Trying to switch realtors because the second one is offering refunds (sales, condo)

[drmstx]

Hi all,

We are first time home buyers and we recently saw the model to a to-be-built condo and liked it. We drove to the community a couple of times and found the place ourselves. In our effort to get a better offer, we then approached a realtor, who we were hoping would either negotiate with the builder for some upgrades, or at least refund us a part of his commission (Redfin does it all the time, so I figured why not this realtor).

We went to the property sales office for the third time, this time with the realtor being present with us. The sales office said the properties were selling like hot cakes and said we could reserve a home of our liking for 7 days till we decided on whether to go forward with it or not by signing a $0 'reservation deposit agreement' that included the name of the realtor as the one who referred us to the property. Also, we did not put any deposit down when signing this and we did not write any exclusivity agreement with the realtor or his parent company.

Now, I have found another realtor that is promising to refund us a part of his commission as closing cost(which the first one was not willing to do). Can I switch to the new guy at this point for the same property that I have locked in, or will it raise any legal issues for us later? I am guessing it should be ok, since I never signed any agreement with the Realtor himself. Just wanted some opinions on this from this forum.

[lqda4]

Since you put down the name of the first agent with the developer, I assume this agent will get commission (if you end up buying that condo) and not the second one. The issue here will not so much about the first agent, but how the second agent will be able to get commission if you switch to him. Now if you move on and buy some **other** property with the second agent then I don't think there is any issue (again, since you don't have any exclusive agreement with the first agent for any period of time as you have stated).

[tysonsengineer]

If its new development, why do you need a realtor? I bought my condo which was sold by developer without one, and told the developer I wanted that 3% pocketed so don't even include it as part of the negotiation. Whether or not at the end of the day it affected the price is objective but in my mind, the 3% was never there so being 3% below asking would be the same as asking, which helped guide me on what I was willing to offer.

[boyd888]

What you are referring to is "procurring cause," which basically means the person who showed the home first is entitled to the commission on it if that results in you buying the place soon after. You could close with the second guy, but then the first guy could theoretically come back and arbitrate for the commission since he was listed on your referral documents first. Maybe not an open/shut for the first guy, but still messy.

If the first realtor hasn't done any real work beyond showing up that one time, you could have the second guy contact the first guy and have him offer a buyer's agent referral fee to get out of the picture. First guy gets a little something for time he put in, second guy gets the commission, you get your rebate. Everyone wins.

[newnewsmama]

Originally Posted by tysonsengineer

If its new development, why do you need a realtor? I bought my condo which was sold by developer without one, and told the developer I wanted that 3% pocketed so don't even include it as part of the negotiation. Whether or not at the end of the day it affected the price is objective but in my mind, the 3% was never there so being 3% below asking would be the same as asking, which helped guide me on what I was willing to offer.

A lot of developers (especially big national builders) won't do this. They sell you at the same price with or without a realtor.

When I bought my first home, I asked my builder this question. They told me to maintain an amicable relationship with realtors, they wouldn't drop the price for any buyer without a realtor.

Smaller builders may be more flexible. Also, things were a little different during the housing crisis.

[Carlingtonian]

The normal agreement one signs with a realtor is that you can fire them any time, but if you buy a house they showed you or told you about, they get the commission (which is fair). If they failed to find you the house you end up buying, there's no reason they should be paid. They don't get paid for trying, just for succeeding.

[spencgr]

Originally Posted by newnewsmama

A lot of developers (especially big national builders) won't do this. They sell you at the same price with or without a realtor.

When I bought my first home, I asked my builder this question. They told me to maintain an amicable relationship with realtors, they wouldn't drop the price for any buyer without a realtor.

Smaller builders may be more flexible. Also, things were a little different during the housing crisis.

.....Or more persistent buyers may be more effective. Just because they initially say they don't do it, doesn't mean they don't. I think they were trying to hardball, and you didn't even attempt to negotiate.

[tysonsengineer]

Originally Posted by newnewsmama

A lot of developers (especially big national builders) won't do this. They sell you at the same price with or without a realtor.

When I bought my first home, I asked my builder this question. They told me to maintain an amicable relationship with realtors, they wouldn't drop the price for any buyer without a realtor.

Smaller builders may be more flexible. Also, things were a little different during the housing crisis.

I bought from Donahoe in 2010 at Park Crest (400+ unit high rise). I assume they are a large builder, and I was very much able to tell them drop your price and btw the 3% is non-negotiable. Ended up under 10% asking... then again I'm middle eastern and negotiating/bartering is like an Olympic sport to us. I refuse to let someone, who is trying to get hundreds of thousands of dollars from me to make a profit (instead of losing money on the finance costs of holding onto it), dictate what I must do. I am the customer, on the largest purchase one can make, you better believe I will always be right.