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Old 08-13-2012, 03:26 PM
 
3,404 posts, read 4,137,534 times
Reputation: 2397

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Quote:
Originally Posted by MikePRU View Post
I think this is where there is some confusion. Personally, I don't have a problem with it if a buyer comes to me and asks me to rebate them some commission especially if I'm the sole agent involved in the transaction. That would be a negotiation between myself and the buyer and should I decide to give them a rebate then that would be a seperate agreement between myself and that buyer outside of the purchase contract and outside of the listing agreement. However, that's not what the OP said. What he proposed was approaching the seller about reducing my commission. I have several issues with that. First, it's compensation I am due for services rendered and therefore you are interfering with a contract that you are not a part of. Second, it's just a bad strategy on the part of the buyer because if there is any commission reduction agreed to by the seller they will want to be the one to recognize those savings. Lastly, no matter what you (Mark) say or think it is more work and there is more exposure when representing both sides of a transaction. Walk a mile in my shoes and then get back to me.

I would also add that assuming one or either side of the comission is 3% is absolutely absurd. As a buyer, you have no idea what the listing agreement says or even what the co-broke fee is. If you want to negotiate with me fine, but don't assume you know what the contract says. Also, buyers have this perverse misconception that I pocket the entire commission. After my split and my expenses are deducted, I take home quite a bit less.
He didn't just propose approaching the seller. He seems to think the listing agent should forward an email from himself to the seller. One reason people hire agents is so that they do not have to handle negotiations directly with the other side. He is upset that we wouldn't help him contact our client directly. That's too much to ask.

I prefer to spell it out in a listing contract what commission will be in the case of an unrepresented buyer. I would give a seller a break, but not in the entire amount I would have allowed for paying a buyers agent. I think this is fair, because it is more work. And I would be happy with this, because though it isn't the whole thing it is more than I was expecting to get for the work on this listing. Showing a house to a buyer is the easy part. My job doesn't stop once the contract is signed and there is more liability doing work for both sides.

Those of you that want to argue about the whole illegal interference thing, I do think that is silly. It is between the listing agent and the seller and no one else can change anything. Literally anyone can suggest to anyone else to try to renegotiate a contract. I don't see how that could be illegal. As a listing agent you likely would not know who suggested this to your client and you couldn't prove it if you did know, so good luck with that lawsuit.

 
Old 08-13-2012, 03:27 PM
 
1,722 posts, read 2,269,093 times
Reputation: 3414
Quote:
Originally Posted by RE Skeptic View Post
All legal discourse aside, from the agents monetary perspective, what is the difference between the agent giving a seller a 1% rebate and reducing the BA commission 1% with the seller and dropping the price by that amount (assuming the seller agrees)? The only difference I can think of is the former option can be accomplished without the sellers knowing. I can see where that would be advantageous to both the buyer and agent, but doesn't that violate your obligation to look out for the sellers agent?
No it is not a violation of the duty to the Seller b/c what the Agent does with his commission is none of the Sellers business. It is his commission, earned when he brings a willing and able buyer to the table...if he has to give it all away to get a buyer, it is still not the Seller's business.
 
Old 08-13-2012, 03:33 PM
 
397 posts, read 491,297 times
Reputation: 210
Quote:
Originally Posted by marksmu View Post
No it is not a violation of the duty to the Seller b/c what the Agent does with his commission is none of the Sellers business. It is his commission, earned when he brings a willing and able buyer to the table...if he has to give it all away to get a buyer, it is still not the Seller's business.
Thx for clarifying that.
 
Old 08-13-2012, 03:35 PM
 
Location: NJ
17,579 posts, read 38,288,152 times
Reputation: 16098
Quote:
Originally Posted by marksmu View Post
No it is not a violation of the duty to the Seller b/c what the Agent does with his commission is none of the Sellers business. It is his commission, earned when he brings a willing and able buyer to the table...if he has to give it all away to get a buyer, it is still not the Seller's business.
I agree with this. Just like I don't know how much the split is between the agent and the broker. That is the agent's business. As long as everything is on the up and up (whatever is required to be disclosed is) I don't care what the agent does with their commission.
 
Old 08-13-2012, 06:45 PM
 
Location: Pinal County, Arizona
25,107 posts, read 34,357,433 times
Reputation: 4893
Quote:
Originally Posted by marksmu View Post
The bottom line is clear. A listing agent does not have to negotiate his commission at all....ever. Its spelled out in every state. .
How is the listing commission "spelled out in every state"?
 
Old 08-13-2012, 07:01 PM
 
Location: DFW - Coppell / Las Colinas
29,920 posts, read 34,517,946 times
Reputation: 35917
The OP never answered the question why he did not write something in Special Provisions of the offer that addresses the lack of representation and the desire for that to equal money in his pocket.

OP what was the purpose of not making it part of the official offer in writing ? If you want the Seller to address an issue, make it a part of the offer and not in an email.

Help me understand. Did you think it would be rejected more easily ?
 
Old 08-13-2012, 07:40 PM
 
Location: Needham, MA
6,324 posts, read 9,023,459 times
Reputation: 5324
Quote:
Originally Posted by RE Skeptic View Post
All legal discourse aside, from the agents monetary perspective, what is the difference between the agent giving a seller a 1% rebate and reducing the BA commission 1% with the seller and dropping the price by that amount (assuming the seller agrees)? The only difference I can think of is the former option can be accomplished without the sellers knowing. I can see where that would be advantageous to both the buyer and agent, but doesn't that violate your obligation to look out for the sellers agent?
What I do with my paycheck once I've earned it is my business and mine alone. If I should happen to use some of that paycheck to make the deal happen then that's really between me and whoever I'm sharing with. If I'm the only agent in the transaction, the other party sometimes finds out and is usually quite grateful for my actions.

Regardless, as a buyer it's not a very shrewd business move to approach the seller for a commission reduction. Why would you not want to be the sole beneficiary of any commission reduction? If you involve the seller they're going to want to recognize the savings themselves. Skepticism will only get you so far, even if you had achieved a commission reduction, it sounds like you really could have used a buyer's agent.

Quote:
Originally Posted by RE Skeptic View Post
As I explained in a previous post, I know b/c the LA told me.
OK. I haven't read every single post in the thread as it's been pretty long. When it got a little ridiculous I tuned out as well.

This being said, this is not information generally available to the public. It's certainly not something I would ever share as it's no one's business except for those that are a party to the listing contract. As I've said time and time again, the listing contract is a negotiation. At times, my listing agreement has featured a special clause for situations where I represent both parties in the transaction. So, if I'm already making less (let's say 5%) do you think I'm apt to then reduce my commission by the value of a typical side (say 3%) resulting in my earning less (2% in this example) than I would if I had just represented one side? Does that sound fair?
 
Old 08-14-2012, 05:45 AM
 
3,174 posts, read 2,720,497 times
Reputation: 6477
Quote:
Originally Posted by RE Skeptic View Post
Regardless of the posturing in this thread, I think most savy agents would negotiate an unrepresented BA commission if it leads to a sale a reasonable commission check.
I agree with this. For the vast majority of Realtors I imagine it's easier to walk away from $24,000 in a hypothetical situation on the Internet than in real life.
 
Old 08-14-2012, 05:51 AM
 
397 posts, read 491,297 times
Reputation: 210
Quote:
Originally Posted by Rakin View Post
The OP never answered the question why he did not write something in Special Provisions of the offer that addresses the lack of representation and the desire for that to equal money in his pocket.

OP what was the purpose of not making it part of the official offer in writing ? If you want the Seller to address an issue, make it a part of the offer and not in an email.

Help me understand. Did you think it would be rejected more easily ?
I assumed that the SA would be legally and ethically bound to present all offers, regardless of their form, to the sellers. To be honest, I don't know the exact law in my state, but another poster did point out that the Realtor Code of Ethics (a national norm) states that offers should be presented "objectively and as quickly as possible". After I sent the email offer, I wondered about the specific obligation of the LA to forward it. This was the impetus of my OP.

Many of you have stated that sellers deserve to hear all offers including verbal offers. Compared to a verbal offer, an email (that is forwarded to the seller) is a more objective (accurate) and efficient way of communicating an offer to a seller. There is simply less room for filtering, editing and spinning an email than a verbal offer.

Why an email over a written offer? For the same reason people submit a verbal offer, it is easy and quicker and some buyers may not have access to forms which can be closely guarded by state RA Associations. I was not trying to game the system or avoid some legal loophole by keeping it out of the "standard" contract.

I wonder if SAs who refuse to forward emails are letting their interests supercede that of their sellers. The only difference b/t an email and a verbal offer is the agents ability to change or delete the offer to their sellers. The suggestion that LA are protecting their sellers by filtering offers is insulting to the average seller.

In my email I stated that the description of my unrepresented status was an integral part of the contract. Thus, it was clear that my email was part of my ".offer"

Several of you have suggested that I clarify my unrepresented status and request for a "rebate" in the contract as an official addendum. I think this is a good suggestion and one that I will use in the future.

The question is...if the buyer puts this in the contract, would you give the written offer to your seller? If the answer is yes, why wouldn't you forward and email?
 
Old 08-14-2012, 08:29 AM
 
Location: Gilbert - Val Vista Lakes
6,069 posts, read 12,670,408 times
Reputation: 3809
Quote:
Originally Posted by RE Skeptic View Post
I assumed that the SA would be legally and ethically bound to present all offers, regardless of their form, to the sellers. To be honest, I don't know the exact law in my state, but another poster did point out that the Realtor Code of Ethics (a national norm) states that offers should be presented "objectively and as quickly as possible". After I sent the email offer, I wondered about the specific obligation of the LA to forward it. This was the impetus of my OP.
In your OP you stated that you emailed a scanned, signed contract, and made statements in the email.

The email is not part of the contract. It is a cover letter. The agent is under no obligation to forward a cover letter. Whether s/he will or not is up to the agent.

Quote:
by RE Skeptic-----
Many of you have stated that sellers deserve to hear all offers including verbal offers. .
The agents have said they are required to submit all offers unless the seller has issued written instructions to the contrary.

Quote:
RE Skeptic-----Why an email over a written offer? For the same reason people submit a verbal offer, it is easy and quicker and some buyers may not have access to forms which can be closely guarded by state RA Associations. I was not trying to game the system or avoid some legal loophole by keeping it out of the "standard" contract.
It's more correct to say "copyrighted" by the Owners of the contracts who paid for their development. However, an unrepresented buyer can ask the listing agent to send them the contract forms to be used in the offer for his/her listing. S/he can do that because it is with her transaction (I'm referring to AZ).

The problem with email and verbal offers is that all the terms are not going to be spelled out, and when it comes to reducing it to a contract, the terms will most likely be different from what the other party understood. It certainly can be done, but since the email is still a verbal contract, neither party is committed until it's an executed contract.

Another problem is that a verbal contract for real property is not enforceable. However, if a court were to decide that an email offer (in this changing digital society) is enforceable, there could still be one or more required elements missing (required in order to be a "valid" contract) from the email. Another thing; since the details would not be spelled out as they are in the contract form, either party may have thought they had mutual agreement, but when reduced to the contract form they may find that they did not have a "meeting of the minds", which is an essential element to a valid contract.

Quote:
by RE Skeptic-----I wonder if SAs who refuse to forward emails are letting their interests supercede that of their sellers.
No, they are not required to forward cover letters; only the contract.

Quote:
by RE Skeptic-----In my email I stated that the description of my unrepresented status was an integral part of the contract. Thus, it was clear that my email was part of my ".offer"
The email was not part of your offer. It was a cover letter. In order for it to be part of your offer it would need to be an "addendum" to the offer, and the offer would refer to the addendum. Had you consulted with a "real estate" attorney, s/he would have given you some sound advice.

Quote:
Re Skeptic-----Several of you have suggested that I clarify my unrepresented status and request for a "rebate" in the contract as an official addendum. I think this is a good suggestion and one that I will use in the future.
In Arizona it is a bad idea to address any third party contracts within a real estate purchase contract. Once again, before you start doing things like that, seek the advice of a competent real estate attorney. Below is what Michelle Lind, Esq., writes on that subject.

Quote:
Michelle Lind, Esq., General Counsel for Arizona Association of Realtors: (from her book on AZ Real Estate Law), ..."The purchase contract should not be used to address broker compensation or commission issues. The (purchase) contract is an agreement between the buyer and the seller outlining each party's rights and obligations in the sale of a property. The contract should not be utilized to negotiate or renegotiate the rights and obligations of third parties, including the broker (and salespersons)..." "...These agreements are separate to avoid disputes and liability, and should remain so. The AAR contracts clearly state that any commission due as a result of the transaction will be evidenced by a separate written agreement. Negotiating the commission in the contract can lead to disputes and increased liability..."
Quote:
Quote by RE Skeptic-----The question is...if the buyer puts this in the contract, would you give the written offer to your seller? If the answer is yes, why wouldn't you forward and email?
  • The agent is required to submit all offers.
  • The agent is not required to forward emails or cover letters.
If I received an offer that has the commission as a term, I would submit the offer, as required, and advise my client that commissions should not be addressed in the purchase contract, and provide him with a copy of Michelle Lind's statement.

I may also advise him that I would be contacting my attorney since there is potential liability for me if he instructs me to work with that contract which is attempting to interfere with a third party contract within the purchase contract.

If s/he counters the offer with the commission in it, then s/he is in effect rejecting the contract because the buyer does not have to agree to the countered terms, and can reject the counter and not respond.

My recommendation would probably be that s/he reject the contract outright and request the buyer to resubmit a clean contract without any reference to agent commission. (It may depend on how my attorney advises me). if the client elects to counter with that language in the contract, then I would probably recommend that he also seek legal advice because of the potential liability.

The question on email cover letters being submitted to the seller has been asked and answered multiple times. It is not required.
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