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Say some buyers approach you and ask to see the property. They come and take a look, and then come back twice again with their contractor, mom and dad, etc. They send a letter saying the property is perfect for them and they really want it. There is no mention of an agent. After this and several back and forth discussions on pricing, they say they have an agent. The agent then enters the scene and says her commission (3%) will have to be paid by the seller. She does have a contract with the buyers.
Should you lop off another 3% or is it reasonable to restart the negotiations? And if you do, where do you begin?
As you describe it, negotiation hasn't even begun because there has been no offer. Talk is just talk.
The buyers could write into the offer that you (the seller) must pay a commission. You can strike that provision. Until you both agree on both price and conditions there is no deal.
First, when you say buyer approached you...you didn't specifically say you had your house listed for sale. Do you?
If so...seems like you don't have an agent yourself and you were planning on a buy owner transaction?
So...Thebuyers find the house somehow...perhaps your ad in the paper, perhaps only from your sign. The buyers initiate contact with you. The buyers see the house...3 times. I guess you are meeting them every time after some back and forth in scheduling and time taken to be there?
They even bring their relatives.
The buyers then begin correspondence with you, stating the home is "perfect for them" and they "really want it". Some would say the beginnings of a verbal contract.
Then there is lots of back and forth on pricing. A difficult time.
Suddenly the buyers say they have an agent and the agent says you have to pay her 3%.
For WHAT?
You even say her contract is with the buyers. They can work out their contract. Since the buyers did not connect with the agent and the agent did not keep track of the buyers she had a contract with...hey, not your problem.
Question. What is the date of this contract? Or maybe the date was earlier and the agreement between buyers and good friend or relative agent was "you buyers go ahead and find your house and let Aunt Susie in on it when you got something going".
I know tons of top notch agents and realtors and really find the shady ones bad news.
Say some buyers approach you and ask to see the property. They come and take a look, and then come back twice again with their contractor, mom and dad, etc. They send a letter saying the property is perfect for them and they really want it. There is no mention of an agent. After this and several back and forth discussions on pricing, they say they have an agent. The agent then enters the scene and says her commission (3%) will have to be paid by the seller. She does have a contract with the buyers.
Should you lop off another 3% or is it reasonable to restart the negotiations? And if you do, where do you begin?
you tell them to feel free to add their agent's compensation to the price, and if you feel like you should now have an agent, you might very well add that too (even though you'll theoretically benefit from your agent representing you).
Unless you signed some sort of contract you aren't going to be forced to proceed. Obviously you had some good will discussions with the seller and you can simply tell them that when they approached you they didn't tell you about a realtor. Simple as that.
Where do you go? Add 3%, split the difference, tell them to go pound tar etc. Whatever you want. You have control of the transaction up to the point of signing the paperwork. Once that happens power transfers to the buyer and their ability to exit the transaction.
So you can either pay the commission, start negotiating again or tell them to walk.
Entering pricing discussions like that it is very important to be clear with buyers you're pricing is reflecting a discount because they don't have a realtor. If they show up with one, all bets are off. They could also be playing you a bit. Broker friend can get them some extra money back by rebating some of that money.
Up to you how to proceed. You're under no obligation to do anything based on what you've shared. If you aren't desperate to sell I'd just sit on it and raise the price 3% explaining my thoughts and the next person that negotiates loses. If the house is in good shape and they've put that much time into it they'll be invested to come back to the table with more cash. If not, plenty of other buyers in many areas.
The buyers then begin correspondence with you, stating the home is "perfect for them" and they "really want it". Some would say the beginnings of a verbal contract.
Some might say that, but those people would not be very knowledgeable about real estate because there is no such thing as a verbal contract in the real estate world.
Quote:
Originally Posted by cully
Suddenly the buyers say they have an agent and the agent says you have to pay her 3%.
For WHAT?
For representing them as their agent. Granted, it sounds like this agent is doing a less than stellar job but that's the fee this agent charges.
This agent obviously has a contract though with the buyer and not with the OP. So, I would say either negotiate the fee lower or tell the buyer that they can add the agent's fee on top of whatever price they negotiate. OP, keep your eyes on the prize and that's your net proceeds from the sale. Where ever any other money in the transaction goes is not relevant to you and just distracts you from your goal of attaining the highest net proceeds possible from the sale.
Quote:
Originally Posted by cully
Since the buyers did not connect with the agent and the agent did not keep track of the buyers she had a contract with...hey, not your problem.
Are you suggesting that agents put some sort of tracking bracelet on their clients? Seriously though, as agents there is only so much control we have over our clients. They're not going to call us every morning to tell us what they had for breakfast.
Also, it is the OP's problem. If these people are going to buy the OP's house then everyone needs to figure out how the buyer's agent will get paid. That's not to say that the OP has to pay the fee out of their proceeds but they do need to agree to how the agent will be paid. Just add it on top of whatever the buyers agree to pay for the house. Everyone gets their money, the house gets sold, and everyone is happy.
Quote:
Originally Posted by BoBromhal
you tell them to feel free to add their agent's compensation to the price, and if you feel like you should now have an agent, you might very well add that too (even though you'll theoretically benefit from your agent representing you).
Say some buyers approach you and ask to see the property. They come and take a look, and then come back twice again with their contractor, mom and dad, etc. They send a letter saying the property is perfect for them and they really want it. There is no mention of an agent. After this and several back and forth discussions on pricing, they say they have an agent. The agent then enters the scene and says her commission (3%) will have to be paid by the seller. She does have a contract with the buyers.
Should you lop off another 3% or is it reasonable to restart the negotiations? And if you do, where do you begin?
I would simply come back with
If the buyer has agent representation they must pay their agents commission out of pocket. Seller will not pay any commission to any agent or broker. You are in no way required to use a agent.
Hell all you need to find and hire a lawyer to do the paperwork. Tell the buyer to get their own lawyer or pay their agent.
Cully: buyers stating the home is perfect for them...Some would say the beginning of a verbal contract
Quote:
Originally Posted by MikePRU
Some might say that, but those people would not be very knowledgeable about real estate because there is no such thing as a verbal contract in the real estate world.
Actually I said "beginning of a contract" and, actually, there are areas where a verbal contract is valid and lawfully binding. (although, yeah, that would take a certain amount of honor regarding proof). And there are also areas where realtors are bound to present all offers, which includes verbal.
For representing them as their agent. Granted, it sounds like this agent is doing a less than stellar job but that's the fee this agent charges.
"Less than stellar" is an understatement.
This agent obviously has a contract though with the buyer and not with the OP. So, I would say either negotiate the fee lower or tell the buyer that they can add the agent's fee on top of whatever price they negotiate.
I said not to pay.
OP, keep your eyes on the prize and that's your net proceeds from the sale. Where ever any other money in the transaction goes is not relevant to you and just distracts you from your goal of attaining the highest net proceeds possible from the sale.
Are you suggesting that agents put some sort of tracking bracelet on their clients? Seriously though, as agents there is only so much control we have over our clients.
I have had decades of experience with all the sides, realtor/agent, buyer, seller.
They're not going to call us every morning to tell us what they had for breakfast.
Breakfast is a silly comparison to a contract. How about they make contact when they find out about the house for sale? No contact with their agent. How about when they want a first showing? No contact. How about when they want to go to the house for the inspection? No contact. How about when they go back with mom and dad? No contact. How about before they write that letter to the seller? No contact. How about when they talk about pricing etc? No contact. That's a lot of mornings that pass while they worked on getting that house. Or how about if the agent called them a couple of times after the contract with the buyers to see what happened, why they even bothered to make a contract with an agent.
Also, it is the OP's problem. If these people are going to buy the OP's house then everyone needs to figure out how the buyer's agent will get paid. That's not to say that the OP has to pay the fee out of their proceeds but they do need to agree to how the agent will be paid.
Totally feel OP should have the buyers pay their sudden realtor's fee (personally I'm going for it's Aunt Nancy who has a license let's get her some money now that the deal is made).
Just add it on top of whatever the buyers agree to pay for the house. Everyone gets their money, the house gets sold, and everyone is happy.
Here's another thought. If the buyers are so unreliable, flippant, disrespectful, airheaded, whatever, with their contract with their agent...what does that say about how they will treat the contract with the seller?
Say some buyers approach you and ask to see the property. They come and take a look, and then come back twice again with their contractor, mom and dad, etc. They send a letter saying the property is perfect for them and they really want it. There is no mention of an agent. After this and several back and forth discussions on pricing, they say they have an agent. The agent then enters the scene and says her commission (3%) will have to be paid by the seller. She does have a contract with the buyers.
Should you lop off another 3% or is it reasonable to restart the negotiations? And if you do, where do you begin?
Anyone who wants agent representation should be allowed to have it.
And, yes, a new "discussion on pricing" is certainly reasonable.
Keep your eye on your net proceeds from sale, and don't worry about a lot of other stuff.
"Sure, I will pay you. We talked about a price that gives me net proceeds of $xyz,123.
As long as I net $xyz,123, you can have whatever fee you want.
I look forward to reviewing your written offer."
Cully: buyers stating the home is perfect for them...Some would say the beginning of a verbal contract
I doubt that's the beginning of a verbal contract. If you walk up to a car on a dealer lot and say this would be perfect does that mean I agreed to buy it ? I don't think so.
If I did a FSBO and the buyer wanted to bring in a agent after the deal was made I would tell them they have a few choices
1. They can pay for their representation out of pocket
2. They can resubmit the offer at a additional cost to them to cover the commission if they can't afford it
3. They can cancel the contract as the contact did not have ANY provision for bringing in representation.
The reason I'm selling FSBO is to keep money in my pocket and not have to pay commissions.
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