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If your seller has not specified which offers they want to see, would you forward an email offer?
Maybe. An email is no more than a verbal offer. I'd probably call my client and give them the details of the offer. I might forward the email if appropriate. Either way, the client would know the details of the email even though it's not an official offer.
Why don't you put it in an official contract offer in writing so it will be legitimate ?
Captain Bill and I are in the same MLS (different agencies). Our listing agreement does not give half the EM to the agent, and in fact, it does not address EM at all.
This is from section 6g of the 2012 Arizona Regional MLS (armls.com), I may be incorrect but I think this is the MLS service for the greater Phoeniz metro which you serve:
"FAILURE TO COMPLETE. If completion of a sale or rental is prevented by default of Owner, or with the consent of Owner, the entire sale or rental commission, as appropriate, shall be paid to Broker by Owner. If any earnest deposit is forfeited for any other reason, Owner shall pay a brokerage fee equal to the lesser of one-half of the earnest deposit or the full amount of the commission."
I am not a lawyer, but it appears that the ARMLS listing agreement does mention EM and does stipulate that the Broker gets 1/2 the EM. It is ironic that the seller is also obligated to pay commission (regardless of whether the house sells) if a "Broker produces a ready, willing, and able purchaser" section 6b ARMLS.
So if I understand the logic...the broker's primary role is to deliver a buyer, and that in and of itself, is enough to potentially justify payment of commission. But if the Broker delivers a dud buyer who breaches contract and harms the seller, the Broker gets half of the EM. This is typical of many Listing Agreements and as someone outside of the business, I dont think it is a fair or balanced contract.
This is from section 6g of the 2012 Arizona Regional MLS (armls.com), I may be incorrect but I think this is the MLS service for the greater Phoeniz metro which you serve:
"FAILURE TO COMPLETE. If completion of a sale or rental is prevented by default of Owner, or with the consent of Owner, the entire sale or rental commission, as appropriate, shall be paid to Broker by Owner. If any earnest deposit is forfeited for any other reason, Owner shall pay a brokerage fee equal to the lesser of one-half of the earnest deposit or the full amount of the commission."
I am not a lawyer, but it appears that the ARMLS listing agreement does mention EM and does stipulate that the Broker gets 1/2 the EM. It is ironic that the seller is also obligated to pay commission (regardless of whether the house sells) if a "Broker produces a ready, willing, and able purchaser" section 6b ARMLS.
So if I understand the logic...the broker's primary role is to deliver a buyer, and that in and of itself, is enough to potentially justify payment of commission. But if the Broker delivers a dud buyer who breaches contract and harms the seller, the Broker gets half of the EM. This is typical of many Listing Agreements and as someone outside of the business, I dont think it is a fair or balanced contract.
I'm sure you would consider it "unfair", just as you seem to think you can "find a house yourself", and "you only need someone to unlock the door for you"...
The problem with your logic is that in the act of "finding a house yourself", you're actually using a service provided by (in the case of ARMLS), about 35,000-ish agents who pay for the hardware, software & infrastructure to bring those listings to you.
Zillow and it's ilk all get their listing data from ARMLS, and ARMLS is paid for by the very agents and brokers you despise. (and it isn't cheap, btw!).
Agents pay the same price for ARMLS access (and e-key access) - to use your words.."regardless of whether the house sells"..
This is from section 6g of the 2012 Arizona Regional MLS (armls.com), I may be incorrect but I think this is the MLS service for the greater Phoeniz metro which you serve:
This is typical of many Listing Agreements and as someone outside of the business, I dont think it is a fair or balanced contract.
Not sure where you got your info but a Seller or Buyer is not a member of an MLS. They are only under contractual obligation to what they agree in a Listing or Buyer Agreement. If you don't think something is fair you can 1. File a lawsuit to change or 2. Don't agree in writing.
If an agent brings you a Listing Agreement you don't like, negotiate the terms and if they will not then find another agent. No one forces you to agree to any terms.
As mentioned in a previous post....If a Sellers home is under contract and for NO legitimate reason backs out of that contract, the commission could possibly be owed whether the house closes or not. The agent has fulfilled their contractual obligations and could be due a fee. Personally, I would only collect my fee when the house closes but there are situations of extensive marketing, a long time period where much money was spent and extensive work performed where I can see an agent would want to be paid.
In your work, if someone asks for you to provide service and you fulfill that request 100% you would want to be paid even if at the last minute they said "Never mind". I've always thought maybe we should also have a Seller put up "Earnest Money" just like the Buyer is required. What about all the expenses incurred if a Seller walks on the deal ?
All parties... Title Company, Lender, Attorney, the Buyer, the Agents have spent much out of pocket money to get the deal to closing. If a seller walks for no reason there should be consequences.
So, if your seller does not specify, do you present any "offer" including verbal and email?
Absent written instructions from the seller to not present certain offers, I am required to submit all offers. In practice, if I had instructions to not present certain offers, I would still inform my seller that I have received this offer, in case s/he has a change of mind.
I am not required to submit an email or cover letter. Whether I would send my client an email or cover letter would depend on the subject matter and the exact wording of the email, and possibly some other factors.
This is from section 6g of the 2012 Arizona Regional MLS (armls.com), I may be incorrect but I think this is the MLS service for the greater Phoeniz metro which you serve:
"FAILURE TO COMPLETE. If completion of a sale or rental is prevented by default of Owner, or with the consent of Owner, the entire sale or rental commission, as appropriate, shall be paid to Broker by Owner. If any earnest deposit is forfeited for any other reason, Owner shall pay a brokerage fee equal to the lesser of one-half of the earnest deposit or the full amount of the commission."
I am not a lawyer, but it appears that the ARMLS listing agreement does mention EM and does stipulate that the Broker gets 1/2 the EM. It is ironic that the seller is also obligated to pay commission (regardless of whether the house sells) if a "Broker produces a ready, willing, and able purchaser" section 6b ARMLS.
So if I understand the logic...the broker's primary role is to deliver a buyer, and that in and of itself, is enough to potentially justify payment of commission. But if the Broker delivers a dud buyer who breaches contract and harms the seller, the Broker gets half of the EM. This is typical of many Listing Agreements and as someone outside of the business, I dont think it is a fair or balanced contract.
If the broker produces a ready and willing buyer at the sellers agreed terms (and all contingencies have been removed) then the broker has earned the commission.
If the buyer has the contingency of inspection and/or mortgage, then the commission is not due until the inspection contingency is removed, and the mortgage contingency is removed. Until contingencies are removed, the buyer is "ready and willing", but is not able to close.
One must understand that at the point where all the contingencies have been removed, the broker has many hours invested including marketing, negotiating, and working though escrow.
Therefore, it is only fair that if the seller elects to not sell at that point, the broker has earned the fee and should be paid.
If a "dud" buyer breaches the contract, then s/he has harmed both the seller and the listing agent. The seller has lost valuable marketing time, and the agent has invested a lot of time and money in the transaction. I see splitting the EM as being fair to seller and broker.
It is not always easy to get into a buyers mind in advance to determine if he is a "dud" buyer. If the buyer is known to be qualified, by producing the required signed Pre-Qualification form, or a Proof of Funds for a cash buyer, then that buyer is qualified. One could not see in advance that this is a potential "dud".
On the other hand, if an unrepresented buyer attempts to illegally interfere with the listing contract between the seller and broker, then that is a good indication that this may be a "dud" buyer. It is certainly a red flag that should signal to the seller to either stop, or proceed with extreme caution. If that person will try to illegally stiff the broker, it's a pretty good indication that he will try to stiff the seller at some point.
There are many court cases dealing with commissions. If you care to read them you can find the citations in the book "Arizona Real Estate, A Professional's Guide to Law and Practice, by K Michelle Lind, Esq., General Counsel for Arizona Association of Realtors.
It is a violation of the law to interfere with the relationship between a contractor and his customer.
Not sure where you got your info but a Seller or Buyer is not a member of an MLS. They are only under contractual obligation to what they agree in a Listing or Buyer Agreement. If you don't think something is fair you can 1. File a lawsuit to change or 2. Don't agree in writing.
If an agent brings you a Listing Agreement you don't like, negotiate the terms and if they will not then find another agent. No one forces you to agree to any terms.
Did not mean to imply that buyers and sellers are part of MLS. The issue I was raising is whether the seller even appreciates this in the contract. After pointing the EM issue out on this thread, I have at least 2 agents from different states intially deny it's existance.
The NC agent (?Broker) was clearly wrong and backtracked stating that he "probably" knew. The AZ agent has yet to respond. If agents on this thread deny the EM clause, they are either unaware of its existence, in denial, or deliberately misleading (the public). If Agents support it, they should speak up and defend it, just like you all defended the commission issue. If the agents, who are presumably very familiar with the LA contract dont know about these clauses, do you expect the average Joe to know?
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As mentioned in a previous post....If a Sellers home is under contract and for NO legitimate reason backs out of that contract, the commission could possibly be owed whether the house closes or not. The agent has fulfilled their contractual obligations and could be due a fee. Personally, I would only collect my fee when the house closes but there are situations of extensive marketing, a long time period where much money was spent and extensive work performed where I can see an agent would want to be paid.
The way the LA is worded, if the Broker "produces a ready, willing and able" the seller is liable for commission. Some of you have implied that this only implies to sellers who back out without a reason. Even if the seller backs out for a "LEGITIMATE REASON" they still owe the commission, correct?
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In your work, if someone asks for you to provide service and you fulfill that request 100% you would want to be paid even if at the last minute they said "Never mind". I've always thought maybe we should also have a Seller put up "Earnest Money" just like the Buyer is required. What about all the expenses incurred if a Seller walks on the deal ?
The commission clause in the LA is your seller EM, do you want more than the 4-6% commission?
Uncompensated time is the nature of commission sales. If you spend hours with a builder, cars salesman, etc and changed your mind they dont get paid. Some of the agents on this thread have pointed to lost or uncompensated time in RE and have used this as justification for high payouts on commission sales. Seems like you want to have it both ways.
The way the LA is worded, if the Broker "produces a ready, willing and able" the seller is liable for commission. Some of you have implied that this only implies to sellers who back out without a reason. Even if the seller backs out for a "LEGITIMATE REASON" they still owe the commission, correct?
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The clause deals with breach of contract by the seller, which means that it wasn't a legitimate reason. It isn't a breach if it terminates for legitimate reasons. You can honor the agreement and terminate. That's the point of contingencies. The 1/2 earnest money is the amount that is set for damages. The lesser of the two. 1/2 earnest money or the full listing commission. If the seller breaches they don't get the earnest money. Personally, I would never accept that clause in the AZ listing agreements. If the seller lies or behaves unethically, I expect to be paid my full fee. 1/2 of the amount of earnest money as damages isn't acceptable to me.
You aren't reading the clause correctly.
Edit: Oh, and there are very few contractual reasons for a seller to terminate. The only legitimate reasons for a seller to terminate not in a contract would be unexpected family or medical issues that came up. Only the most unethical and slimy of agents wouldn't agree to terminate for no fee when that happens. Whether or not a buyer agrees is a whole other ballgame.
Last edited by Silverfall; 08-11-2012 at 10:21 AM..
The NC agent (?Broker) was clearly wrong and backtracked stating that he "probably" knew. The AZ agent has yet to respond. If agents on this thread deny the EM clause, they are either unaware of its existence, in denial, or deliberately misleading (the public). If Agents support it, they should speak up and defend it, just like you all defended the commission issue. If the agents, who are presumably very familiar with the LA contract dont know about these clauses, do you expect the average Joe to know?
...
The seller gets the EM if buyer defaults. The seller and listing agent would have to negotiate it if the listing agent wanted half the EM. I would not want that. It is the seller who has lost out if the buyer defaults.
The purchase contract only states that in the event of a material breach, that the earnest money would be forfeited. The listing agreement states what the listing agent would be owed in that event. In my haste, and going back and forth with memory I mis-spoke, using reference to the purchase contract.
To be perfectly clear, the listing agreement printed section does not state that the EM will be split between seller and agent in the event of the buyer default. The EM goes to the seller. Below is the actual wording:
Quote:
"If any earnest deposit is forfeited for any other reason, Owner shall pay a brokerage fee equal to the lesser of one-half of the earnest deposit or the full amount of the commission".
If the full commission is less than one half of the EM, then the broker only gets the commission.
Personally, I would never accept that clause in the AZ listing agreements. If the seller lies or behaves unethically, I expect to be paid my full fee. 1/2 of the amount of earnest money as damages isn't acceptable to me...
I think the clause previously referred to is a buyer default. If the buyer defaults then the sellers owes agent a brokerage fee of the lesser of full commission or 1/2 the EM.
If the seller defaults, then the full commission is owed.
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