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I'm working on a transaction where I am representing buyers buying a house from sellers that do not have an agent. I located the house for the buyers and asked the sellers to sign a limited brokerage agreement before I showed their house to my buyers. They agreed and signed the contract.
Then, after getting my clients offer, they decided the best way to get the transaction to close would be to throw out the agreement they signed with me and ask me to take a reduced commission. I did not agree and told them that the original agreement we signed would stand and that if they wanted to make a deal with these buyers, then the terms are what is written in the contract.
I don't know why everyone thinks it is okay to ask an agent to take a reduced paycheck. This transaction has been at least twice the work of any other deal I've done because in addition to my buyers being first time buyers, these sellers are first time sellers. They have no idea what they are doing and are relying on me to explain every single thing to them. They have an attorney, yet for some reason always go to me first with their questions. They know I represent the buyers and do not represent them, but it doesn't stop them.
People are very fast to assume that agents don't work for their money. IMO, that falls into the category of "you don't know what you don't know." These sellers have no idea what they are doing and would have actually saved a lot of money if they had just had an agent to advise them. They assumed the agent would not be worth the 3% and instead have spent much more than that on expenses they could have avoided. I guess the joke is on them but honestly, as an agent these assumptions that everything is easy and anyone can do it really get tiring after awhile.
We are putting an offer in and have no agent representation. We emailed a scanned, signed contract to the listing agent. In the email, we highlighted the offer (price, etc) and the fact that we do not have a buyers agent thus raising the potential for a 3% reduction in the sellers commission payout. We understand that the seller has already signed a listing agreement with the LA and is responsible for this, independent of whether we bring an agent to the table. However, we also recognize that that the contact between the seller and seller agent could be amended, if both parties agree, and wanted to make sure that the sellers understood this.
We requested that the listing agent forward this email to the sellers. It is our understanding that all offers must be presented to the sellers. Is this true, even if it puts the listing agent in the uncomfortable position of trying to defend his "extra" 3% commission? Could the agent "filter" the offer and not forward it to the sellers on the basis that is interferes with a contract between him and the sellers?
You are on the same path that TrustButVerify was. You are making a lot of assumptions.
First of all, yes agents are legally required to present all offers. They aren't required to present your email, but most in my area would. Second, it is possible the agent already has had a conversation with the seller about unrepresented buyers and it is likely addressed in the listing agreement. So wanting to make sure the seller understood what you were asking might be a moot point. Third, it all depends on the ethics of the listing agent. Fourth, the listing agent doesn't have to defend diddly. They have a contractual agreement that is binding. Some will adjust their contracts if it isn't addressed and others won't. That depends on the confidence and skill level of the agent.
For the other agents that are saying it is twice the work with an unrepresented buyer, I disagree. I correct agent mistakes all the time on contracts. I double check everything the buyer agent tells me as I think that is what sellers are paying me to do. I would do these things regardless so from my perspective it is the exact same. The only difference is that often the buyers don't understand local real estate culture and customs and don't negotiate well for themselves. The fact that you are focusing on the reduced commission issue tells me that you don't have great negotiation skills. You need to make the offer you want to make, unabashedly with no excuses. If it works for the seller great. If not, then they will counter. You are assuming the agent is trying to pull something over on their client. You'd be amazed at how many clients get upset when buyers try stuff like that with real estate agents they trust. It can really backfire for you, and sellers end up thinking you are the slimy one, and not their agent. Not all consumers think so little of their real estate agent representation. I've had clients pay me a bonus at closing. Crazy, but true.
What incentive does the seller have for giving you the 3% savings? When commission is reduced usually both parties expect the savings to land on their side of the settlement statement.
Quote:
Originally Posted by 1insider
Just sold our house and from a sellers perspective, having an extra 3% to negotiate is a potent "incentive" for the seller. All things equal, it could reduce their payout at closing and bridge an otherwise insurmountable gap in negotiations.
"It's very likley the listing agent and seller have already discussed and agreed on commission in the event an unrepresented buyer offers."
Doubt it. Most sellers, even savy ones, don't discuss the rare scenario of an unrepresented buyer and most seller agents do not specifically point this out to the sellers when they sign the listing agreement. Do you?
"If your offer does get accepted where is your escrow deposit going to be held? "
I am fine with the listing agency holding escrow. Would you have a problem with this?
"Can you back out of the contract and receive your deposit back if you don't like the inspection results? Are the time periods in your contract calendar or business days? On what day does the clock start ticking?"Do you know who typically pays which closing costs in your area? Will you recognize an abnormally high settlement charge?
Having a BA does not allow me "back out of a contract"... My RE attorney is better suited than any BA to address these issues
"Do you think the listing agent is going to be looking out for your best interest?
"
No, I don't think any agent (buyer or seller agent) will. Hence my argument for foregoing a BA and trying to recoup some of the 3%.
Regardless of the merits of buying without representation, you did not address my central question. If the issue of commission and lack of a BA is specifically written with the offer to purchase, do you think the seller agent is obligated to present the entire written offer?
Some of you have implied that what and how the offer is communicated is the seller agent's discretion. That is precisely my concern. I believe that it is important that the seller know that I do not have a BA.
Regarding interference with the listing contract:
Just to clarify, I am not asking the seller to disclose the details of their listing agreement or to breach their listing contract. Once the seller knows that there is no BA, it is up to the seller to discuss and negotiate this with their listing agent. However, the seller and agent can re-negoatiate the contract. Are you guys proposing that the seller should be insulated from the fact that I do not have a BA and that the 3% "buyers" will by default go to the listing agent.
Regarding the issue of listing agent performing BA work for "free":
I recognize that the listing agent will have to do more work given my free agent status. This is something between me and the listing agent (not the seller and agent). I would strive to fairly compensate the agent for their work but I do not think this means automatically paying them 3% on a 800k house. Particularly when I have an attorney.
Most of your responses do not address the central issue of my original question/post.
1) If I email the offer, which also includes my lack of a BA and an explanation of potential commission savings, to the seller, and I specifically request that the agent forward the email to the seller, is the agent obligated to do so? It is my understanding that agents are legally and ethically expected to deliver all offers to their sellers (unless the seller has designated specific filters). What better way to do so than forwarding an email containing the entire offer?
2) If the listing agent does not do this, is this illegal?
3) Is it legal for me to communicate directly (email, snail mail) with the seller? This would insure that the seller receives my full offer. I know many of you RE agent may frown on this. Would prefer some attorneys in the crowd weigh in on this one.
Some of you have implied that what and how the offer is communicated is the seller agent's discretion. That is precisely my concern. I believe that it is important that the seller know that I do not have a BA.
Regarding interference with the listing contract:
Just to clarify, I am not asking the seller to disclose the details of their listing agreement or to breach their listing contract. Once the seller knows that there is no BA, it is up to the seller to discuss and negotiate this with their listing agent. However, the seller and agent can re-negoatiate the contract. Are you guys proposing that the seller should be insulated from the fact that I do not have a BA and that the 3% "buyers" will by default go to the listing agent.
Regarding the issue of listing agent performing BA work for "free":
I recognize that the listing agent will have to do more work given my free agent status. This is something between me and the listing agent (not the seller and agent). I would strive to fairly compensate the agent for their work but I do not think this means automatically paying them 3% on a 800k house. Particularly when I have an attorney.
Most of your responses do not address the central issue of my original question/post.
1) If I email the offer, which also includes my lack of a BA and an explanation of potential commission savings, to the seller, and I specifically request that the agent forward the email to the seller, is the agent obligated to do so? It is my understanding that agents are legally and ethically expected to deliver all offers to their sellers (unless the seller has designated specific filters). What better way to do so than forwarding an email containing the entire offer?
2) If the listing agent does not do this, is this illegal?
3) Is it legal for me to communicate directly (email, snail mail) with the seller? This would insure that the seller receives my full offer. I know many of you RE agent may frown on this. Would prefer some attorneys in the crowd weigh in on this one.
Wait a minute...is your offer in an email? Meaning it is unsigned?
I assume you had written and signed an offer, attached it as a pdf, and then you just had words of clarification in an email.
First, trust me, the chances that the seller will know that you do not have a buyer's agent no matter what you put in an email are WAY up there; the seller's agent will want the seller to know this so that they will understand that the deal is likely to go much less smoothly than it otherwise would as a result (just as any endeavor, not just real estate, in fact, probably what you yourself do professionally, goes less smoothly when an inexperienced amateur is handling it rather than someone who does it for a living and has done it many many times before) and that they shouldn't be upset by this because it's predictable that it will happen with an unrepresented buyer.
Second, you say that you are not asking the seller to breach their listing contract but you ARE trying to interfere in it by encouraging the seller to renegotiate that contract for YOUR benefit. Not the seller's, not the listing agent's, both of whom are parties to the listing agreement, but yours, as a third party not a party to the contract. How people think this is just hunky dory and try to say they aren't doing what they very clearly ARE doing (and expect anyone else to believe it, yet!) boggles the mind sometimes.
Third, what's contained in a contract is pretty limited in most states. Are you including in the written contract offer that you've signed my lack of a BA and an explanation of potential commission savings or is that a separate email that you're hoping the agent will forward unaddressed, again, in hopes of getting the seller to renegotiate the contract with the listing agent that you say you are not trying to interfere with (though you very clearly are)?
Agents are required to present all offers to their seller clients. They aren't required to (but usually do) present cover letters, etc., but you do realize that you've put your attempt to interfere with a contract to which you are not a party in writing by doing that, don't you?
Agents are required to present all offers to their seller clients. They aren't required to (but usually do) present cover letters, etc., but you do realize that you've put your attempt to interfere with a contract to which you are not a party in writing by doing that, don't you?
In Oregon we are required to submit all written and signed offers. We have no obligation to present verbal offers, unsigned email offers, or offers on a cocktail napkin. It has to be in writing and signed, and then yes, in Oregon, we are required to present it. It doesn't have to be on legal real estate forms. It can be a signed letter and then it is considered an offer here. If it isn't signed, then we don't have to present it.
So OP in order to answer your question, we'd need to know if you signed the offer you sent over and probably the state you are in would be helpful.
First, trust me, the chances that the seller will know that you do not have a buyer's agent no matter what you put in an email are WAY up there; the seller's agent will want the seller to know this so that they will understand that the deal is likely to go much less smoothly than it otherwise would as a result (just as any endeavor, not just real estate, in fact, probably what you yourself do professionally, goes less smoothly when an inexperienced amateur is handling it rather than someone who does it for a living and has done it many many times before) and that they shouldn't be upset by this because it's predictable that it will happen with an unrepresented buyer.
Second, you say that you are not asking the seller to breach their listing contract but you ARE trying to interfere in it by encouraging the seller to renegotiate that contract for YOUR benefit. Not the seller's, not the listing agent's, both of whom are parties to the listing agreement, but yours, as a third party not a party to the contract. How people think this is just hunky dory and try to say they aren't doing what they very clearly ARE doing (and expect anyone else to believe it, yet!) boggles the mind sometimes.
Third, what's contained in a contract is pretty limited in most states. Are you including in the written contract offer that you've signed my lack of a BA and an explanation of potential commission savings or is that a separate email that you're hoping the agent will forward unaddressed, again, in hopes of getting the seller to renegotiate the contract with the listing agent that you say you are not trying to interfere with (though you very clearly are)?
Agents are required to present all offers to their seller clients. They aren't required to (but usually do) present cover letters, etc., but you do realize that you've put your attempt to interfere with a contract to which you are not a party in writing by doing that, don't you?
Well said.
To the OP, unless the whole discussion about you not having a BA are actually in the contract the listing agent is not required to present that information to the seller. They probably will pass that information along but they may or may not do it exactly as you want them to (by forwarding your exact email).
Ultimately, it is unlikely to make any difference if you have a BA or not because the sellers have already agreed to pay a certain percentage to the listing agent. There may be a caveat for a lower commission when there is an un-represented buyer, but there may not be. The agreements I've seen in Illinois have this about 50% of the time. If the seller has to pay the same amount of commission regardless of whether you have an agent, then he/she probably doesn't care that you don't have one. Personally, if I were the seller, I'd rather that a buyer just had their own agent because things tend to go much more smoothly when they do.
In Oregon we are required to submit all written and signed offers. We have no obligation to present verbal offers, unsigned email offers, or offers on a cocktail napkin. It has to be in writing and signed, and then yes, in Oregon, we are required to present it. It doesn't have to be on legal real estate forms. It can be a signed letter and then it is considered an offer here. If it isn't signed, then we don't have to present it.
So OP in order to answer your question, we'd need to know if you signed the offer you sent over and probably the state you are in would be helpful.
Always fascinating.
I must convey verbal offers to my client. Of course, my client would then get the proper counseling to give the proper response of "Put it in writing."
I must convey verbal offers to my client. Of course, my client would then get the proper counseling to give the proper response of "Put it in writing."
Yep. Because a verbal offer is worth just as much as the paper it's written on.
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