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Not always the case. Say Realtor A worked with a buyer for three months, showed them a lot of houses, got them prequalified for a loan, and took them back to the same house 3 times (once for them, once so that they could see it again, and once for the parents to see it). Then, Realtor B, the buyers cousin who never stepped foot inside the house presents an offer on behalf of the buyer. Realtor A would clearly be the procuring cause of the sale and therefor entitled to the commission.
That's true, and as long as Realtor A had some documentation that he/she showed the buyer the house three times, I agree that would trump Realtor B's one-shot offer.
The interesting part of the hypothetical scenario is what the agency relationship between the buyer and Realtor A and Realtor B was. If both agents were in effect acting as agents of the seller (either as listing agent + sub-agent, or both as sub-agents because the listing agent was "Realtor C") that would be very different than if the buyer had, say, an agency contract with Realtor A and then put an offer through Realtor B without terminating the buyer agency contract.
if the buyer had, say, an agency contract with Realtor A and then put an offer through Realtor B without terminating the buyer agency contract.
In that case, Realtor A would have a cause of action against Realtor B for interfering with a contract. I've seen this, too. Inside baseball stuff, here, that most people in the public are not aware of.
I have been to numerous open houses in april and had the same thing happen at most of them. I didn't really care because I was casually looking and knew as soon as walking in the door the house wasnt for me. A lot of them even had forms to sign saying that you would only put in offers through them. It was mostly the big RE agencies where I saw this, century, prudential, REmax, and come to think of it they were kind of pushy and it was a turn off. It was almost like they had this attitude that they were doing me a favor to let me look at the property. It seemed like the smaller sort of no name agencies were much more non-nonchalant and nicer.
Did they check your ID too? I'd sign the form as "Minnie Mouse" and put down phony info.
I was in Valley Stream today and saw an open house so I decided to check it out. Walked in and met the woman showing who was pleasant enough but when I said I am not working with a realtor at the moment she said, "If you decide you want to put an offer in you HAVE to go through me, you know" Keep in mind I was in the house for a total of 3 minutes and barely saw enough to decide if I even liked the house. I may be a first time home buyer but I'm no sucker, there is no way I would try to negotiate without a buyers agent! I told the woman that "it's not like it's a law" and she was really offended. She said, "well I could ask you not to look at the house", which really took me by surprise! I really couldn't believe this pleasant woman from 3 minutes ago was basically telling me not to look at this for sale property. I just said in a very smirky way, "I don't really think the sellers would appreciate that comment." I went through the house quickly and left. Just FYI - I was dressed casually but nice enough, mentioned I am preapproved and never got nasty - all my remarks had a lightness to them. Can someone enlighten me to Moderator cut: language
happened and why? What is the deal with her saying I HAVE to put an offer through her? Wouldn't it be a conflict of interest to represent the buyer and seller? I don't have a realtor right now because I am not actively looking until the fall but that doesn't mean I can't find one.
thanks and sorry for the long post. Just annoyed
She was being greedy and rude. Let's say you wanted that house. You don't need a buyer's broker to represent you, so you don't need "her" specifically or anyone else for anything. You don't need to bring in a buyer's agent after the fact. You will have a RE attorney to structure the deal. If you want a buyer's agent get one before looking at houses and let them work for their money. If you want to buy something that you saw on your own at an open house, you can just put the offer in yourself to the listing real estate broker and/or agent. If you end up buying the house and they want to throw her a crumb of the commission because she was staffing the open house, then that's their business.
1. Listing broker gets their share
2. Selling broker (first to introduce) gets their share
3. If you hire an agent as Buyer Broker, you should have a written contract which spells out how much is owed and when. If you/the Buyer Agent now make an offer on the house first introduced to you via the listing broker/company, unless the broker/company is willing to pay the selling commission to the Buyer Agent/company, the Buyer could theoretically owe another commission (as per contract).
Don't listing brokers often offer much less commission on their listing to buyer's brokers as a small bonus to show and sell the house because they assume the buyer's broker is being paid out of the buyer's pocket? If so, what do they do if the buyer's broker submits an offer in terms that say the seller is going to pay the commission since the buyer's broker is also the "selling broker?"
Don't listing brokers often offer much less commission on their listing to buyer's brokers as a small bonus to show and sell the house because they assume the buyer's broker is being paid out of the buyer's pocket? If so, what do they do if the buyer's broker submits an offer in terms that say the seller is going to pay the commission since the buyer's broker is also the "selling broker?"
First, it's not the listing agent that decides how much compensation is going to be offered to a buyer's broker, it is the home seller. Unfortunately, many agents do not adequately explain commission splits to sellers.
Today, most sellers offer the same compensation to Buyer's Brokers as they do to Seller's Brokers.
Don't listing brokers often offer much less commission on their listing to buyer's brokers as a small bonus to show and sell the house because they assume the buyer's broker is being paid out of the buyer's pocket? If so, what do they do if the buyer's broker submits an offer in terms that say the seller is going to pay the commission since the buyer's broker is also the "selling broker?"
I'll give some examples here for illustrative purposes.
First of all, the Buyers always pay the commission - after all, they're the ones with the pot of $$$ to pay whatever price is agreed upon; just because the commission comes off the sellers' side on the closing statement, doesn't mean they're paying. The Sellers do however determine how much the commission is - ironic, isn't it?
Yes, in the past - to a lesser extent now - the Listing Broker sometimes offered less commission (or none) to a Buyer Broker/Buyer Agent. As I mentioned in another post, I generally find a way around that.
Let's look at an example:
I'm selling my house and you're my Listing Agent.
We agree on a total commission to be paid to your Broker who then splits the total according to the listing agreement, with you getting whatever split your contract with your broker states.
We can use numbers (this is an example only!!): I want $500K and the total commission is 4.5%, with the understanding that the Selling Broker gets 2%. The Selling Broker never knows what I agreed to with you - that's confidential . Regardless of who sells my house, I have to pay the agreed upon 4.5%.
$500,000 sales price
- 22,500 total commission
---------
$477,500 to me after commission (before other closing costs)
=======
Split: 2.5% - 2%:
$22,500 total commission to Listing Broker
-12,500 Listing Broker keeps this amount and splits with agent (You)
--------
$10,000 total commission to Selling Broker who splits with selling agent
If the Listing Broker offers only 1% to a Buyer Agent, then the break-down is as follows (3.5% - 1%):
$500,000 sales price
- 22,500 total commission
---------
$477,500 to me after commission (before other closing costs)
=======
$22,500 total commission to Listing Broker
-17,500 Listing Broker keeps this amount and splits with agent (You)
--------
$ 5,000 total commission to Selling Broker who splits with Buyer Agent
======
More and more listings now offer the same compensation for all Agency relationships.
I think having 2 agents involved is quite silly myself.
I'll let you in a little secret. I have been able to secure better value properties (both estate sales in good locations) by just going with the listing agent (one a studio apt, another a house I'm closing on in a few weeks). If you do your homework by learning the local market, visit open houses frequently and call local real estate agents and telling them what you are looking for (and that your not looking for a buying agent), they will tripping over themselves to sell you a property before they have to split that commission with another agent. They will push the seller to take your bid even if it's a bit lower by saying you are more qualified just so they can keep that 100% commission. They will also do this more with the desirable properties, as they know it will sell anyway and why split the commission. That is why the original poster may have gotten that treatment from the agent at the open house.
The studio I purchased had an accepted offer through a 2nd agent. I met the listing agent by chance and she convinced the seller to go with me because they waited 1 day too long to send their binder check in. I paid 89k for it and it was in a oceanfront building sold if for 2x. The house I'm buying now had a direct bid for 17k more from a nieghbor (that would have sqeezed out the sellers agent too). The listing agent convinced the seller to take my bid (I was more prepared to close, but 17k is a lot of $) - I've never seen a RE agent work so fast to get these contracts drawn up & signed (1 day!) - another offer came in the next day for 10k more - but contracts were signed already! The listing agent also reduced his own commission to make the deal happen. Had I used an agent, I don't believe I would have gotten the property as we were not going to start bidding against others in this market.
I'm not saying using a buying agent is wrong (especially if you don't know the market your buying in or don't have time), but if your a working class joe, and you want an edge on the competition, this is a good way to approach it.
Sounds like you were dealing with some very unscrupulous agents. I'm glad it worked out for you, but it is disappointing to hear your impression that the agents put their own interests ahead of their seller clients.
I think having 2 agents involved is quite silly myself.
I'll let you in a little secret. I have been able to secure better value properties (both estate sales in good locations) by just going with the listing agent (one a studio apt, another a house I'm closing on in a few weeks). If you do your homework by learning the local market, visit open houses frequently and call local real estate agents and telling them what you are looking for (and that your not looking for a buying agent), they will tripping over themselves to sell you a property before they have to split that commission with another agent. They will push the seller to take your bid even if it's a bit lower by saying you are more qualified just so they can keep that 100% commission. They will also do this more with the desirable properties, as they know it will sell anyway and why split the commission. That is why the original poster may have gotten that treatment from the agent at the open house.
The studio I purchased had an accepted offer through a 2nd agent. I met the listing agent by chance and she convinced the seller to go with me because they waited 1 day too long to send their binder check in. I paid 89k for it and it was in a oceanfront building sold if for 2x. The house I'm buying now had a direct bid for 17k more from a nieghbor (that would have sqeezed out the sellers agent too). The listing agent convinced the seller to take my bid (I was more prepared to close, but 17k is a lot of $) - I've never seen a RE agent work so fast to get these contracts drawn up & signed (1 day!) - another offer came in the next day for 10k more - but contracts were signed already! The listing agent also reduced his own commission to make the deal happen. Had I used an agent, I don't believe I would have gotten the property as we were not going to start bidding against others in this market.
I'm not saying using a buying agent is wrong (especially if you don't know the market your buying in or don't have time), but if your a working class joe, and you want an edge on the competition, this is a good way to approach it.
If you were the Seller, how would you be looking at this issue? Looks like the agent is more interested in his/her own bottom line than doing the right thing for the Seller...
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