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Nobody is saying that you don't need the money. We are saying that it might not be your money.
Bubble boy is only talking about half of a commission that is asked in advance that "might" or "might" not be needed by the agent, but the seller pays it in advance "fer sure fer sure".
If you don't use it, return it. End of story (actually there is much more to that)
The forms, the rules, the joint escrow instructions, the code of ethics points at not keeping that money as the thing to do, plus it is reasonable. Reasonable is when you get a group of about 12 guys and girls, just like you, that agree with you.
I think that if you are not sure if you are going to use or not the money, you ought not to keep it.
Now, I am going out of town for a short while.
Please continue with out me.
BB
I know you have to do what you can to push your book but try and get the facts straight.
You keep saying the seller pays it in advance which is completely false in a straight commission listing, the seller signs a contract to pay a commission upon closing of the home. If it does not sell they pay nothing.
On the other hand if they go though a buy owner site or through an MLS only broker they do pay up front.
Most of your scenarios and statements don't have much basis in fact and some are just off the wall. You bring up contract and agency law but really don't know much about it.I think you should research a lot more.
Bubble boy is only talking about half of a commission that is asked in advance that "might" or "might" not be needed by the agent, but the seller pays it in advance "fer sure fer sure".
If you don't use it, return it. End of story (actually there is much more to that)
Apparently I've been doing this real estate thing wrong by waiting until closing to get my checks. Where do I sign up to get these advance fees?
Nobody is saying that you don't need the money. We are saying that it might not be your money.
Bubble boy is only talking about half of a commission that is asked in advance that "might" or "might" not be needed by the agent, but the seller pays it in advance "fer sure fer sure".
If you don't use it, return it. End of story (actually there is much more to that)
The forms, the rules, the joint escrow instructions, the code of ethics points at not keeping that money as the thing to do, plus it is reasonable. Reasonable is when you get a group of about 12 guys and girls, just like you, that agree with you.
I think that if you are not sure if you are going to use or not the money, you ought not to keep it.
Now, I am going out of town for a short while.
Please continue with out me.
BB
I think you don't understand the whole real estate business as well as you think you do.
I've never seen a contract that calls for half of a commission to be paid in advance, and that said partial commission "might or might not" be needed. The overwhelming majority of commission contracts (and remember, not all real estate marketing contracts are commission based; licensees use all sorts of business models, including hourly, a la carte fee for service, commission, etc.) call for the seller to pay the marketing agent a fee (either a set amount or a percentage of the sale price) upon the successful sale of the property. That fee, in it's entirety, belongs to the marketing agency. The marketing agency, in most cases, is telling the seller up front that they plan to market the property to other agents who may be representing clients that are looking for property, and that, as an inducement to those agents to bring their clients to this property, the marketing agency is going to offer some portion (often, but by no means always, half) of the agreed upon sales commission to an agent whose buyer client chooses to buy this property.
Nowhere is there any fee collected that "might or might not" be needed. Please rethink your supposition, and feel free to ask other questions if you continue to not understand.
Bubble boy is only talking about half of a commission that is asked in advance that "might" or "might" not be needed by the agent, but the seller pays it in advance "fer sure fer sure".
If you don't use it, return it. End of story (actually there is much more to that)
What I meant was that the seller has to agree, even before he signs the listing agreement, which will be his or her agency relationship agreement, to pay twice the fee to the agent. He has to agree to that in writing and in advance. He actually does not pay it in advance.
At the closing of escrow, the seller does pay it for sure, even if the seller's agent sold it him or herself and did not need it in the first place.
Why not explain the MLS as it was intended (read the MLS rules) so the seller understands how it works? Double ending and dual agency with only one agency contract are questionable at best.
All that has to go, mainly because it contradicts the transaction forms and the joint escrow instructions. On top of that, is unreasonable and hurts the chances of the seller, by offering to pay twice as much if the agent sells the property himself, but half if he gets help. There is more to it.
Receiving the MLS cooperating fee or additional compensation
Although I can make a strong case for California, because I have researched it, found the forms and interviewed people, what goes in California may serve as a persuasive argument for other states, meaning it might convince the reader that there is substance for the argument in your state.
Earlier, I did some comparisons with Florida. In Florida, if a buyer wants to hire a real estate agent, they probably have to do it in writing. I know that In California and Montana is a must and that is as far as I went.
In Florida, the buyer is obligated to pay the agreed fee to the buyer’s agent, like in California, but he can do it with the money the seller or his agent gives the buyer’s agent and keep the rest.
In California, the forms are templates and all the same, making them easy to follow. I noticed that in Florida, each broker writes their own forms based on some guidelines.
Here are two buyer brokers agreements apparently used in Florida.
The first one recognizes that the commission is credited to what the seller has given the seller’s agent during the Listing Process.
7. COMPENSATION: Broker’s Buyer will be responsible for paying Broker the amount specified below plus any applicable taxes but will be credited with any amount which Broker receives from a seller or a real estate licensee who is working with a seller.
Then, this other brokerage house writes in their buyer agency agreement that the agent is entitled to the amount negotiated and whatever else the seller passes on through the MLS.
Compensation is collected from the seller/landlord or otherwise paid to BROKER from the proceeds of the transaction at the closing or consummation thereof. If any compensation paid by seller and/or landlord exceeds the amount of Broker’s compensation set forth herein, BROKER shall be entitled to accept any such excess compensation.
In California, our forms all look the same and come in a kit. That is a good thing.
Here is how California addresses the money the seller's agent placing on escrow for the buyer's agent.
COMPENSATION PAYMENTS AND CREDITS: Buyer is responsible for payment of compensation provided for in this Agreement. However, if anyone other than Buyer compensates Broker for services covered by this Agreement, that amount shall be credited toward Buyer’s obligation to pay compensation. If the amount of compensation Broker receives from anyone other than Buyer exceeds Buyer's obligation, the excess amount shall be disclosed to Buyer, and if allowed by law paid to Broker, or (if checked) [ X ]credited to Buyer, or other
I guess that a buyer in Florida would have to know that he can simply put a line over any part of the contract they don’t like, but that is the buyer’s problem. The agent does not have to tell him that.
Understand that when the agent is negotiating with a buyer over the agent’s commission, the agent is not yet the agent until both sides understand what is in the contracts and agree to the terms by signing. So the agent is in no way obligated or has any duties towards the buyer.
The agent is negotiating for himself and that is a good thing.
Let’s assume that the buyer would want to pay 1% or even 2% and keep the rest, lets say 1%.
On a $300,000 transaction, that would be $3,000.
It would be in the best interest of the buyer to find a reasonable attorney to draw a buyer agency agreement from scratch, using the California BRE as a model. What would a lawyer charge for that?
$3,000? Probably not.
It is just a thought.
Keep in mind that in England consumers are paying 2% for agents services when in the US we pay 6% and in England, they use lawyers. This 6% Bubble either fixes itself or the lawyers will fix it.
Imagine if you can walk to OFFICE DEPOT and buy a buyer broker agreement for 10 bucks. Buyers would know what to look when negotiating and could then start looking for agents that will sign their contract.
Today, buyers simply don't know what is on the table and they are hurting to find a home.
This ability for the seller to pass money directly to the buyer outside of escrow gives the seller a tool to make his property more sellable. Offering a lot of money to agents so they give priority to properties with higher commission rates does not work as good as if the buyer get’s the seller to pay for his own buyer agent plus $10,000 if he chooses your property over a similar one. That is another post and I will talk about it.
The forms and the MLS are designed by the same people to allow the seller to pass money to the buyer via the agents so the buyer will choose that property over another. Read the forms carefully.
As for asking the buyer if he wants the rest of the "cooperating fee", the buyer will always want to get money if he or she can. The agent does not even have to ask.
In California, the buyer agent form makes the agent put a cross on the box. so the agent does not forget to mention it. This feature is what will keep the agent in business. The lower he charges, the more other buyers he will get.
Today, as we all know agents are representing buyers without valid agency relationship agreements and filling in agency disclosure forms as if there were one, just because they rather keep the 3% additional compensation in full.
NEW RULE!!!!
If you are not brokering in California, I might stop directly answering your post unless you can supply links to the forms or laws you mention. It is just too much work and I have plenty just doing California.
If the State of California fixes this, the whole country will follow suit.
I think, this time, it is going to happen.
Being a Real Estate Broker is the best profession in the world. Where else can you wake up in the morning, grab a cup of coffee, walk outside to pick up your newspaper and be immediately surrounded by your inventory. I love that feeling.
BB
Last edited by bubbleboy; 02-27-2013 at 01:18 PM..
Reason: types
Although I can make a strong case for California, because I have researched it, found the forms and interviewed people, what goes in California may serve as a persuasive argument for other states, meaning it might convince the reader that there is substance for the argument in your state.
Earlier, I did some comparisons with Florida. In Florida, if a buyer wants to hire a real estate agent, they probably have to do it in writing. I know that In California and Montana is a must and that is as far as I went.
In Florida, the buyer is obligated to pay the agreed fee to the buyer’s agent, like in California, but he can do it with the money the seller or his agent gives the buyer’s agent and keep the rest.
In California, the forms are templates and all the same, making them easy to follow. I noticed that in Florida, each broker writes their own forms based on some guidelines.
Here are two buyer brokers agreements apparently used in Florida.
The first one recognizes that the commission is credited to what the seller has given the seller’s agent during the Listing Process.
7. COMPENSATION: Broker’s Buyer will be responsible for paying Broker the amount specified below plus any applicable taxes but will be credited with any amount which Broker receives from a seller or a real estate licensee who is working with a seller.
Then, this other brokerage house writes in their buyer agency agreement that the agent is entitled to the amount negotiated and whatever else the seller passes on through the MLS.
Compensation is collected from the seller/landlord or otherwise paid to BROKER from the proceeds of the transaction at the closing or consummation thereof. If any compensation paid by seller and/or landlord exceeds the amount of Broker’s compensation set forth herein, BROKER shall be entitled to accept any such excess compensation.
In California, our forms all look the same and come in a kit. That is a good thing.
Here is how California addresses the money the seller's agent placing on escrow for the buyer's agent.
COMPENSATION PAYMENTS AND CREDITS: Buyer is responsible for payment of compensation provided for in this Agreement. However, if anyone other than Buyer compensates Broker for services covered by this Agreement, that amount shall be credited toward Buyer’s obligation to pay compensation. If the amount of compensation Broker receives from anyone other than Buyer exceeds Buyer's obligation, the excess amount shall be disclosed to Buyer, and if allowed by law paid to Broker, or (if checked) [ X ]credited to Buyer, or other
I guess that a buyer in Florida would have to know that he can simply put a line over any part of the contract they don’t like, but that is the buyer’s problem. The agent does not have to tell him that.
Understand that when the agent is negotiating with a buyer over the agent’s commission, the agent is not yet the agent until both sides understand what is in the contracts and agree to the terms by signing. So the agent is in no way obligated or has any duties towards the buyer.
The agent is negotiating for himself and that is a good thing.
Let’s assume that the buyer would want to pay 1% or even 2% and keep the rest, lets say 1%.
On a $300,000 transaction, that would be $3,000.
It would be in the best interest of the buyer to find a reasonable attorney to draw a buyer agency agreement from scratch, using the California BRE as a model. What would a lawyer charge for that?
$3,000? Probably not.
It is just a thought.
Keep in mind that in England consumers are paying 2% for agents services when in the US we pay 6% and in England, they use lawyers. This 6% Bubble either fixes itself or the lawyers will fix. it.
Imagine if you can walk to office depot and buy a buyer broker agreement for 10 bucks. Buyers would know what to look when negotiating and could then start looking for agents that will sign their contract.
Today, buyers simply don't know what is on the table and they are hurting to find a home.
This ability for the seller to pass money directly to the buyer outside of escrow gives the seller a tool to make his property more sellable. Offering a lot of money to agents so they give priority to properties with higher commission rates does not work as good as if the buyer get’s the seller to pay for his own buyer agent plus $10,000 if he chooses your property over a similar one. That is another post and I will talk about it.
The forms and the MLS are designed by the same people to allow the seller to pass money to the buyer via the agents so the buyer will choose that property over another. Read the forms carefully.
As for asking the buyer if he wants the rest of the "cooperating fee", the buyer will always want to get money if he or she can. The agent does not even have to ask.
In California, the buyer agent form makes the agent put a cross on the box. so the agent does not forget to mention it. This feature is what will keep the agent in business. The lower he charges, the more other buyers he will get.
Today, as we all know agents are representing buyers without valid agency relationship agreements and filling in agency disclosure forms as if there were one, just because they rather keep the 3% additional compensation in full.
If you are not brokering in California, I might stop answering your post unless you can supply links to the forms or laws you mention. It is just too much work and I have plenty just doing California.
If the State of California fixes this, the whole country will follow suit. I think, this time, it is going to happen.
The whole giving buyers money via the agents, outside of escrow and only after escrow closes is a clever and a good way to help the seller and the buyer keeping lenders out of the loop.
Today, the buyer has to go scrambling to get money for closings costs, since any money the seller tries to pass to the buyer gets grabbed by the real estate agents and does not make it through.
But the buyer can't really put the closing costs on a credit card or borrow it, since it would mess up the loan application. It is just a pain.
Buyers save for the down payment and to qualify for a loan, but seldom think of closing costs.
That is why the forms were written the way they are written, to give liquidity to the transaction.
It is a huge mess and it is hurting regular folks.
The thing is that everything is in place to be done right, but nobody is watching and real estate agents do what they think is right. There is no conspiracy to do anything wrong or to curtail competition. There is no anti trust monopoly.
The problem is that agents have to handle multiple transactions at the same time. The hiring of the agent, the listing of the property, the actual selling or writing the purchase offer and then the escrow.
The forms morph as the transaction develops and there is no manual on the form.
Agent's can't help that and they have been investigated ad nauseaum and they always come clean.
Tell agents how to do it right, and they will and the public will love them.
Today, agents get a bum wrap. Is not really their fault.
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Correction
