a 3% commission if and when the house sells. If you modify that with your seller you might get a sale right away and an extra $8000 commission.
You don't understand the liability involved in "dual agency" in my state. Many brokers in my area won't allow it, no matter how much commission is involved, because it's too risky legally. I wouldn't personally do it, even for a family member, much less for a stranger who expects a "discount".

You can dance around it all you want, but it *is* about a buyer who wants to interfere with an existing contract, and that type of person isn't the type of person *I* want to do business with. It's a slippery slope, who's to say they won't come back after closing expecting to "re-negotiate" based on buyer's remorse? I'd expect it's a lot more likely with that type of buyer.
 
Old 08-06-2012, 12:31 PM
 
Location: NJ
17,579 posts, read 38,410,212 times
Reputation: 16101
Quote:
Originally Posted by hindukid View Post

Wouldn't this be solved by having both parties agree to have you represent both of them as a dual agent. If all parties were happy with the price and buyer is happy to use you since you cut rate to 4% then problem of representing buyer is solved.
Do you assume most sellers would agree to dual agency? I know I wouldn't.
 
Old 08-06-2012, 12:59 PM
 
413 posts, read 700,308 times
Reputation: 294
Quote:
Originally Posted by manderly6 View Post
Do you assume most sellers would agree to dual agency? I know I wouldn't.
Would you turn it down if you got full asking price? Dual agency is not ideal but also most sellers are not going to turn away willing and able buyers because of it.
 
Old 08-06-2012, 12:59 PM
 
3,404 posts, read 4,150,440 times
Reputation: 2397
Quote:
Originally Posted by hindukid View Post
Question for all you real estate agents out there:

Don't you kind of want to renegotiate the agreement with your seller if this situation arises. I understand that it would be great to be dual agent and get both sides of the commission. But do you really think that is going to happen when the buyer is specifically looking on his own in an effort to reduce the net price.

Is there really any chance that you are going to get the full 6% commission? There is no way that the buyer is just going to give it to you. He is after all the one who found the house. But forget about fairness, you are providing him with absolutely no incentive to use you. He saves zero dollars. At the very least he can get a full service agent who will serve only his interests. Plus he is probably not going to be your biggest fan. Plus he can probably find a realtor to rebate him a significant portion of the commission.

So what I am saying is that there is virtually no chance that you earn a 6% commission. In fact when you take on the listing you are really just hoping for a quick sale with a 3% commission. So I just don't get why you wouldn't jump at a chance to wrap up the sale and make a little extra money. Wouldn't you rather take 4% and pass on a 1% savings to both buyer and seller than have the buyer bring another agent to the table and stick you with a 3% commission. It seems like a win-win-win. I just don't get how it is in your own best interest to hold the line on this.
The commission is being paid by the seller and the amount is decided when the listing contract written and before there is ever a buyer. The commission is not the buyers money for him to give to me nor is the amount the seller is agreeing to pay something for the buyer to negotiate. Yes there is more than a chance to get the full commission from the seller if that is how the listing contract is written and the buyer has no say in the matter. Nothing on that listing agreement need ever be disclosed to a buyer. The best thing for a buyer to do is make an offer and see what happens. You can't interfere in a contract between two other people. Some agents do allow for a reduction in commission for such circumstances as the one mentioned by the OP, but the time to do that is before there is a buyer when the listing agreement is written.
 
Old 08-06-2012, 01:02 PM
 
Location: NJ
17,579 posts, read 38,410,212 times
Reputation: 16101
Quote:
Originally Posted by hindukid View Post
Would you turn it down if you got full asking price? Dual agency is not ideal but also most sellers are not going to turn away willing and able buyers because of it.
I'm not sure how that makes any sense. If you are offering full listing price why wouldn't you just get your own agent anyway since you aren't looking for a discount?

And just to clarify, I would probably be OK with another agent from the same broker, but not the same agent.
 
Old 08-06-2012, 01:09 PM
 
Location: Gilbert - Val Vista Lakes
6,069 posts, read 12,700,380 times
Reputation: 3810
Quote:
Originally Posted by hindukid View Post
Fair enough. You would rather do only the seller's work for 3% than both parties work for 4%. Would that change if buyer had an attorney? Also it seems to me like most of you are happy to do all the buyer's work for 3% of 200K or $6000. And this number includes all those times you have to show them around town to 20 different houses and all those buyers who you put work into and then they never make an offer. If those are worth $6000, doesn't it make sense to take the buyer from offer to close for 1% of an 800K house or $8000. Seems like the latter is far easier than the former.
In Arizona we normally don't use attorneys, and the attorney could not collect a commission. S/he would have to be paid by the buyer. The OP buyer is trying to save money by cutting out a Realtor, so why would he hire an attorney?

Regarding buyers that you mention. This is not about time spent. It is about having a contract that the buyer is attempting to interfere with. It is about contracts, business and risk management.


Quote:
Wouldn't this be solved by having both parties agree to have you represent both of them as a dual agent. If all parties were happy with the price and buyer is happy to use you since you cut rate to 4% then problem of representing buyer is solved.
That is not what the OP was interested in. And I will only act as a dual agent if I know that both parties will be reasonable. That's because as a dual agent I must become neutral. I cannot advocate for either party. If I sense that a party, such as the OP, is unreasonable, then I will not be a dual agent, and would inform the seller of the reasons. Dual agency is extremely risky for an agent, and in fact is illegal in some states. I suspect when there are some more law suits it will become illegal in all states.
Quote:
This is not about the seller trying to renegotiate your commission.
Right, it's about the buyer attempting to interfere with my third party listing contract.

We could go off into many tangents and how things would or should be done in various situations. In this thread we're discussing the OP's question, which boils down to what is tortious interference with a third party contract.
 
Old 08-06-2012, 01:23 PM
 
413 posts, read 700,308 times
Reputation: 294
Quote:
Originally Posted by manderly6 View Post
I'm not sure how that makes any sense. If you are offering full listing price why wouldn't you just get your own agent anyway since you aren't looking for a discount?

And just to clarify, I would probably be OK with another agent from the same broker, but not the same agent.
Well what I meant was that if the net is the same. If you are asking 800K and paying 6% commission then the best you can hope to net is 752K.

If seller offers 784K and realtor agrees to act as dual agent and reduce commission to 4% then you are still netting 752K. In this situation I am not sure who is losing?

It seems that realtors would prefer to turn the buyer away and make at best 24K commission instead of 32K assuming they can even find another buyer.

And that seller would prefer to wait for another offer which is sure to be lower rather than deal with dual agent.
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