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Old 08-08-2012, 12:04 PM
 
Location: Gilbert - Val Vista Lakes
6,069 posts, read 12,711,074 times
Reputation: 3810

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This whole thing amounts to GREED by a few people, who THINK agents are overpaid, and THINK they have some RIGHT TO YOUR COMMISSION. And they THINK they have the right to interfere with your contract.

They are obviously weak negotiators because instead of negotiating with the listing agent for a good price, they are asking the seller to renegotiate the commission with the listing agent.

They do not have the skills to negotiate a good price for a home. They don't have the negotiating skills to find a "good" buyers agent and negotiate a large rebate from him/her, and negotiate a good price for them. Since they don't have the negotiating skills the only way they know to get a better deal is to coerce the seller into renegotiating with the listing agent to give the buyer some of his commission.

 
Old 08-08-2012, 12:10 PM
 
Location: Salem, OR
13,762 posts, read 31,693,870 times
Reputation: 12145
Quote:
Originally Posted by marksmu View Post
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.
Whether or not their is a legal "buyer agent" portion or not depends on the listing agreement. Most out here are written as such and such fee to the listing agent. No buyer agent fee mentioned in the agreement, so whether or not their is a buyer agent portion or not depends on your perspective. From a contractual perspective, I'd say there isn't one. As such there isn't a portion to ask for, in a contractual sense, on most standard listing agreements.

I don't use the standard agreements. My attorney wrote one just for my brokerage and how I do business. We don't call it a credit out here, but just state that we will waive that portion of the listing fee for unrepresented buyers.

Despite all of this arguing, it is a rare thing. I have an unrepresented buyer on a listing about once a year. Still worth having an office policy over it, but it isn't common place. I don't know. I still don't see it as being more work than a regular transaction. I set up a Google calendar with all of the timelines just like I do now. I just add them, instead of the buyer agent to it. I follow up with lender just like I do with my clients. The only difference is that I have to let them in for inspections and hang out there, but I just bring my laptop or ipad and work from my clients house for three hours. Most don't know to do radon testing, etc and just stick with the regular full home inspection so that part tends to be easier. I'm so used to working in any place but the office so this isn't weird to me.

I think there is only increased liability if agents step out of bounds and try and take on too much. Then you can get into implied agency issues, but that is an agent issue not a buyer issue.
 
Old 08-08-2012, 12:20 PM
 
Location: Gilbert - Val Vista Lakes
6,069 posts, read 12,711,074 times
Reputation: 3810
Quote:
Originally Posted by marksmu View Post
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%.
Just to correct this statement and put it into the real world context.

Seller agrees to pay LA a 10% commission for selling the home. LA and Seller agree that the LA will pay a Buyers Broker 5%. The listing agent can have an agreement with the seller that the LA will only pay buyer Broker 2%. (It is the LA that pays the other Broker)

Quote:
Marksmu......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%.
My response below is based on the fact that I interpret "coming to the table" as to mean the buyer contacts the LA to ask the question. There is no offer, and no contact is presented. If your definition of "coming to the table" is different, then that may change my answer.

Just to be clear, this scenario, as I interpret it, is different from the other scenarios where the buyer is asking the seller to renegotiate the contract. In this case, if the buyer is simply contracting the LA prior to any offer, and the buyer has not contacted the seller, then there is no interference, just a request.

The LA has no legal obligation to reduce the commission in any case.

In this scenario, provided no offer has been presented; if the LA elects 1), the conversation is over.
 
Old 08-08-2012, 12:35 PM
 
3,404 posts, read 4,157,192 times
Reputation: 2397
If a buyer were represented with their own agent would you as a listing agent be willing to negotiate your listing contract and commission with this buyer and their agent? If it helps the sellers bottom line look better and sells the house then why not? Isn't your first priority to your seller? I don't mean it guys I'm trying to make a point here. Why should it be considered acceptable just because the buyer is unrepresented? If it is then why not have the listing agents commission up for grabs all the time? When it becomes the norm I will find a different business to be in. And I agree with Captain Bill, there is some greed going on here and it isn't the listing agent. People that count other peoples money instead of their own are greedy.
 
Old 08-08-2012, 12:47 PM
 
Location: Central Texas
19,919 posts, read 36,520,628 times
Reputation: 21413
Quote:
Originally Posted by Greatday View Post
The Listing Agent is working for whatever is negotiated - it might be 1%, 2% - there is NO SET AMOUNT.
Right. All that some folks know is that whatever it is, they really want to get their hands on it!
 
Old 08-08-2012, 01:03 PM
 
Location: Salem, OR
13,762 posts, read 31,693,870 times
Reputation: 12145
Quote:
Originally Posted by Zyngawf View Post
If a buyer were represented with their own agent would you as a listing agent be willing to negotiate your listing contract and commission with this buyer and their agent? If it helps the sellers bottom line look better and sells the house then why not? Isn't your first priority to your seller? I don't mean it guys I'm trying to make a point here. Why should it be considered acceptable just because the buyer is unrepresented? If it is then why not have the listing agents commission up for grabs all the time? When it becomes the norm I will find a different business to be in. And I agree with Captain Bill, there is some greed going on here and it isn't the listing agent. People that count other peoples money instead of their own are greedy.
Apparently listing agents think buyer agent compensation is up for grabs. I've been asked by other agents to reduce my fee 5 times this year. Really...how is this different?
 
Old 08-08-2012, 01:10 PM
 
Location: Gilbert - Val Vista Lakes
6,069 posts, read 12,711,074 times
Reputation: 3810
Quote:
Originally Posted by Silverfall View Post
Apparently listing agents think buyer agent compensation is up for grabs. I've been asked by other agents to reduce my fee 5 times this year. Really...how is this different?
That hasn't been happening here that I'm aware of. But I would just say NO!
 
Old 08-08-2012, 01:17 PM
 
Location: Salem, OR
13,762 posts, read 31,693,870 times
Reputation: 12145
Quote:
Originally Posted by Captain Bill View Post
That hasn't been happening here that I'm aware of. But I would just say NO!
Oh I do, but it still irritates me. If they didn't want me to have that amount, they should have offered me less on the MLS.
 
Old 08-08-2012, 01:38 PM
 
1,731 posts, read 2,291,840 times
Reputation: 3428
Quote:
Originally Posted by Captain Bill View Post
This whole thing amounts to GREED by a few people, who THINK agents are overpaid, and THINK they have some RIGHT TO YOUR COMMISSION. And they THINK they have the right to interfere with your contract.

They are obviously weak negotiators because instead of negotiating with the listing agent for a good price, they are asking the seller to renegotiate the commission with the listing agent.

They do not have the skills to negotiate a good price for a home. They don't have the negotiating skills to find a "good" buyers agent and negotiate a large rebate from him/her, and negotiate a good price for them. Since they don't have the negotiating skills the only way they know to get a better deal is to coerce the seller into renegotiating with the listing agent to give the buyer some of his commission.
There are only two parties who are heavily vested in a real estate transaction.

1) The Buyer
2) The Seller.

If there is Greed, its on behalf of the real estate agents...especially as the house price escalates. Any costs of the realtors pale in light of the cost of the property....You think it is greed on behalf of the Buyer...I think its greed on behalf of the seller....Some Agents can pull buyers out of thin air in a down market - and they may be worth it...but many just get a listing, put it on MLS and wait for the buyers agents to come knocking.

Please tell me how a Listing Agent has EARNED a $60,000 commission on a $1,000,000 property for taking some photos and pasting it online. (THIS IS AN ASSUMPTION OF A 6% COMMISSION AND A BUYER COMING WITHOUT AN AGENT)

I understand that the 6% is the NORM in my area, but what I dont understand is why? That $60,000 HAS been factored into the listing price of the property by the Seller, so please tell me why a realtor who will do less than 20 hours of actual work deserves to be paid more than a normal Joe Blow working 8-5, 5 days a week, 51 weeks a year? Please enlighten me as to the special skills involved in this. I dont see it.

The best explanation so far has been with high risk comes high reward...I get that...I am a free market capitalist. However, I am also a realist - the reality is that the value added is not worth the cost, BUT because it has been this way for so long MOST people do not know of another way to do things.

Add in the fact that realtors have an incredibly powerful lobby and use that lobby to cement their hold on restricting real estate transactions and you have the answer....Real Estate Brokers/Agents are protecting each other and the inflated cost of selling is built into the price of every single home....I dont see how it can be called GREED on behalf of the buyer...he is the one paying you b/c the Seller has already factor your cost into the deal.
 
Old 08-08-2012, 02:21 PM
 
Location: Salem, OR
13,762 posts, read 31,693,870 times
Reputation: 12145
Quote:
Originally Posted by marksmu View Post
There are only two parties who are heavily vested in a real estate transaction.

1) The Buyer
2) The Seller.

If there is Greed, its on behalf of the real estate agents...especially as the house price escalates. Any costs of the realtors pale in light of the cost of the property....You think it is greed on behalf of the Buyer...I think its greed on behalf of the seller....Some Agents can pull buyers out of thin air in a down market - and they may be worth it...but many just get a listing, put it on MLS and wait for the buyers agents to come knocking.

Please tell me how a Listing Agent has EARNED a $60,000 commission on a $1,000,000 property for taking some photos and pasting it online. (THIS IS AN ASSUMPTION OF A 6% COMMISSION AND A BUYER COMING WITHOUT AN AGENT)

I understand that the 6% is the NORM in my area, but what I dont understand is why? That $60,000 HAS been factored into the listing price of the property by the Seller, so please tell me why a realtor who will do less than 20 hours of actual work deserves to be paid more than a normal Joe Blow working 8-5, 5 days a week, 51 weeks a year? Please enlighten me as to the special skills involved in this. I dont see it.

The best explanation so far has been with high risk comes high reward...I get that...I am a free market capitalist. However, I am also a realist - the reality is that the value added is not worth the cost, BUT because it has been this way for so long MOST people do not know of another way to do things.

Add in the fact that realtors have an incredibly powerful lobby and use that lobby to cement their hold on restricting real estate transactions and you have the answer....Real Estate Brokers/Agents are protecting each other and the inflated cost of selling is built into the price of every single home....I dont see how it can be called GREED on behalf of the buyer...he is the one paying you b/c the Seller has already factor your cost into the deal.
A $1M+ home is a luxury home in most areas and agents do not just take some photos, and throw it on the MLS. Good agents take pro shots which on those large homes often involve two shoots to get twilight shots so they can run you $1,000 for photos. A good quality video will be $1-$2k. Staging will often be several thousand. Broker luncheons are $500+ since they are often catered in that price range. There there are custom websites...on and on. Luxury homes are not marketed in the same way as a $200,000 home is.

See the problem that you have is that when you help people write up contracts for homes you just do the contracts, you do zero marketing, nor do you show any properties. Marketing takes time, effort and money. It isn't 20 hours worth of work. Not even close. I spend more time than that on my $125,000 listings. The average home for me from list to close is about 50-80 hours of work, not including short sales. I do time studies every other year to track how much time it takes me to do things. So on a $125,000 listing I make about $60 an hour. I need to make about $125-$150 an hour to pay business overhead, pay taxes, and then actually make money. Cheap listings are essentially pro bono work.

Making $60 an hour as an employee with taxes and expenses paid already is not the same thing as a business owner bringing in $60 an hour who then has to pay taxes and business expenses. So on that $1M home, if I make $30k and only put in 100 hours, I make $300 an hour. Put aside the additional marketing expenses for a minute and the increased risk you have with luxury homes. Seems like a lot to some people but as a business owner, if I don't do that, I can't sell cheap homes. I would have to walk away from helping people. We need to make a higher rate on expensive homes to offset the essentially pro bono work we do on cheaper homes.
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