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Silverfall - I also would use you when selling a home.
What most realtors dont seem to grasp is that sometimes a Buyer wants to do things the way he wants to do them.
Yes, their way is to interfere with a third party contract.
I have a Yorkie that is also stubborn and wants to do things her way, but that doesn't always happen; except when she wants to go swimming I'll let her have her way because it's good for her and it also gets me away from my desk. Sort of a win/win situation, you know.
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by Marksmu......and the additional liability can EASILY be contracted away. None of it is hard.
Please explain how one can EASILY the additional liability. (And by the way, I'm happy that you recognize that there is additional liability. Thank you for that.)
I'll pass that "contract away" information along to my E&O company to see if by "contracting away" any additional liability I'll get a reduction in premium. But then again, perhaps I shouldn't contact them because if I show them I'm taking on additional risk and can't explain how I'm "contracting it away" they may increase my premium.
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by Marksmu.... Your DUTY is to the principal, even if that comes at your expense....that is specifically spelled out in the statutes of Texas, and I am sure it is the same in every State.
. Please provide a link to the Texas statute that states an agent must renegotiate their employment agreement for a client.
Arizona law specifically speaks to that subject, and I suspect that Texas is the same. I'm interested in seeing the Texas law. Here is the Arizona law:
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The Arizona Real Estate Commissioner Rule R4-28-1101 (D) states :
A licensee shall not allow a controversy with another "licensee" to jeopardize, delay, or interfere with the initiation, processing, or finalizing of a transaction on behalf of a client. This prohibition does not obligate a licensee to agree to alter the terms of any employment or compensation agreement or to relinquish the right to maintain an action to resolve a controversy.
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by Marksmu.....The bottom line is that a buyer and a seller should both be viewed as customers....The listing agent is offering to sell a property for his client (Customer 1) - its the listing agents job to be sure that the buyer (customer 2) is happy with the transaction or he wont buy.
Sorry but you are in error. As defined in the Realtor Code of Ethics a "Client" is a person with whom the agent has established a Client/Broker agency relationship. It can be either "implied" (accidentally by action), or "expressed" by written disclosure.
A "Customer" is a party to a real estate transaction who receives information, services, or benefits but has no contractual relationship with the Realtor or the Realtors firm.
An agent owes Fiduciary Duties to his/her client. To all other parties, customers, prospects, etc., the agent only owes the duty of Honesty and Fair Dealing.
It is NOT the listing agents job to make the buyer happy with the transaction. The only thing the listing agent owes the buyer is Honesty and Fair Dealing.
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by Marksmu.....If your seller would go down 10% but you are able to please your customer by just giving in 3% then everyone won! Your Seller got more money, you received your expected commission of 3%, and the Buyer walked away from the transaction Happy.
Not true. First you are assuming the amount of the commission. You are assuming that you know what is in the listing agreement. You do not know that.
And, if the buyer has caused the seller to renegotiate his/her commission, then the listing agent is not going to be happy.
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Instead of buying/selling being confrontational and as huge a pain to deal with as it currently is, a simple attitude adjustment such as Silverfall has made will most likely net you the Agent more money, and your Customers - Buyer & Seller will have good things to say about you....if instead you rigidly stick to your I keep 6% come hell or high water, then well you certainly angered the buyer who will in turn bad mouth you and your agency to all of his friends - thus alienating you from a group of 20 or more potential future clients....
Again, you are assuming a 6% commission, and assuming to know what is in the listing agreement. And you are considering the listing agent as being confrontational when it's the buyer who is attempting to have a third party contract negotiated?
What you are also saying is that if the listing agent does not roll over to every unrepresented buyers demand then the buyer will bad mouth the agent.
Could that threat be some sort of coercion that could cause the agent to agree under duress?
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I personally have a list of near 20 realtors/brokers who I tell everyone who asks me who they should use to sell their home to avoid. With the number of transactions and referrals I give to employees & friends I can assure these Agents/Brokers lost future listings by being rigid jerks in their dealings with me.
I suspect those "rigid jerks" are doing quite well by not dealing with "cheap jerks" who want to interfere with their contract.
I still think you have missed the point. The Seller and Broker did negotiate it ahead of time. The OP is asking the Broker to credit the buyers portion of the commission (if it applies) to him. Since he is a principal to the transaction this IS allowed.
I'm pretty sure you're wrong about this (at least in my state), but if I have time in the near future I will call our legal hotline to confirm.
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Originally Posted by marksmu
The listing agent is not working for free..The LA is working for 3%...the same 3% he/she should have expected to make in the first place....its just the Brokers really do not like it...they feel like they lost money when they had to credit it to the Buyer from their commission amount.
Ummm . . . I did just lose money because the contract that I negotiated with the seller says I get x% commission in this situation. I'm not sure why you don't get that. What if you had an employment contract that says "Mark gets a $10K bonus if he satisfies X requirements during the first year of his employment." At the end of the year you've met those requirements but your employer hands you a check for $1K. How would you feel?
My clients are happy at the end. PERIOD. Why? Because I've negotiated my fee with them and they fully understand it before we get started. So, at the end when I get they fee they know what I got and why I got it.
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Originally Posted by marksmu
Nowhere does there have to be any of this outrage, there is no Tortious Interference, there is no animosity, its just the buyers portion being credited to the Buyer from the Listing Broker. Its very simple....Brokers/Agents just do not like it b/c they are afraid it will become the norm and then more people will want to do it, and then they have fewer clients and thus less money. Its protection of their profession above the best interests of their clients.
You are so wrong here it's not even funny. Again, we have a CONTRACT with our clients. It's negotiated. We have agreed to it. Again, there ABSOLUTELY is more for me to do if there is one agent in the transaction. So, please explain to me where my client (the seller) becomes unhappy.
This post is so ridiculous I don't even know where to start.
This is absolutely ridiculous. Wouldn't you think that real estate agents and the attorneys they employ through their Realtor organization have developed tried and true, court tested contracts and methodologies? If someone wants to do it a different way than I'm doing it, they should have their head examined because they're opening themselves up to a lawsuit or perhaps are even doing it outside of the requirements of state law.
No one said not to use your form...I simply add an addendum to your form....I write contracts in plain language, not legalese. Your client can easily understand what I wrote and what its legal effect is. You are making WAY more out of this than there is to it. You have Thrown your hands up and quit, just like I said....your in the Good Ole Boy Club - Unwilling to change. I understand.
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Originally Posted by MikePRU
You seem to know the job a real estate agent inside and out or at least you claim to. Have you ever worked as one? Do you truly know what I do or the sacrifices I make to insure that my clients are as happy as possible? I absolutely have more to do when I'm the only agent involved. The risk of exposing myself to additional risk is also exponentially more. You say "just do it the right way and there won't be more risk." Of course! Why didn't I think of that? The risk is still there. It takes extra effort to make sure all my T's are crossed and I's dotted to insure I'm not exposed to that risk no matter what paper I have the unrepresented buyer sign. If something goes wrong in a transaction who do you think gets scrutinized first? It's not going to be the buyer.
Dotting the I's and crossing the T's is so easy that a caveman can do it. Your making way more out of this than there is. WAY MORE. The work may be more for you, but it will not amount to much more work. IF they ask you a question, you remind that you do not work for them and that you cant answer it...how hard was that?
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Originally Posted by MikePRU
If Hindukid wants to negotiate some of the commission back from the listing agent, I don't have a problem with that. But don't contact my seller to do it. He's hired me because he doesn't want to talk to you.
We agree here. He probably never would contact the seller if you agreed in the first place...the only incentive for you not to agree is more money. So whose interst are you actually looking out for?
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Originally Posted by MikePRU
This is by far the most non-sensical part of your post. I have a contract with my client. It says basically I get him the best deal possible. If I do that, I get x%. If there is no agent I get x% + y% (please note I did not write x times 2 as you lay people incorrectly think we get double commission which is often not the case). This is the price for services rendered that has been negotiated and agreed to by the seller. We have established services and fee rate. So, everyone is happy. Now please explain to me how it's still my fiduciary duty to automatically cut my pay when someone shows up without an agent. I've used my commission in the past whether I'm getting one side or two to make a deal happen and this is a tool I will continue to use. However, you and others who post here think I should just automatically take a pay cut.
Your not really cutting your pay - your getting what you expected to get had the person used a realtor. You think of that as a pay cut...its not. Anything over X is a bonus to you....a windfall if you will.
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Originally Posted by MikePRU
I'm sorry but if I'm not acting as a dual agent then the buyer is not my client. I'm going to hit them in the wallet and make it sting. Of course, I'm going to be sweet as pie while doing it. You won't know what hit you so much that you'll probably call me in a few years to sell the house.
No - nobody ever gets treated badly and later calls that same person back up to have them work for them. If you act like an ass, you will get zero repeat business. Selling a house to an unrepresented buyer is about doing your job and coming off as professional, helpful, and polite as possible....its very easy to do that when you have an open mind.
...You accepting a contract from an unrepresented buyer does NOT mean you are acting as a dual agent. You keep saying this, but it is NOT a true statement. All you have to do is send your agency letter that clearly says you are not representing the buyer and your additional risk and liability are 100% contractually eliminated. You continue to repeat this over and over and over again that its not worth the liability, etc etc, but the LEGAL answer is that once you have sent the letter and you are careful to act only on your clients behalf - there is no dual agency.
...
I keep saying this because you don't seem to understand the concept of "implied" agency.
Sure the buyer can sign the Agency Disclosure saying that the agent is representing the Seller.
However, the agent may take an innocent action, trying to be helpful, such as answering a simple question for the buyer, that can accidentally create an "implied" agency. Implied agency is created by action, and that action would override the written agency agreement. An agent cannot have a signed disclosure that he is not representing the buyer, and proceed to take actions and provide information that an "agent" would provide.
In court the buyers attorney would say, sure my client signed a disclosure stating that the listing agent is representing the seller.
HOWEVER, the listing agent proceeded to ACT as his agent by answering questions for him, and advising him when an inspection should be completed. Therefore, by the listing agents ACTIONS he created an "implied" agency, which also made him a Dual Agent, which is illegal because he did not have written consent from both buyer and seller to act as a dual agent.
I'm really puzzled that a corporate attorney (or any attorney, really) doesn't seem to get the concept of a legal and binding contract.
Then, of course, there's the fact that the contract for the commission the seller pays to the agent is between the seller and the agent (or the broker). The agent then determines what amount they are willing to pay another professional (the buyer's agent) to bring a buyer and do the cat herding on the buyer's side and to take on some of the liability.
I still think you have missed the point. The Seller and Broker did negotiate it ahead of time. The OP is asking the Broker to credit the buyers portion of the commission (if it applies) to him. Since he is a principal to the transaction this IS allowed.
The listing agent is not working for free..The LA is working for 3%...the same 3% he/she should have expected to make in the first place....its just the Brokers really do not like it...they feel like they lost money when they had to credit it to the Buyer from their commission amount.
Nowhere does there have to be any of this outrage, there is no Tortious Interference, there is no animosity, its just the buyers portion being credited to the Buyer from the Listing Broker. Its very simple....Brokers/Agents just do not like it b/c they are afraid it will become the norm and then more people will want to do it, and then they have fewer clients and thus less money. Its protection of their profession above the best interests of their clients.
I have been following this ridiculous thread from the beginning and I do understand the OP's point that has gone off in tangents in every other direction.
You liked to brag about working for free or not much and seem to think other people should like to is my point, well we don't. You even think we should show FSBO's when the seller won't agree to pay us. Really?
I would never handle things for the buyers side for free. Where you are wrong is thinking that because there is an unrepresented buyer that none of the work for the buyers side is done by the listing agent. That is just plain wrong. Also wrong is saying there is no greater risk. There is and that is why there are disclosures to sign. What break I would give a seller in circumstances like this would be discussed ahead of time and not once there is a buyer and the buyer would have no part in negotiating my commission. You can just plain dislike it all you want.
I don't think anyone is afraid of this becoming the norm. Dual agency with the same agent and unrepresented buyer happen rarely as it is. I'm not afraid of it at all. If there ever comes a day that things get stupid and it isn't worth it to practice real estate I'll do something else. In fact I think it's entirely possible this business will change, but I do not fear it. Since most of my income is in investments anyhow it's a different perspective than most of the other agents on here.
First, I have to make assumptions to have something to reply to....In everything I wrote, I am working in an imaginary 6% contract where the broker and the seller have agreed to a 6% commission with 3% going to the buyers agent. Thats the baseline assumption of the entire conversation...I get that they are different, but you have to start from somewhere to be able to have a conversation.
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Originally Posted by Captain Bill
Yes, their way is to interfere with a third party contract.
Please explain how one can EASILY the additional liability. (And by the way, I'm happy that you recognize that there is additional liability. Thank you for that.)
I'll pass that "contract away" information along to my E&O company to see if by "contracting away" any additional liability I'll get a reduction in premium. But then again, perhaps I shouldn't contact them because if I show them I'm taking on additional risk and can't explain how I'm "contracting it away" they may increase my premium.
You are protected by issuing your Agency letter and then by simply reminding the potential buyer that you can only answer questions pertaining to the property and its condition. If you want to be extremely cautious you can follow up every oral question you declined to answer with a short email saying the same thing. If you do that in writing every single time you have nothing at all to fear, EVER.
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Originally Posted by Captain Bill
. Please provide a link to the Texas statute that states an agent must renegotiate their employment agreement for a client.
Arizona law specifically speaks to that subject, and I suspect that Texas is the same. I'm interested in seeing the Texas law. Here is the Arizona law:
Nobody said you MUST negotiate with your client. The Texas law and Arizona law are similar here....Its another tool that you have to work with. You are not breaching any duty by refusing to lower share your commission....But if you do agree to lower your commission and then in turn you provide an inferior product to your Seller - it is then that you have breached your duty.
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Originally Posted by Captain Bill
Sorry but you are in error. As defined in the Realtor Code of Ethics a "Client" is a person with whom the agent has established a Client/Broker agency relationship. It can be either "implied" (accidentally by action), or "expressed" by written disclosure.
A "Customer" is a party to a real estate transaction who receives information, services, or benefits but has no contractual relationship with the Realtor or the Realtors firm.
An agent owes Fiduciary Duties to his/her client. To all other parties, customers, prospects, etc., the agent only owes the duty of Honesty and Fair Dealing.
It is NOT the listing agents job to make the buyer happy with the transaction. The only thing the listing agent owes the buyer is Honesty and Fair Dealing.
I agree its not required - but there is an old saying - you catch more flys with honey than vinegar. If you make the Buyer happy, you will win far more often than you lose. Its about personal relationships - you either see a buyer as an adversary or a customer....I use the term customer in the retail since of the word, not in the legal sense....I was pretty sure you understood that, but you seem to have taken it extremely literally.
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Originally Posted by Captain Bill
Not true. First you are assuming the amount of the commission. You are assuming that you know what is in the listing agreement. You do not know that.
And, if the buyer has caused the seller to renegotiate his/her commission, then the listing agent is not going to be happy.
Again, you are assuming a 6% commission, and assuming to know what is in the listing agreement. And you are considering the listing agent as being confrontational when it's the buyer who is attempting to have a third party contract negotiated?
I have to make assumptions to have a conversation, we have not been presented with an actual deal to pick apart here....There is no conversation to be had if we are not assuming an imaginary deal.
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Originally Posted by Captain Bill
What you are also saying is that if the listing agent does not roll over to every unrepresented buyers demand then the buyer will bad mouth the agent.
Could that threat be some sort of coercion that could cause the agent to agree under duress?
I suspect those "rigid jerks" are doing quite well by not dealing with "cheap jerks" who want to interfere with their contract.
If a Listing Agent is a jerk, he is a jerk. A buyer will never be happy with him, and he will tell everyone he knows that.
A person is not Cheap by not using a realtor....that is another assumption that realtors make. I can assure you that I have steered more than 50 people away from realtors who acted like you are acting. You are not winning by acting so stubborn. You may make a living, you may even make a lot of money, but I guarantee you that you are making less than you could be making if you treated everyone like they deserve to be treated. You have an attitude towards non-realtors buying property. I would steer clients away from you.
I'm really puzzled that a corporate attorney (or any attorney, really) doesn't seem to get the concept of a legal and binding contract.
I'm resisting the urge to say what I am thinking...so let me dumb it down for you...Ill use small whole numbers for you so you can follow the math without a calculator.
LA contracts with seller to sell a house for $100,000 with a 10% commission. The local accepted norm as to commissions is that the listing broker gets to keep 5% and the buyers broker keeps 5%.
Unrepresented individual we will call a "Buyer" comes to the table and tells you the Listing Broker - I will buy that house for $100,000 but only if you agree to credit me the Buyers portion of the commission $5000.
Broker now has 2 options.
1) Reject the Buyer b/c he is unwilling to offer 5% to the Buyer
2) Accept the Buyers proposition and sell the house and credit back 5% to Buyer.
Nowhere has the Buyer interfered with a contract between seller and Agent. The Seller PAID the LA 10%. The LA refunded the Buyer 5%.
That is a VERY basic concept.
There was no modification of any contract anywhere....everything went exactly as it was originally written.
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Originally Posted by TexasHorseLady
Then, of course, there's the fact that the contract for the commission the seller pays to the agent is between the seller and the agent (or the broker). The agent then determines what amount they are willing to pay another professional (the buyer's agent) to bring a buyer and do the cat herding on the buyer's side and to take on some of the liability.
And out comes the good ole boys club mentality again....only a professional can do this so if you are not a professional I wont deal with you, followed up with the gem that all buyers are idiots and need to be herded like cats.
One of the things this discussion has done is prompt me to develop an office policy regarding unrepresented buyers that any agent in my office will be required to follow. The policy will be in the Risk Management section of my policy manual.
It'll probably take a month or so because I'll be seeking advice and recommendations from other brokers as well as my attorney. I'll also be consulting with some of my sellers to get their feedback.
If any agents and brokers on the forum would like to have a private email discussion to exchange ideas on developing such a policy for your office also, contact me and we'll exchange email addresses. Note that we will only be discussing a policy of how to deal with unrepresented buyers and what to include in the listing agreement, if anything. We will not discuss commission amounts, as that would be illegal.
I'm also open to receiving suggestions from non-agent forum members. Please make your suggestions on the thread. It should be understandable that the email exchanges need to be with agents and brokers whom I can identify in order to know who we're communicating with.
I have the buyer sign a form that indicates that have elected to represent themselves and I am not in any way representing them. I will just provide them with blank real estate forms for ease of the transaction.
We have a form just like it for when we work with FSBO's. Same thing. Working with, but not representing. I also provide them with a copy of the agency disclosure form even though they aren't my client so they are clear on my fiduciary duties to my client.
Definitely have your attorney review your form for you. They will legalese it for you.
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