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I am pretty sure that the buyer contacted the agent and that the agent does not work for the builder.
I don't know any builders paying their agent 6% and if they are that is the builders issue and should not concern the buyer.
Not knowing all the info I am going to side a bit with the buyer on this one though.
If he is also getting the listing he should be able to work on this first commission a little since it is at 6% right now. Especially if there is no agreement in place.
I’ve been in the process of getting a new home built. I’ve talked with several builders and the one I’ve entered into negotiations with the one I liked best. We’ve ran into a bit of an impasse at this point however. I had originally found this builder by looking at a spec home of his. I contacted the realtor to get a hold of the builder (a big mistake I realize at this point) and the realtor has been involved with our negotiations ever since.
This is a bit confusing. Did you see the home and contact the builder's agent (REALTOR), or did you see the spec home driving by and contact an agent not associated with the builder to get in to see the house and negotiate the offer? The answer to that question (who the agent works for) is critical to answering your question.
I had originally saw the spec home by driving by it. I contacted the realtor from the sign in the yard to get a hold of the builder. Realtor has made themselves a part of this transaction ever since.
However, it appears from the rest of what you say that SOMEONE hired the agent, he's been doing the work, and now you somehow think that it is appropriate that the person who's been doing the work not be paid for the work they did on your behalf so that you can get what you want. If that's not what's happening, could you clarify so that you can get a good answer to this question?
I have not hired any agent or signed anything. My sense is this realtor sells all the spec homes for this particular builder. I'm certain the buildr and realtor have some type of agreement for the spec homes - but I am not in the know about it.
It's absolutely correct that if the builder is the one who hired the agent (who then works at the model and shows the homes and doesn't represent your interests, they represent the builder's interests), then you have nothing to say about whether or not they receive their commission, because they don't work for you.
If you were the one who hired the agent, what you're doing now is the equivalent of your boss hiring you to do a job, you do the job, and then your boss says, "Hey, it would be in my best interests not to pay you. How about you give up your salary that I agreed to pay you so that I don't have to?"
Initially all I was asking for is for the realtor to accept less comission for selling our current home - since they are already getting commision from the builder for the new home. It's a win-win proposition if you ask me and a nice packaged deal for everyone. They are unwilling to negotiate. My next step will be just to ask for a sum of cash at close in lieu of the reduced realtor commission for selling our home. I guess if that is not agreeable - I will walk at that point...Plenty of builders out there who are hungry for work. -
I had originally saw the spec home by driving by it. I contacted the realtor from the sign in the yard to get a hold of the builder. Realtor has made themselves a part of this transaction ever since.
This is a misunderstanding. This Realtor was clearly hired buy the builder to market & sell this home. That's why his nasme & number were on the sign. The Realtor hasn't "made themselves a part of this transaction ever since," they were a part of this transaction from the moment the builder hired them, long before you called.
Quote:
Originally Posted by pepe1
I have not hired any agent or signed anything. My sense is this realtor sells all the spec homes for this particular builder. I'm certain the buildr and realtor have some type of agreement for the spec homes - but I am not in the know about it.
Yes, it appears the agreement is the very comon one of marketing agent. The agent was hired to market & sell this builders homes. You have no reason to step into that. The Realtor should have made that very clear to you, and if he didn't, shame on him. He represents the builder, he does not represent you.
Quote:
Originally Posted by pepe1
Initially all I was asking for is for the realtor to accept less comission for selling our current home - since they are already getting commision from the builder for the new home. It's a win-win proposition if you ask me and a nice packaged deal for everyone. They are unwilling to negotiate. My next step will be just to ask for a sum of cash at close in lieu of the reduced realtor commission for selling our home. I guess if that is not agreeable - I will walk at that point...Plenty of builders out there who are hungry for work.
Well, it appears that at least one person, the agent, feels it's NOT a win win. He feels his service, marketing & selling your house, is worth a particular amount, and you disagree. You don't like the commission the agent wants to charge you for selling your current home. OK. So negotiate that commission. If the agent is unwilling to lower his commission, and can't show you that what he will do is worth what he wants to charge, go talk to other agents. There is nothing that says you have to use this agent to sell your current house. And I'm not sure why you feel the builder & his agreement with his marketing agent should be impacted by your choice of agents to sell your house, or the fee that agent wants to charge you. Go hire an agent, and you get to decide what his pay will be. But you can't step into an existing contractual agreement and demand that it be changed to suit you. Especially when you aren't one of the principals of that contract.
I am pretty sure that the buyer contacted the agent and that the agent does not work for the builder.
I don't know any builders paying their agent 6% and if they are that is the builders issue and should not concern the buyer.
Not knowing all the info I am going to side a bit with the buyer on this one though.
If he is also getting the listing he should be able to work on this first commission a little since it is at 6% right now. Especially if there is no agreement in place.
Now wait a minute, does working with this person as a buyer make the work to sell the house any easier/ less work or vice versa? They are 2 separate and independant jobs. Why should the agent be compensated less on one because of the other? I have to disagree with you this one Mike.
OP, the agent feels his time and work, plus the money spent, is worth his full share and I'm inclined to agree if they are good. If you don't like it you have the choice to hire someone else. It's not the agents fault you and the builder disagree on a sales price. I think you're way off base with your whole line of thought from the get go.
Now wait a minute, does working with this person as a buyer make the work to sell the house any easier/ less work or vice versa? They are 2 separate and independant jobs. Why should the agent be compensated less on one because of the other? I have to disagree with you this one Mike.
OP, the agent feels his time and work, plus the money spent, is worth his full share and I'm inclined to agree if they are good. If you don't like it you have the choice to hire someone else. It's not the agents fault you and the builder disagree on a sales price. I think you're way off base with your whole line of thought from the get go.
I usually don't answer questions like the original question because we usually don't get all the info.
When I first answered it I assumed that the agent was not the listing agent but since the OP added some additional info we then find out the agent is in fact the listing agent and this changes everything.
I also was thinking it was a model home, I have listed builder specs before and list them at 6% so I was wrong on all counts.
The way it was first presented was that the agent was the buyers agent and the builder was representing themselves.
With the additional info we have the buyer is trying to alter an agreement between the builder and the agent and does make my original view completely wrong.
Agreed. OP, this agent does not work for you. Therefore, you do not get to decide his commission on the home that you are buying. You can, as said, try to negotiate his commission for listing your home for sale, but don't be upset if he chooses not to charge less; many excellent agents know their worth and are good negotiators and won't lower their commission if asked. You have the option of interviewing other agents and seeing if you can find one who will take the listing for a lesser commission.
His contract with the builder is between them; you have nothing to do with that or with how much commission he is paid. If the builder is trying to get him, after the fact, to lower his commission, shame on that builder, too, by the way - he's trying to get someone who works for him to help a customer pay for a product (much as if a store asked an employee to throw in some of their salary to help a single customer pay less for a product). If the builder is using this as an excuse for not lowering the price, instead of owning up that he doesn't want to lower the price, or he can't afford to, shame on him again.
Also, agreed above, the agent was involved in the transaction long before you came on the scene, if his sign was in the yard of the house for sale. He could have been working with that builder for years, for all you know.
If the agents sign is there in front of the builder's development, then the agent is ALWAYS going to be involved. The builder has a pre-arranged commission agreement with the agent and the agents lists and markets the builders properties. This agent works for the builder and NOT for you. Also, the builder should not ever be hinting that the cost would be less without the agent because the builder and the agent have some sort of standard agreement that applies with all sales.
Well the deal is completely squashed at this point. It's painful to be so close - only a few thousand apart. But we could not agree on the price.
You are all right. This builders overhead is too high for whatever reason - and eventually this market will send that painful message to the builder and his contractors and brokers. On to the next builder who will be happyto get work in this this economy...
Well the deal is completely squashed at this point. It's painful to be so close - only a few thousand apart. But we could not agree on the price.
You are all right. This builders overhead is too high for whatever reason - and eventually this market will send that painful message to the builder and his contractors and brokers. On to the next builder who will be happyto get work in this this economy...
If the builder were hurting so badly, wouldn't they have negotiated down to get a deal closed?
This is the problem today...everyone thinks that the seller "owes" them something because the "economy is bad". It's a business decision and the builder didn't accept your offer because it was too low. You're looking to blame other parties, but the bottom line is you didn't want to pay what the house was worth, and the builder didn't owe you anything.
Go find a builder that's "hurting" and then right about the time you're set to close, ask yourself "I wonder why they're hurting and the other builder wasn't?"
The Realtor and that builder had an agreement that didn't affect your home. If the builder needed the Realtor to come off their price, they would have negotiated that internally. A Realtor can't hold a builder hostage like that.
You just want to justify not going up in price. That's completely fine and it's your prerogative, but understand that if it doesn't make financial sense to sell, a seller won't sell. Nobody owes you anything.
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