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.
I think I stated this about a week ago and we have been discussing it since then, but thanks for re-addressing this. Perhaps you could emphasize this to your next potential seller before they sign.
Why? You can "re-negotiate" a contract at any time, right?
Why? You can "re-negotiate" a contract at any time, right?
Correct, theoretically either party can attempt to re-negotiate a contract at any time. Are you proposing that the the option to renegotiate a contract gives the listing agent the right to pull the wool over a sellers eyes at the time they sign the LA?
My point was that if an agent feels that they can defend (to their seller) keeping 1/2 the EM or commission (whatever is less) than they should have no problem "making this clear" to their client (seller) at the time the LA is signed. And when I say "making this clear" I am referring to specifically discussing this with the potential seller, not just assuming that they see it in the contract. Alternatively, the agent could require the seller to have the contract reviewed by a lawyer.
The ability to re-negotiate a contract is based on leverage. If a buyer defaults and EM is payed to the seller, the seller is obligated to pay the LA. At this point the seller has lost all leverage. The agent may relieve the seller of this obligation, but as the Captain suggested the agent may use their leverage to extend the listing agreement in concession for this.
In the case of commission, if an unrepresented buyer enters the picture, the seller still has some leverage to re-negoatiate the LA commission with the agent.
My whole point throughout this thread has been to advocate full transparency and disclosure prior to signing the LA. If this is done, the issue of re-negotiating a contract would be less of an issue.
Probably considered off topic at this point but I'd be interested to know if the seller 42 pages ago accepted or countered the original offer and whether or not the listing agent reduced his commission. Skeptic?
Apparently you "are not understanding the argument correctly". Not sure what agents you are referring to when you say "all the agents in this thread..." but we have clearly been talking about the LA not the purchase contract.
I will refer you to my post #373 where I once again raised the issue of the LA giving the Broker 1/2 the EM if the buyer defaults. We have been going back and forth (with a side bar on legal advice from the Captain) since that point. Like you, Silverfall also thought I was referring to the purchase contract. After this was clarified by both myself and the Captain, SF acknowledged the oversight.
I know you're talking about the listing agreement. However, the section of the LA we're discussing deals with what happens when there is a breach of contract with the purchase agreement. Therefore, we're talking about both contracts. The actual breach of contract is not with the LA.
I also noticed that there seems to be two discussions going on here. One just involves Bill and Mark.
Quote:
Originally Posted by RE Skeptic
I think I stated this about a week ago and we have been discussing it since then, but thanks for re-addressing this. Perhaps you could emphasize this to your next potential seller before they sign.
Sarcasm is the last refuge of those with no real argument. My clients all fully understand every single piece of paper I put in front of them before I ever hand them a pen. This has been expressed ad nauseum to this point but I'll repeat it once more . . . the listing agreement is a negotiated contract. If you don't like part of it then negotiate it out. I've struck out this part of the contract on several occassions at the request of my client. Many other people, however, agree that it's fair for me to get paid when I do my job successfully so that part of the contract remains for those people. The fact that the debate about this continues is ridiculous as this statement really says it all.
Quote:
Originally Posted by 1insider
Probably considered off topic at this point but I'd be interested to know if the seller 42 pages ago accepted or countered the original offer and whether or not the listing agent reduced his commission. Skeptic?
While I haven't read every single post in this thread, I do know this was asked of him a couple of times and he refused to make any update.
This makes the thread with Martha Anne look like child's play. Guys and gals, you can hang it up. It's2 certain posters here don't understand real estate contracts or business ownership. In fact, I think they may be the same person.
This makes the thread with Martha Anne look like child's play. Guys and gals, you can hang it up. It's2 certain posters here don't understand real estate contracts or business ownership. In fact, I think they may be the same person.
I assume you believe I am one who does not understand. You are incorrect I understand it 100%. Just b/c I do not agree with it does not mean I do not understand it. Its the other poster who does not seem to grasp the legal reality of what he posts.
I get it. The Listing agreement is set in stone before the buyer comes along...Realtors claim asking the listing agent to negotiate the buyer agent portion of the agreement down so that he pays less is interference with a contract, duress, and undue influence. That is the jest of the entire argument.
I disagree. There is no logical reason that a listing agent should outright refuse to negotiate down their commission when a buyer comes without representation....I believe it should just be another tool in his warchest of tools to close the deal. The listing agent never expected the full 6% so I do not understand the outright hate that comes from asking for that agent to share the other 3.
The best points made on this topic that I recognize as valid are:
1) The buyer is an idiot and his contract will be all wrong so there is additional work (though it is negligible)
2) The agent must show the property to the buyer, and he may not actually be serious (this is the largest single problem)
3) High risk = high reward. The free market.
4) Some states dont allow it - strongest argument made.
The points I outright reject are:
1) liability for dual agency. This is absurd and can be easily dealt with
2) Tortious interference with contract.
3) It is the work of 2 Agents.
The bottom line is clear. A listing agent does not have to negotiate his commission at all....ever. Its spelled out in every state. I have merely stated repeatedly that the reasons for refusing to do so are usually VERY overstated (liability, agency, work of 2 agents, etc) and that the real reason they refuse to do so is they want the extra money.
The best points made on this topic that I recognize as valid are:
1) The buyer is an idiot and his contract will be all wrong so there is additional work (though it is negligible) Agreed
2) The agent must show the property to the buyer, and he may not actually be serious (this is the largest single problem) Wrong-the is not required to show the property.
3) High risk = high reward. The free market. Correct
4) Some states dont allow it - strongest argument made. I think that's correct, mine does so I'm most familiar with it.
The points I outright reject are:
1) liability for dual agency. This is absurd and can be easily dealt with I believe there is added liability.
2) Tortious interference with contract. I'd leave it up to the courts, but I think the buyer should just make the offer and let the agent/seller work it out without making demands.
3) It is the work of 2 Agents. Generally
I generally agree with your summary, just a few points we'll have to agree to disagree that are our opinions. Factually, the only thing I can say definitively is that the agent is never required to show a house. Some agents in fact are only listing agents and won't even show their listings to unrepresented buyers.
I get it. The Listing agreement is set in stone before the buyer comes along...Realtors claim asking the listing agent to negotiate the buyer agent portion of the agreement down so that he pays less is interference with a contract, duress, and undue influence. That is the jest of the entire argument.
I disagree. There is no logical reason that a listing agent should outright refuse to negotiate down their commission when a buyer comes without representation....I believe it should just be another tool in his warchest of tools to close the deal. The listing agent never expected the full 6% so I do not understand the outright hate that comes from asking for that agent to share the other 3.
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.
Probably considered off topic at this point but I'd be interested to know if the seller 42 pages ago accepted or countered the original offer and whether or not the listing agent reduced his commission. Skeptic?
This is an active and private issue and I will not comment on it.
If I was making this up, as some have suggested, I would have responded with a scenario of resounding success.
"Success" or "failure" in my situation is anecdotal and irrelevant. I doubt it would change the opinions or practices of the agents on this thread, nor would it settle any of the debates.
I will say, in the past, my unrepresented status has helped to bridge gaps in negotiations. 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 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.
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?
Quote:
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.
As I explained in a previous post, I know b/c the LA told me.
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.
