Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Your seller would know that a buyer is "unrepresented" by virtue of a blank BA contact section in the "Arizona contract" which is presumably created and sanctioned by the AAR and it's attorneys. Thus if a buyer conveys his unrepresented status via the AAR contract it is legal. However, if he sends the seller an email clarifying his unrepresented status this is illegal?
I didn't say anything about the legality of a buyer conveying his unrepresented status. I said that the contract has a section for the buyers agent to fill out providing his/her name and company name and that s/he is representing the buyer. Obviously the listing agent knows the buyer is unrepresented and s/he will inform the seller of this fact, as well as the seller seeing a buyer agent missing from the contract.
I did not say it is illegal for an unrepresented buyer to notify a seller via an email that s/he is unrepresented. I said it is illegal to interfere with a third party contract.
I said that it appears you probably knew it was illegal and instead of putting it in the contract or an addendum you tried to skirt the legality and send an email to the seller through the listing agent. The listing agent only has to submit the offer. He does not have to submit a buyers email.
And as I stated, if I got an email cover letter that was attempting to get the seller to renegotiate my commission I would probably consult with my attorney on how to proceed, and would advise my seller to consult with an attorney also.
Quote:
=RE Skeptic:.....
Agree with you in theory. However, I have a problem with the fine print of most LA and circumstances under which this contract is signed.
Assume your Arizona (AAR) contract commits your seller to pay you:
1) Full commission if you (or someone else including the seller) delivers a "ready, willing and able purchaser", irregardless of whether the home actually sells.
2) Half of EM if the buyer defaults.
3) Full commission if a buyer without an agent purchases the property.
Of course you do not know, and cannot know, the circumstances under which most listing contracts are signed. You can only assume.
1. In our contract if a seller is brought a full price offer with all terms the seller has asked for, the sellers agent is due a commission if the seller backs out and just decides no not sell. The Exclusive Right Listing Contract states that the listing agent will be paid, even if the seller brings a buyer. An Exclusive Agency agreement allows the agent to get no commission if the seller brings a buyer. That contract exists, but why would an agent spend any time marketing that home if s/he may not be paid???
2. The seller gets the EM if buyer defaults. The seller and listing would have to negotiate it if the listing agent wanted half the EM. I would not want that. It is the seller who has lost out if the buyer defaults.
3. Our contract states that the seller is paying the agent x% commission. It also provides a space where they agree on how much commission the listing agent will pay a licensed broker if they bring a buyer.
If an unrepresented buyer comes along, the listing agent receives the full commission. S/he is going to have to work harder working with that unrepresented buyer because 99% of the time the buyer will want to lean on the agent for assistance. There is a huge risk in providing that assistance because any innocent but wrong statement could create an accidental "agency" between the agent and the unrepresented buyer, and the agent could later be sued.
There is a lot about real estate, and the risks that agents are subjected to, that you do not understand. You obviously don't want to understand because you think agents are making too much money and you want to get in their pocketbook. The experienced agents know better and will not let you get away with what you're attempting to do.
Quote:
Do you review these "gems" with all your sellers prior to having them sign the LA? Or do you relegate these clauses to your subconscious like a previous posting agent (Post #105, Mike from NC)?
I go over the complete listing agreement with them. I tell them the risks of asking me to do dual agency, and the fact that in dual agency I become neutral and cannot advocate for them, and that is why the variable rate commission. If they want me to be dual agent in a transaction, then the commission is reduced.
I let them know that I do not like working with unrepresented buyers because of the legal risks for seller and listing agent, and that there is no commission reduction if one submits a contract.
Quote:
=RE Skeptic:...
The RAs out there can try to skirt this issue by arguing that contracts vary by state, but I think most state LA's include these provisions. So...do RA's out there feel obligated to discuss these details (#1-3 above) with their sellers prior to signing or do you think it is up to your seller to glean these details from the contract on their own?
Actually no one is skirting the issue. It seems to be you that is skirting the issue that it is illegal for one to attempt to interfere with and renegotiate a third party contract within a purchase contract.
It's already been suggested that you determine the amount you want to pay, bottom line, for the home and make that offer. Or offer something lower. But stay out of the listing agents pocket. It is not your money.
So...do RA's out there feel obligated to discuss these details (#1-3 above) with their sellers prior to signing or do you think it is up to your seller to glean these details from the contract on their own?[/b]
They are addressed in my listing agreement. They don't have to glean anything.
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.
I want to make sure I'm responding to your original posted question so we don't continue getting off topic because it seems as if you have used the opportunity to expand your discussion to criticize agents and their contracts and the way they interact with their clients in their listing presentation and contract signing. That is not what your question is about.
The email is a cover letter to the agent, and is not a part of the contract. As it has been stated many times, the agent has no obligation whatsoever to forward your cover letter.
However, by you talking to the seller through an email, (if the agent forwards it) it is an attempt, by your own admission, to get him to renegotiate the listing contract. The email could be considered a verbal negotiation, and since interfering with a third party contract is illegal, both the agent and the seller may have a cause of action against you.
That's why I would contact my own attorney; and I would advise my client to get legal advice so he doesn't get sued by me for attempting to use the purchase contract to renegotiate our listing contract.
If you were successful in having the seller attempt to renegotiate my commission then you would get a letter from my attorney with a cease and desist order; and my seller would also get one, if he elected to play your game.
Quote:
Originally Posted by RE Skeptic
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?
Only the offer must be presented to the seller. Not the cover letter.
The listing agent does not have to defend his commission. The commission was negotiated at the time of taking the listing.
He has a contract that you are attempting to illegally interfere with. Perhaps you should contact a real estate attorney because if you pursue this matter, and the listing agent has knowledge and intestinal fortitude, you may need one.
When I take a listing, I tell my seller that if I get an offer for $1.00, I must present it - It is NOT my property that's for sale.
If a seller objects to that, I explain their options including giving me WRITTEN instructions that can include limitations on the types of offers to be presented - only written offer, offers not below XYZ dollars and so on.
If an offer comes in that are not included in these instructions - I explain the limitations etc.
Works out well.
If I got a ridiculously low verbal offer I would tell the person I will present it if they find another agent willing to write it. And good luck with that. We are not required to present verbal offers that are ridiculous or write them. I don't want to represent someone that wants to write such a dumb offer and why would any seller appreciate such a waste of their time? Why do so many of you want to argue about this? It's just dumb.
I did not say it is illegal for an unrepresented buyer to notify a seller via an email that s/he is unrepresented. I said it is illegal to interfere with a third party contract.
My email simply stated my unrepresented status, nothing more or less. In one of your posts you stated that my email was illegal. Thats what I was referring to.
Quote:
2. The seller gets the EM if buyer defaults. The seller and listing would have to negotiate it if the listing agent wanted half the EM. I would not want that. It is the seller who has lost out if the buyer defaults.
You may not want the EM, but your Agency, with whom the seller has the contract with, may have an alternate view. If not, why dont you just delete it from your Agency listing agreement. I am sure your seller wouldn't object.
Quote:
1. In our contract if a seller is brought a full price offer with all terms the seller has asked for, the sellers agent is due a commission if the seller backs out and just decides no not sell. The Exclusive Right Listing Contract states that the listing agent will be paid, even if the seller brings a buyer. An Exclusive Agency agreement allows the agent to get no commission if the seller brings a buyer. That contract exists, but why would an agent spend any time marketing that home if s/he may not be paid???
2. The seller gets the EM if buyer defaults. The seller and listing would have to negotiate it if the listing agent wanted half the EM. I would not want that. It is the seller who has lost out if the buyer defaults.
3. Our contract states that the seller is paying the agent x% commission. It also provides a space where they agree on how much commission the listing agent will pay a licensed broker if they bring a buyer.
If an unrepresented buyer comes along, the listing agent receives the full commission. S/he is going to have to work harder working with that unrepresented buyer because 99% of the time the buyer will want to lean on the agent for assistance. There is a huge risk in providing that assistance because any innocent but wrong statement could create an accidental "agency" between the agent and the unrepresented buyer, and the agent could later be sued.
This is a nice summary of the listing agreement. I would suggest that you RAs print this and give it to your prospective sellers (before they sign the listing agreement).
Quote:
It's already been suggested that you determine the amount you want to pay, bottom line, for the home and make that offer. Or offer something lower. But stay out of the listing agents pocket. It is not your money.
Never said or implied that. I actually think that the "average" RA's yearly income is relatively low. Furthermore, I think many RAs work very hard.
Can only comment on my specific situation. When an unrepresented buyer yields an SA an extra 24k (assuming typical 3% BA commission on 800k sale), IMO this is excessive (regardless of how little or much you make). Particularly since the SA who is collecting this commission is not even representing me. I think most buyers and sellers would agree with this. If you think otherwise, why don't you poll your clients?
My email simply stated my unrepresented status, nothing more or less. In one of your posts you stated that my email was illegal. Thats what I was referring to.
Quote:
Originally Posted by RE Skeptic
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?
Quote:
Originally Posted by RE Skeptic
"
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?
Quote:
Originally Posted by RE Skeptic
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?
Your first few posts and ones closely following it do not seem to support the claim that your email simply states your unrepresented status. I'm pretty sure most everyone that read it took it to mean exactly what you said, as supported by your later posts, which is that you were encouraging the seller to renegotiate their commission agreement with the listing agent. That is supported by your first and immediately following emails. (I only went through the first couple of pages of the thread.)
If I got a ridiculously low verbal offer I would tell the person I will present it if they find another agent willing to write it. And good luck with that. We are not required to present verbal offers that are ridiculous or write them. I don't want to represent someone that wants to write such a dumb offer and why would any seller appreciiate such a waste of their time? Why do so many of you want to argue about this? It's just dumb.
While I'd agree that the $1.00 offer is ridiculous, a $90,000 offer on a $125,000 list price might not be. I can say with assurance that our Dept of RE would say that it would have to be presented unless we have, in writing, restrictions to the contrary.
While I'd agree that the $1.00 offer is ridiculous, a $90,000 offer on a $125,000 list price might not be. I can say with assurance that our Dept of RE would say that it would have to be presented unless we have, in writing, restrictions to the contrary.
...You may not want the EM, but your Agency, with whom the seller has the contract with, may have an alternate view. If not, why dont you just delete it from your Agency listing agreement. I am sure your seller wouldn't object....
Captain Bill and I are in the same MLS (different agencies). Our listing agreement does not give half the EM to the agent, and in fact, it does not address EM at all. EM is covered in the purchase contract, and also does not give any portion to the agent. Bill's point was that if an agent should want half, the agent would have to negotiate it with the seller and add it to the agreement as an additional condition. By the way, Bill is the broker/owner of his agency.
Can only comment on my specific situation. When an unrepresented buyer yields an SA an extra 24k (assuming typical 3% BA commission on 800k sale), IMO this is excessive (regardless of how little or much you make). Particularly since the SA who is collecting this commission is not even representing me. I think most buyers and sellers would agree with this. If you think otherwise, why don't you poll your clients?
The bottom line is that your opinion about this is completely irrelevent in this case. The seller has seen the listing contract, they understand it, and they have agreed to it. When you are a seller please feel free to negotiate whatever contract makes you happy. The contract is between the seller and the agent. You are an irrelevent third party when it comes to the listing contract. Plus, as others have already pointed out, you have no idea what the contract says. Unless you have MLS access you also have no idea what the co-broke fee offered is either. How do you know it's not being listed for 1% with a co-broke of 1%? The commission is fully negotiable after all and there is no set rate. The fact that you think it's 6% is irrelevent because it's just a guess.
Also, I don't have to poll anyone about this at all. The fact that so many people agree to it (whether they love it or not) tells me they are at the very least OK with it. Of course no one is going to love it, no one loves paying for anything. When you go to have your car repaired is your favorite part when they hand you the bill? I would doubt it.
I would like to know what the OP's line of employment is and where they work so that I can go in and tell them in my opinion what they charge is not worth it. I think my dentist charges outrageous amounts but I'm not going in there and demanding a lower price.
The bottom line: if you don't want the listing agent taking all the commission home with them then bring your own agent. Find a good one and I'll bet in the end you'll be glad you had them. The fact that you've gone about this entirely the wrong way tells me you could probably use the help.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
