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What I want to know and we won't know is if this was brought up to the buyer before they looked at this house. I know they signed whatever buyers agreement, but all of this could have been avoided had the buyers agent mentioned that the seller is only paying 2 percent so, blah blah blah if you buy this daa daa daa and you'll owe me 1 percent. So, do you still want to look at this house? The OP makes it sound like it surprised everyone and that's badly handled.
My opinion is that in most cases like this the buyers agent should just take the 2 percent and go with that. I could see quibbling if what was being offered was maybe half a percent. Yes I mean .5. It can happen and I've seen it, but in the OPs case this buyers agent may be on the way to getting a percentage of nothing.
I write my buyers agreements that I am getting at least 2 percent, but its only to protect myself from a seller offering a half a percent where it comes out to be pretty chintzy on some little house. I just want some say in it if it gets way too low. While we do have a responsibility to look out for clients I do think we offer a service worth getting paid well for.
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?
What the agent is doing is wrong. Most likely unethical.
I personally would do this
I would tell the agent sure I’ll compensate the 1% additional. Send me your offer. . When the offer comes in I would counter with a 5% additional asking price and I would tell the buyers why I’m asking more. I would actually write it in the contract why I’m asking more. It would sink the deal (but I wouldn’t care) but it would let the buyers know the weasel of a agent they hired. I don’t care if you’re a “higher end “ agent. Your client wants to see my house and I’m offering x amount in comission. Don’t like it? Then don’t show the house or tell your clients you need to be additionally compensated ABOVE what IM paying you.
It’s crap like this that makes me want to simply do FSBO when I sell. I can hire someone for a set consultant fee agreed upon to help with the paperwork.
Someone said what does it matter as long as you get what you netted what you wanted. Seller offered what they felt was a fair commission at 4%. If I was the buyer I would fire the agent and file a complaint against them .
Last edited by Electrician4you; 04-29-2018 at 05:58 PM..
As a seller, sure I can. The contract between the buyer and the buyer's agent is really none of my concern. Now, if the buyer makes an offer that says that the offer includes an extra 1% for the buyer's agent, we can certainly consider structuring the close that way, but I may or may not play along. The buyer can also structure the closing to ensure that the seller gets paid correctly, and the buyer's agent gets what they want. IT's only a big issue if the buyer is trying to buy more property than they can really afford, and don't want to, or can't, come up with an extra $5,000 for the 1% I am not going to cover as seller, assuming a $500,000 offer.
this is all very accurate, IMO.
In my market, the listing agreement states what the Seller will pay the Listing Agent, and what the listing agent will pay a Buyer's agent.
Now, if the Buyer's Agent says "My clients will pay $X, because that includes paying me a 3% commission" that's one thing. Or if the Buyers made a written offer, but before agreement have said "and we want our agent paid 3% from that" - either should be fine.
On the flip side, theoretically all the Seller should care about in this arrangement is: WHAT DO I NET?
If this buyer and their agent wan their agent paid 3%, absent other offers, then the Seller decides for themselves whether such an offer nets them enough.
And in this case, if there are competing offers, then the Seller should decide whether this offer or another offer at their 2% BA commission nets them more.
And yes, a Seller and their agent would be wise to have an appraisal clause that said the house had to only appraise for $500K, not the $505K (or whatever the math should be) contract price.
She said it was a 2/2. The buyer agent wants 3% because she either has a buyer agency agreement requiring her buyer to pay her 1% or she is just trying to get the seller to pay her more without it being required by the buyer.
That's interesting that they do that in your MLS. That isn't allowed here. Whatever it is, is what it is. The buyer can request closing costs in the contract to cover their portion of any shortfalls, but we don't negotiate commissions in contracts here.
I think its the other way. I think she brought it up to the seller because there is an agreement in place between her and her buyer. I don't know about other states, but in my state to do what you are suggesting would be a violation. I can't just decide out of the blue that I want more money then what was originally agreed on and hold up a deal until I get it. I doubt that is allowed anywhere. At least it shouldn't be.
Just speculation of course, but my guess is that there was no agreement with a set %. If there was, she should have been able to handle it with the buyer without getting the seller involved. Maybe 3% is the “standard” in the area, so the agent didn’t think it was necessary to put anything in the contract that might scare the client. Along comes OP’s house, and she says to herself, “Ah, shoot...”
Quote:
Originally Posted by I love boots.
The reason to bring it up is to see if the seller will work something out to make it possible for the buyer to honor the agreement to pay the 1 percent. It may be that the only other option is to let the deal fall apart
There is another option. You said it later:
Quote:
Originally Posted by I love boots.
My opinion is that in most cases like this the buyers agent should just take the 2 percent and go with that.
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.
So. Here’s where the slippery slope comes in for me on the value of an agent. If the buyer is so willing to cough up the point to get the house... doesn’t that mean my listing agent undercut my price point? (Assuming full list).
To me, it’s just a bad look all the way around. Commission was 2/2 in the listing - take your 14 G’s and do your job.
So. Here’s where the slippery slope comes in for me on the value of an agent. If the buyer is so willing to cough up the point to get the house... doesn’t that mean my listing agent undercut my price point? (Assuming full list).
To me, it’s just a bad look all the way around. Commission was 2/2 in the listing - take your 14 G’s and do your job.
If the buyer's agent (any buyer's agent) were providing value to the buyer, the buyer would be willing to directly pay for the value received at the proper worth of that service to that buyer. With no need for any shenanigans.
Just speculation of course, but my guess is that there was no agreement with a set %.
That is unlikely. Why? Because in order for a Buyer's Agent to be able to collect a commission from a Buyer, the agreement has to be in writing. It's as simple as that.
To jump on the speculation train, it is most likely that the Buyer's Agent has a written agreement for the Buyer to pay a minimum commission; therefore, her attempt to get the Seller to pay for that commission was in the Buyer's interest. There's nothing wrong with that. However, the tact taken was a crude one that the Seller simply needs to ignore. Extraneous emotional responses need to be put aside and, as always, the net price needs to remain the consideration.
IMO, the agent should be happy with the 2% and simply work to close the deal.
That is unlikely. Why? Because in order for a Buyer's Agent to be able to collect a commission from a Buyer, the agreement has to be in writing. It's as simple as that.
To jump on the speculation train, it is most likely that the Buyer's Agent has a written agreement for the Buyer to pay a minimum commission; therefore, her attempt to get the Seller to pay for that commission was in the Buyer's interest. There's nothing wrong with that. However, the tact taken was a crude one that the Seller simply needs to ignore. Extraneous emotional responses need to be put aside and, as always, the net price needs to remain the consideration.
IMO, the agent should be happy with the 2% and simply work to close the deal.
Of course.
Such a fundamental point that escapes so many posters.
Work on the deal, not on the pique.
Emotions bring endless intrigue to real estate.
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