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Old 07-30-2012, 07:19 PM
 
Location: NJ
17,579 posts, read 38,347,516 times
Reputation: 16099

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Quote:
Originally Posted by hindukid View Post
Seller can take a stand by firing their agent. Situation of an unrepresented buyer should have been covered in advance. IMO, it is ridiculous for a seller's agent to pocket 6% commission if a buyer comes to the table without an agent. In most situations half of the commission is allotted to compensate a buyer's agent. If there is no buyer's agent then there is about a 3% efficiency savings. In my mind seller trying to pocket 100% of that savings is not being fair to his client. His workload did not go up or at least not by much and IMO agent is taking advantage of the client.

If I were the seller I would not be happy with my agent at all. If I am locked into a contract for a certain amount of time I guess I would deal with it, but the day it expires is the day my agent is fired. Now however if the agent wants to do 4% that is reasonable and something I could work with.

However this situation has been hashed over and over on this board. It seems that realtors do not want to change. They want the full 6% commission because they feel that they have earned it. The easier solution is to go find a buyer's agent and get them to rebate you as much as you can. Probably you can find an agent willing to handle the transaction for a few grand and rebate the rest to you. Which on a 800K house will be a lot.
You should fire yourself for signing a contract you weren't happy with.

 
Old 07-30-2012, 07:19 PM
 
Location: Salem, OR
13,750 posts, read 31,601,217 times
Reputation: 12124
Quote:
Originally Posted by Zyngawf View Post
I agree. I think too many potential problems could happen trying to renegotiate commission in the middle of things.
Totally agree. I know that's why I do it upfront. My clients know what to expect and we can move through the offer much faster. Might have to add this to my list I spew out when people ask on CD how to pick a good agent. I think a good agent deals with commission questions upfront.
 
Old 07-30-2012, 07:20 PM
 
2,632 posts, read 4,352,553 times
Reputation: 2080
Quote:
Originally Posted by Silverfall View Post
I don't have an issue with the OP's tone, but I'm a direct person too. I just know from experience that most people need things presented to them in a more soft manner and email doesn't cut it. As an agent, I don't want my clients inserting the wrong tone into something and getting offended if we can work through something. It is a style thing.

I think you are stuck on the angle that everything is the same. You need to consider that 1) agents may not be able to adjust their compensation willy nilly, and 2) that it isn't already addressed in the listing agreement. What is there to negotiate if the unrepresented buyer issue is in the listing agreement? Because so many forums suggest buyers go it alone and take that 3% for themselves it is very common in my area to have that issue addressed up front with clients. This isn't a new conversation. I've been an agent for 8 years and the conversation is at least that old.
No, I'm not stuck on any angle. Nor did I suggest that the agents would agree or be free to "adjust their compensation willy nilly." Please re-read what I said. ANY contract issue (including the one in your point 2)) can be *re-opened* if the seller and the seller's agent (and broker) agree to re-open the conversation. That is the nature of contracts. They may agree to that if the buyer is offering them good terms such that everyone comes out ahead given the risk that a better buyer may not be coming forward. Sellers are always free to turn down an offer, and if the offer isn't for list price (which most are not) it is highly likely that the seller can walk away without paying any commission. So it is in the agent's/broker's interest to work with the seller to revisit the contract, if the buyer is putting forward a good offer but one in which the buyer wants to share some of the buyer agent savings. However, the agent and broker may decide they are unwilling to reduce the commission and tell the seller "no", in which case they need to go back to work to find another buyer (unless of course the buyer decides to cave).

I gave you the example (which I have seen happen multiple times, and I am sure you have also) where a SA, probably frustrated with spending many hours trying to sell a house, is able to close the deal only if the SA agrees to cut his/her own commission, because the seller can't afford to or won't come down further in price. I am sure that was not in the contract at the time it was signed and all the parties were enthusiastic about prospects. The OP's situation is simply another example where, if all parties want the deal done, they agree to revisit things.
 
Old 07-30-2012, 07:46 PM
 
Location: Salem, OR
13,750 posts, read 31,601,217 times
Reputation: 12124
Quote:
Originally Posted by ACWhite View Post
No, I'm not stuck on any angle. Nor did I suggest that the agents would agree or be free to "adjust their compensation willy nilly." Please re-read what I said. ANY contract issue (including the one in your point 2)) can be *re-opened* if the seller and the seller's agent (and broker) agree to re-open the conversation. That is the nature of contracts. They may agree to that if the buyer is offering them good terms such that everyone comes out ahead given the risk that a better buyer may not be coming forward. Sellers are always free to turn down an offer, and if the offer isn't for list price (which most are not) it is highly likely that the seller can walk away without paying any commission. So it is in the agent's/broker's interest to work with the seller to revisit the contract, if the buyer is putting forward a good offer but one in which the buyer wants to share some of the buyer agent savings. However, the agent and broker may decide they are unwilling to reduce the commission and tell the seller "no", in which case they need to go back to work to find another buyer (unless of course the buyer decides to cave).

I gave you the example (which I have seen happen multiple times, and I am sure you have also) where a SA, probably frustrated with spending many hours trying to sell a house, is able to close the deal only if the SA agrees to cut his/her own commission, because the seller can't afford to or won't come down further in price. I am sure that was not in the contract at the time it was signed and all the parties were enthusiastic about prospects. The OP's situation is simply another example where, if all parties want the deal done, they agree to revisit things.

The flip side...

A good agent discusses with their client a variety of commission issues that might come up and talks openly with their seller about these so the seller is aware of their business practices. The sellers love their agent as he/she has worked hard for them. A buyer sends an offer by email, along with an email they want forwarded to the seller because they want to make sure that the seller is aware they are unagented and doesn't trust the listing agent to convey that information. The sellers are miffed at the email and feel the buyer is unreasonable and a jerk. They decide not to negotiate and tell the buyer to go away.

The issue at play here really is, does the listing agent have enough good judgement to know if the communication they receive from the buyer directly is something that is appropriate for their seller and their transaction. Right? The OP wants to know if the LA has to legally present their email communication or not. The problem with walking in and immediately asking for a renegotiate on the contract is that the buyer has no idea if the clients love and value their agent or not. I'm just saying that walking in and asking for a cut in commission can be seen as an "in your face" move but some of the more sweet tempered people out there, where kindness and courtesy matter. I'm just saying that if buyers want to ask, go for it, but some sellers will get upset that the buyer asked.
 
Old 07-30-2012, 07:56 PM
 
Location: NJ
17,579 posts, read 38,347,516 times
Reputation: 16099
Personally I would not take kindly to a buyer "reminding" me that I can renegotiate my contract with my agent. It would give me the impression they must think I am stupid if I couldn't figure that out on my own. And even if I did have something in my agreement for a lower commission for an unrepresented buyer I wouldn't be giving that savings over to a buyer.
 
Old 07-30-2012, 07:58 PM
 
397 posts, read 492,008 times
Reputation: 210
Quote:
Originally Posted by nikitakolata View Post
It isn't simply that the sellers need to "take a stand." The sellers have signed a contract with the listing brokerage. They cannot simply change their mind about paying the commission. If sellers could do that then no real estate agent ever would ever get paid. Also, the contract is with the brokerage the list agent works for, not with the specific agent. So, even if the agent were willing to take a smaller commission, their managing broker may not allow that (and why should they when they have a signed contract?).

If contracts can be voided and changed with the snap of ones fingers they are not worth the paper they are written on.

If the contract states that the commission payable will be reduced in the event that a buyer is un-represented, then the commission will be reduced. That is an agreement between the seller and the listing brokerage. Period. Even if the commission payable is lower, it does not mean the seller will accept a lower price. They may accept a lower price and they may not, but that is not because of real estate agent greed anymore than it is because of the seller's greed.
The agent is the owner/broker (small independent). I know the BA commission is 3% b/c the agent told me, but it really doesnt matter what the commission is, as we talking more about the principles of the debate, not exact #s.

Not suggesting that the sellers can get out of contract nor do I think I will get all 3%. The contract can only be amended if both parties agree, I get that. If they agree, there is most likely something in it for both parties. I am not (as) abrasive when I negotiate. Fully aware the more I write, the worse I sound, thats why email was limited to 2 bullets points: 1) flexible closing; 2) unrepresented buyer. I did not suggest that the seller break his contract or renegotiate it, and in all likelyhood if the deal closes, I will never know.

All I know, is that all things equal, compared to a represented buyer, I have an advantage. Why? Because the seller unloads his house with less commission at closing, the listing agent walks with more than his seller commission and I win out over the other same price offer. I think thats something we can all cheer to!
 
Old 07-30-2012, 08:09 PM
 
397 posts, read 492,008 times
Reputation: 210
Quote:
Originally Posted by Silverfall View Post
The flip side...

A good agent discusses with their client a variety of commission issues that might come up and talks openly with their seller about these so the seller is aware of their business practices. The sellers love their agent as he/she has worked hard for them. A buyer sends an offer by email, along with an email they want forwarded to the seller because they want to make sure that the seller is aware they are unagented and doesn't trust the listing agent to convey that information. The sellers are miffed at the email and feel the buyer is unreasonable and a jerk. They decide not to negotiate and tell the buyer to go away.

The issue at play here really is, does the listing agent have enough good judgement to know if the communication they receive from the buyer directly is something that is appropriate for their seller and their transaction. Right? The OP wants to know if the LA has to legally present their email communication or not. The problem with walking in and immediately asking for a renegotiate on the contract is that the buyer has no idea if the clients love and value their agent or not. I'm just saying that walking in and asking for a cut in commission can be seen as an "in your face" move but some of the more sweet tempered people out there, where kindness and courtesy matter. I'm just saying that if buyers want to ask, go for it, but some sellers will get upset that the buyer asked.
Silverfall,

You raise some excellent points. I take my hat off to the RAs who sit down prior to signing the LA and openly discuss how commission will be handled if an unrepresented buyer closes on the property. This would diffuse any request from the seller down the line to reduce the BA commission. Unfortunately, I doubt that most RA have this conversation with their sellers (prior to signing).

There are certainly potentially downfalls for the unrepresented buyer. They can appear unconventional, disruptive and rub the sellers the wrong way. However, I think one of the most important roles of a LA is to fly above the fray and try to get their sellers to put their emotions aside. If the deal makes financial sense for the sellers, they should take an offer, no matter how "upset" they are with the buyer.
 
Old 07-30-2012, 08:10 PM
 
4,630 posts, read 7,216,053 times
Reputation: 4735
Quote:
Originally Posted by RE Skeptic View Post
The agent is the owner/broker (small independent). I know the BA commission is 3% b/c the agent told me, but it really doesnt matter what the commission is, as we talking more about the principles of the debate, not exact #s.

Not suggesting that the sellers can get out of contract nor do I think I will get all 3%. The contract can only be amended if both parties agree, I get that. If they agree, there is most likely something in it for both parties. I am not (as) abrasive when I negotiate. Fully aware the more I write, the worse I sound, thats why email was limited to 2 bullets points: 1) flexible closing; 2) unrepresented buyer. I did not suggest that the seller break his contract or renegotiate it, and in all likelyhood if the deal closes, I will never know.

All I know, is that all things equal, compared to a represented buyer, I have an advantage. Why? Because the seller unloads his house with less commission at closing, the listing agent walks with more than his seller commission and I win out over the other same price offer. I think thats something we can all cheer to!
Why would a seller's LA/Broker even discuss with you their commission rate????

Each state has VERY specific laws regarding "Dual agency" representation. Dual agency in your case meaning one agent representing both seller and buyer. Laws are very specific as to what this dual agent may and may not discuss with each of the two parties.
 
Old 07-30-2012, 08:31 PM
 
Location: Salem, OR
13,750 posts, read 31,601,217 times
Reputation: 12124
Quote:
Originally Posted by RE Skeptic View Post

All I know, is that all things equal, compared to a represented buyer, I have an advantage. Why? Because the seller unloads his house with less commission at closing, the listing agent walks with more than his seller commission and I win out over the other same price offer. I think thats something we can all cheer to!
Maybe, maybe not. I know our MLS has a rule about variable commissions. If you were in a multiple offer situation, our MLS rule is that commission differentials in the listing agreement have to be disclosed and when asked have to say what it is to other agents. That way agents will know if there is some competitive advantage happening. It is really common to have a lower commission rate for in-house transactions, or dropping it if you represent both sides. So in your case, I'd need to disclose that there was a commission differential of 3% if a competing offer asked. The competition would have a chance to adjust their offer knowing the differential.

You are also assuming that net is all that matters. I think we have all seen clients take lower offers to get better terms or a more solid buyer. Not everything is about price. A lot...but not everything.

How about the other agents? What are your MLS rules regarding variable commissions.
 
Old 07-30-2012, 09:09 PM
 
397 posts, read 492,008 times
Reputation: 210
Quote:
Originally Posted by hindukid View Post
The other thing I would do is find a realtor and pay them by the hour and have them rebate you the rest. If the buyer's agent gets a 24K commission, you might be able to find someone to work 10 hours for $2000 and rebate the rest back to you.
I think agent rebates back to the seller or buyer need to go on the HUD which can cause problems. That being said we did a 1.5 point rebate with a BA (bought the 1st house she showed us). Went OK at closing, but also keep in mind this rebate is income and is subject to income tax. If possible, it is better if the buyer agent reduces their commission to buyer (assuming the LA adjusts commission as well). This avoids the potential for the rebate to be denied at closing and taxes.
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