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I am waiting for an answer from the agent who is trying to sell my house. The question being, if I get an acceptable offer from a buyer who is unrepresented, who gets the other half of the commission?...
Why wait for your agent? You should read your listing agreement which should spell out the terms of the commission payment. If it said your agent gets 5%, then you have your answer. If you wanted to keep half for yourself if you get an unrepresented buyer, then that should have been in the agreement.
So, if you were the listing agent, and the seller came to you with an unrepresented buyer, you would tell the seller that you will be keeping the entire 5%? You wouldn't be happy that there is 2.5% more negotiating room? And of course, this unrepresented buyer would be a rube, so they would be overpaying for the house anyway, correct?
Quote:
Originally Posted by rjrcm
Why wait for your agent? You should read your listing agreement which should spell out the terms of the commission payment. If it said your agent gets 5%, then you have your answer. If you wanted to keep half for yourself if you get an unrepresented buyer, then that should have been in the agreement.
So, if you were the listing agent, and the seller came to you with an unrepresented buyer, you would tell the seller that you will be keeping the entire 5%? You wouldn't be happy that there is 2.5% more negotiating room? And of course, this unrepresented buyer would be a rube, so they would be overpaying for the house anyway, correct?
I would have already discussed this possible situation with the seller when we signed the listing agreement. If giving up half the commission was expected, it would be in the agreement as a variable compensation clause.
That being said, I would consider each negotiation and determine if assisting with my compensation is necessary.
Regarding the buyer being a rube and overpaying, that's not my problem as a listing agent. In fact, it's my duty to get as much for my seller as possible. That's why they should have their own representation.
Regarding the buyer being a rube and overpaying, that's not my problem as a listing agent. In fact, it's my duty to get as much for my seller as possible. That's why they should have their own representation.
If that unrepresented Buyer is the rube, you should be paid extra for having to put up with him and making sure he gets to closing.
I wonder who they expect to sit down with the buyer, go through the contracts, line up the inspections,discuss HOA's, Home warranties, make sure the lender is on track and the buyer understands the HUD1 ?
I am waiting for an answer from the agent who is trying to sell my house. The question being, if I get an acceptable offer from a buyer who is unrepresented, who gets the other half of the commission?
My agent planned on making 2.5% on the deal (and giving the other 2.5% to the agent who brought us the buyer.) IF there is not other agent, why would I pay that other 2.5% to my agent? IF I don't have to pay it, maybe I can accept a lower offer on the house. If I signed an contract that says 5% payment due no matter what, I will.
Likewise, if I find a house to buy on my own, and make an offer to the selling agent/owner, I would ask to get 2.5% off the selling price.
I'm not trying to downplay the value of an agent. I can't help it if an unrepresented buyer wants my house. And if I go online and find a home 800 miles away, and don't think I need an agent, then why pay their commission?
thanks
Bish, it's apparent to me that you're having some remorse about hiring an agent. By the way, if you were to get an offer from an unrepresented buyer, how do you think that buyer became aware that your house was for sale? You don't say how long you've been listed, but you're thinking of a way to cut your agent's fee in half. How much have you paid so far? How much work has your agent and your agent's company done in good faith on the potential that you might live up to your obligations by paying your negotiated fee? Perhaps you should focus your efforts on improving your home's curb appeal and/or listening to your agent's advice about proper pricing and positioning to get an acceptable offer rather than cutting somebody's fee in half. If you think you can pick a house off the internet without knowing what similar houses have sold for in the past 3-6 months, navigate through an unfamiliar purchase and sale agreement, pre-approval, inspections, appraisal, underwriting, re-negotiation after inspection, title search, survey and more than you are better than most.
Good golly, the agents get defensive on here pretty easily. Of course it's possible. Your agent may not go for it, but given the choice between not seeing any commission at all and seeing just as much as they would have received if there was an agent on the other end, what do you think they'll do?
Right up to the point that both parties sign a contract (whether it be listing or contract of sale), yes, pretty much everything that it's legal to negotiate is negotiable.
At the point that an agreement is struck and both parties willingly sign a contract (in this case, listing agreement), the agreement has been made and trying to change it AFTER work has been done is not acting in good faith.
Trying to change someone ELSE's agreement and contract for your own benefit is a whole 'nother ballgame as far as ethical (and sometimes legal) behavior is concerned.
Disagreement, or pointing out the problems associated with a proposed course of action, is not "defensiveness", by the way. No matter how convenient it might be to characterize it as such.
Good golly, the agents get defensive on here pretty easily. Of course it's possible. Your agent may not go for it, but given the choice between not seeing any commission at all and seeing just as much as they would have received if there was an agent on the other end, what do you think they'll do?
Everything is negotiable. Everything.
If you're referring to me, I'm not being defensive, I'm all about both parties living up to a written agreement. The OP agreed to pay his agency a certain fee, so long as a ready, willing and able buyer is produced that closes on the property and all risk and expense is on the agent. As THL explains, real estate commissions are negotiable, but once an agreement is reduced to writing that is where the negotiating ends for me. I'm not sure how you'd feel if your boss congratulated you on a job well done and then announced to you that your salary would be cut in half because of the increased efficiency that you created enabled the company to save money. I'm sure there are weaker agents out there willing to negotiate away their agreed upon fee, but is this the type of agent that you want representing your interests in a negotiation?
I just managed (herding cats) a similiar situation. Here's where the total commission might be earned in a scenario with an unrepresented buyer:
Minor issues with home inspection are addressed by unrepresented buyer (UR) as "to code" in a county where "code" (in older homes) can be variable, open to interpretation, lengthy and expensive. Other issues are dealt with openly, and directly with buyer and resolved.
Loan officer decides that (since buyer is unrepresented) appraisal and loan approval don't need to be addressed until he/she is satisfied that all other contingencies are removed. Title company (next door to loan officer) refuses to move forward as well. They aren't subject to contract deadlines ... the buyer is. Listing agent's emails go into the black hole. Buyer finally puts all other parties on notice that they WANT to close and it's time to move forward. How would you have your agent address this?
Closing is a love-fest, with both parties happy (despite 4 hour delay), Hud-1 drafted 4 times because the commission, rebate, subsidy and home inspection allowances are wrong. Yeah, it was my job, but really, having another agent involved might have assured that "their" title company printed out the emails and the forms.
So .. my clients (sellers) were happy. The buyers were happy. I was honest, ethical and earned my commission. My commission had nothing to do with loan officer or title officer, they got theirs.
So who do you imagine does all this extra work if there isn't a rational agent on the buyer's end? This was a unique home and a fair offer. The buyer and seller were awesome people. Good luck, hope you have a good agent that can manage "slippage' rather than saying "tough luck, they didn't meet the deadlines .. next".
Respectfully submitted.
Quote:
Originally Posted by BishBash
I'm using an agent to see my home, by the way, so I believe in them.
My agent agreed to a 5% commission (vs 6%). When we sell, they get 2.5%, and the agent who brings the buyer gets 2.5%.
Now, it doesn't seem right that I give the full 5% to my agent if the buyer has no agent. I would expect to give my agent 2.5%, though I admit the contract I signed is for 5%!
Maybe I'm getting closer to an answer. But it would seem this would be black and white, unless there are contracts that say "2.5% to the listing agent, 2.5% to buyer's agent". IF there is no buyer's agent, then the home seller should retain that amount.
Right up to the point that both parties sign a contract (whether it be listing or contract of sale), yes, pretty much everything that it's legal to negotiate is negotiable.
At the point that an agreement is struck and both parties willingly sign a contract (in this case, listing agreement), the agreement has been made and trying to change it AFTER work has been done is not acting in good faith.
Trying to change someone ELSE's agreement and contract for your own benefit is a whole 'nother ballgame as far as ethical (and sometimes legal) behavior is concerned.
Disagreement, or pointing out the problems associated with a proposed course of action, is not "defensiveness", by the way. No matter how convenient it might be to characterize it as such.
People negotiate and renegotiate contracts all the time. Just because something is written in a contract doesn't mean it cannot be a subject of future negotiation. There's nothing unethical or "bad faith" about that. And no, there's nothing wrong with asking an agent to take a lower percent commission than he or she agreed to, particularly when there was an assumption that the commission would be split. The agent either wants to see the deal close or he doesn't.
And to be honest, buying a house is not rocket science. It may seem awfully complicated to one buyer, and won't be to the next. We're talking about a situation in which the buyer doesn't have an agent on his side, and the seller's agent wants to get a windfall by collecting a fee for doing nothing or very little simply because the buyer didn't foresee that circumstance when he or she signed the listing agreement.
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