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Old 05-05-2018, 02:54 PM
 
Location: Sarasota/ Bradenton - University Pkwy area
3,170 posts, read 4,497,003 times
Reputation: 2708

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The buyer's agent, if asking for a higher commission than what is being offered through the listing agent in the MLS, is in violation of the NAR Code of Ethics:

Standard of Practice 16-16
REALTORS®, acting as subagents or buyer/tenant representatives or brokers, shall not use the terms of an offer to purchase/lease to attempt to modify the listing broker’s offer of compensation to subagents or buyer/tenant representatives or brokers nor make the submission of an executed offer to purchase/lease contingent on the listing broker’s agreement to modify the offer of compensation.


The listing agent needs to remind the buyer's agent and the agent's broker of this. If the buyer's agent wants more compensation, that should be worked out between the buyer and the buyer's agent.
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Old 05-05-2018, 03:30 PM
 
Location: Salem, OR
13,900 posts, read 32,403,758 times
Reputation: 12551
Quote:
Originally Posted by MikeJaquish View Post
It's easy to criticize the Unknown Agent for being clumsy and coarse.
Sure.

It's just about impossible to assess the ethical or legal situation without specific knowledge of the parameters of the agent/buyer relationship and buyer's instructions to the agent.

So many criticisms and judgments in this thread have no factual support, it's amazing.
It isn't ethical. It is appropriate for a buyer agent that has a buyer agency agreement to make up any differentials to try and renegotiate their commission with the listing agent as they have a fiduciary duty to their buyer to try and not have them pay that shortfall. BUT agents need to do it before they write the offer for your buyer, or you accept the commission as-is. It isn't ethical to have commission negotiations at the same time you are submitting an offer regardless of buyer instructions.

If the listing agent won't increase the commission, then the buyer agent asks for additional closing costs for their buyer to cover their 1% differential. That would be in keeping with their fiduciary duty to the buyer.

I'm not with you on this one.
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Old 05-05-2018, 08:25 PM
 
Location: Raleigh NC
8,690 posts, read 6,792,115 times
Reputation: 7749
I think the point is that the OP, nor many of the pound sanders and others, have any idea what the agreement and interactions/discussion between Buyer and their Agent are.

It's entirely possible the Buyer signed a 3% compensation agreement, their agent has explained this particular property is only offering 2%, have discussed the difference, and the Buyer has told the agent to try and get the Seller's side to come to 3%.
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Old 05-05-2018, 09:34 PM
 
8,868 posts, read 7,864,595 times
Reputation: 19243
1: The owners have a less than popular property to sell. It has been for sale for months, and still on the market.

2: The owners have gotten some agent, to list it at a low commission.

3: The experienced agents that understand that type of property, never show low ball commission property.

4: A qualified agent has sent word if the Seller will pay a normal 3% percent commission, she will show the property and deliver a contract to sell it. If not she will simply sell them another property.

There are two reasons property like this does not sell.

1: The property is considerably overpriced.

2: A cheap skate seller, will not pay enough commission to attract the agents that can sell that particular property.

Facts:

1: The typical salesperson is only trained and qualified to sell single family homes on in town lots. They have not been trained to sell country property such as the OP owns. It takes a knowledge of the ins and outs of country property and the differences you are selling, to get the job done.

2: The people that sell county property, have additional knowledge and experience. They know about septic systems, wells, and the other differences between in town, and out of town properties, and know how to sell the properties.

3: There are more than one property in the country that the salesperson can show and sell to their clients. With the additional experience needed to sell that type of property, they are not going to show or sell property like this with a cut rate commission. They will make a sale, and have a very happy buyer. They are going to get a regular commission (pay day) or they will just sell a different property.

Don't believe me, then answer one question. Why after many months on the market, is the property still for sale?

The answer to this question, is one of the above two reasons the property has not sold. A seller can decide they will not pay a normal commission for the area, and will do something they do not realize. They make their property nearly impossible to sell. Agents work to sell the property that will give them a normal payday. A more difficult to sell property such as owned by the OP, will not be shown by agents that are experienced and qualified to sell such property. A real hard to sell property, usually pays as high as a 10% commission, as it takes one of the very few qualified agents in an area to sell it requiring a lot more work on their part to sell it, and takes a lot of their time to get the job done. They have the choice of selling maybe two properties that are easy to sell, or spending the same amount of their time to sell the hard to sell property. To get them to spend the time and effort to sell such properties, you have to make it worth their while to get the job done.
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Old 05-06-2018, 05:13 AM
 
5,757 posts, read 7,564,810 times
Reputation: 3278
Quote:
Originally Posted by MikeJaquish View Post
It's easy to criticize the Unknown Agent for being clumsy and coarse.
Sure.

It's just about impossible to assess the ethical or legal situation without specific knowledge of the parameters of the agent/buyer relationship and buyer's instructions to the agent.

So many criticisms and judgments in this thread have no factual support, it's amazing.
Well this is City-Data after all. The “facts” are assuming that OP is actually telling the truth. If I’m reading correctly (and maybe I’m not), it certainly sounds like OP is saying this is being done without the buyer’s knowledge.
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Old 05-06-2018, 05:37 AM
 
697 posts, read 423,561 times
Reputation: 1092
Quote:
Originally Posted by BoBromhal View Post
I think the point is that the OP, nor many of the pound sanders and others, have any idea what the agreement and interactions/discussion between Buyer and their Agent are.

It's entirely possible the Buyer signed a 3% compensation agreement, their agent has explained this particular property is only offering 2%, have discussed the difference, and the Buyer has told the agent to try and get the Seller's side to come to 3%.
Does California require a buyer to sign an exclusive buyer's agreement? The OP stated previously that these buyer's are also needing to sell their current home. In that scenario, is it more likely they would have?

If an agent has commission to be earned on a sale and purchase, IMO, they should not try to barter commission %'s as they may stand to lose both due to less than ethical tactics and greed.
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Old 05-06-2018, 06:18 AM
 
2,803 posts, read 3,285,198 times
Reputation: 3011
Quote:
Originally Posted by Brandon Hoffman View Post
It is of course possible that you're correct, but any guess on our part would be merely speculation. Only the agent and the agents buyer know what's happening on their side of the table right now. At any rate, the agent couldn't have put it in the contract without the buyers blessing so the principal of the matter as well as emotion should be put aside in order to get the home sold.

To Mike's point, let the buyer worry about the buyers money and the seller worry about the sellers money. If the buyer is willing to write in their agent gets an extra 1% then the seller can just counter with an extra 1% price increase from what they would have otherwise countered with. Keep the goal in sight...don't lose track of the forest because you're trying to count the trees.
It's not just a 1% increase.
It's at a minimum a 1/.99 = 1.01% increase.
Moreover to preserve the same net the sellers have to take into account the additional money that would go to their own agent. Without considering other closing costs, to net A from a sales price of B you don't determine B by "adding 5% (of A to A)". You determine B as 1/.95*A = 1.053*A. That additional % sought by the self-proclaimed "higher-end" agent is costing at least 1.3% more NOT just 1% of the previous A to get to the same net. On a $700,000 home the difference is $9,100 not $7,000.
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Old 05-06-2018, 06:29 AM
 
Location: Cary, NC
32,851 posts, read 57,228,575 times
Reputation: 31645
Quote:
Originally Posted by amy_lou View Post
We have a house +acreage and when we chose our realtor, we all agreed that the commission would be 4%. We have a potential buyer, and their agent is stating that she is a "higher end" agent and accepts no less than 3%. I feel like if you're showing our property to your buyers and the notes states 2%/2%, that is what you are going into it knowing. If she's wanting more commission, than should we include that 1% in our counter? I feel like if the buyers want her as an agent, then they need to pay her extra 1% in the sale of the house/property.

Thoughts?
Quote:
Originally Posted by amy_lou View Post
Thank you all! Right now, this is all verbal and we are waiting for the written offer, so we'll see if there's anything documented about her 3%. We know what we will want to counter with...so if there's anything about a 3% I'd love to comeback with a "we will counter at X amount, 4% commission" or "X++ amount, 5% commission". I wonder if the potential buyers are even aware of what their agent is requesting. If I were them and were asked to pay X++ because she wants more I'd be PO'd.

I don't know much about agent negotiations...but this whole thing just seems off. Like I said before, if you are showing a client a potential buy, you already go into it knowing what your commission % will be, and your priority is making the sale work for your client.
Quote:
Originally Posted by amy_lou View Post
Yep...we're talking $700k + ... so that 1% is not chump change.
Quote:
Originally Posted by amy_lou View Post
Our original agent listed the commission as 3% if no buyer's agent; 4% with a buyer's agent. Other realtors that we interviewed for the listing were quoting us 4%.
Quote:
Originally Posted by amy_lou View Post
Wow! Here I was thinking my question would get a few responses and be done! I don't know if I have learned more than I wanted to know or am just more confused

Yes we have been on the market since last summer; we are a unique property that we knew was going to take a specific buyer. This current buyer has actual been the most serious and given us an offer to consider. All others have been more along the lines of "let's see how desperate they are to sell" offers.

I still don't have the written offer...supposed to get it by Thursday; have learned that they have a house in a local town that they are putting on the market. (Hope it's enough "high end" for their agent!!). The fact that she'll also be earning the commission on the sale of their house makes my feathers ruffle all that more for asking another 1%.

But, frankly, there will be no pounding sand
Quote:
Originally Posted by amy_lou View Post
Glad you've enjoyed it! I wanted to walk away knowing that my thoughts weren't all that off in the situation; and that her request was not in the norm
Quote:
Originally Posted by amy_lou View Post
Ok, sorry to keep the suspense on the written offer....

That 3% commission is not listed anywhere in the counter. The buyer's agent has her own counter form that went to my agent to request the 3%. So, my agent can a) decline the request of 3%, b) accept and take only 1% for herself, or c) accept and re-negotiate our contact from 4% to 5%.

The buyers counter is a hefty chunk off our current asking price, + sellers pay all closing, + upgraded home warranty, (+ the 1% addt'l commission that they don't know their agent has asked for), OH and + our new-ish SS refrigerator

Legally, no wording can be in our counter regarding the commission (and the agent's request for an addt'l 1%)

Fortunately, we have another offer on the table along with this one. We are countering both, advantage to offer #2 which is favorable to go through. On offer #1 I told our agent we will not re-negotiate to 5% commission, and she will not take 1%...so the buyer's agent will get a decline on the 3% request.

Hopefully in considering our counter, the buyer's agent can keep her client's interest best in mind and not be spite full of (only) making ~15k on this potential deal.

...and on a funny little twist...turns out that the people who's agent is asking for more commission...(see if you can follow this...) their daughter is married to the son of very good friends to my mother-in-law. So my mother-in-law's very good friend and these potential buyers, are in-law related. My mother-in-law may have relayed the agent's request of more commission to her very good friend, who may be relaying that information to her son's in laws . Of which, mind you, I have not instructed her to do so...just having a conversation with my mother-in-law...
Quote:
Originally Posted by Sunshine Rules View Post
The buyer's agent, if asking for a higher commission than what is being offered through the listing agent in the MLS, is in violation of the NAR Code of Ethics:

Standard of Practice 16-16
REALTORS®, acting as subagents or buyer/tenant representatives or brokers, shall not use the terms of an offer to purchase/lease to attempt to modify the listing broker’s offer of compensation to subagents or buyer/tenant representatives or brokers nor make the submission of an executed offer to purchase/lease contingent on the listing broker’s agreement to modify the offer of compensation.


The listing agent needs to remind the buyer's agent and the agent's broker of this. If the buyer's agent wants more compensation, that should be worked out between the buyer and the buyer's agent.

I posted the OP's input, as I think your citation of 16-16 is most likely a misapplication.
Where does the OP indicate that the buyer's offer, or submission of that offer, is contingent on the requested commission as prohibited in 16-16? I cannot find that reference in her posts.



Quote:
Originally Posted by Silverfall View Post
It isn't ethical. It is appropriate for a buyer agent that has a buyer agency agreement to make up any differentials to try and renegotiate their commission with the listing agent as they have a fiduciary duty to their buyer to try and not have them pay that shortfall. BUT agents need to do it before they write the offer for your buyer, or you accept the commission as-is. It isn't ethical to have commission negotiations at the same time you are submitting an offer regardless of buyer instructions.

If the listing agent won't increase the commission, then the buyer agent asks for additional closing costs for their buyer to cover their 1% differential. That would be in keeping with their fiduciary duty to the buyer.

I'm not with you on this one.

The agent communicated before she wrote the offer.
And, with no slight whatsoever to the OP, her agent is the only person with full professional knowledge of the specifics.
I'm certainly not crazy about what I read regarding the request, but I see a lot of conclusion jumping in the thread.
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Old 05-06-2018, 07:15 AM
 
Location: Cary, NC
32,851 posts, read 57,228,575 times
Reputation: 31645
Quote:
Originally Posted by GoPhils View Post
Well this is City-Data after all. The “facts” are assuming that OP is actually telling the truth. If I’m reading correctly (and maybe I’m not), it certainly sounds like OP is saying this is being done without the buyer’s knowledge.
I assume that the OP is truthful, as the story is consistent as it develops.
That doesn't mean that I would assume we have a complete and accurate picture.
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Old 05-07-2018, 12:19 PM
 
Location: All Over
4,005 posts, read 4,448,166 times
Reputation: 3084
Let her walk, if she has buyers who is interested and she's not going to show them because the commission which was clearly posted isn't to her liking, she's not working in the best interest of her buyers and isn't someone I would ever want to use as my realtor.
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