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And the buyer cannot unilaterally change the compensation agreement. If he signed a document agreeing to a certain fee, then he needs to abide by that agreement. None of us know what was agreed to or signed.
From the original post:
Quote:
Originally Posted by skubaman
Hi, I had an offer accepted and I am signing escrow next week. I got the escrow statement summary and had 0.5% incremental commission for my broker (buyer). He explained that the listings on this property pays only 2.5%, and that he usually gets 3.5%, that the statement should actually have 1% additional instead of 0.5%.
This agent is highly regarded with 30 years experience in the market. He has been very helpful as we have been looking at properties for months. He has actually recommended me making a lower offer on this property than I was planning to, saving me $25k.
So he told me I don't have to pay additional commission, it could be 0%, 0.5% or 1%, but that he would normally get 3.5%. We don't have an agreement on minimum commission and I never thought I would have to pay it. It just hurts me that he is telling me this a couple days before I close escrow.
Thanks for all the feedback. Let me clarify a few things:
- We did not agree on a minimum commission when we first met
- I have not signed a buyers agent agreement
- In the escrow statement it was added 0.5% which is about $5k. When we talked he said he would usually get 3.5% total, so the escrow statement should have 1%, $10k.
- But that'it's up to me. I don't have to pay him anything additional.
- The deal will go through no matter what.
I was really happy with his services, even thinking of getting him a nice gift, invite for dinner, etc.. this whole situation now in the end is very upsetting.
I would just tell him bluntly that you are very concerned at about why he thought he could add any additional fee to your escrow without your permission and without an agreement. Then I would let him know that that you think that he is being fairly compensated for his services already.
If .5% is $5,000 then this is a $1,000,000 contract price...at 2.5% he is already getting $25,000 for helping you. That is more than enough for a buyers agent services.
And the buyer cannot unilaterally change the compensation agreement. If he signed a document agreeing to a certain fee, then he needs to abide by that agreement. None of us know what was agreed to or signed.
In your hurry to protect the almighty commission you apparently missed the part where she said:
Quote:
Originally Posted by skubaman
So he told me I don't have to pay additional commission, it could be 0%, 0.5% or 1%, but that he would normally get 3.5%. We don't have an agreement on minimum commission and I never thought I would have to pay it
Its a greedy agent, who tried to extract more without an agreement...its shady, dishonest, and it should be condemned by all agents.
Personally it sounds to me like he got caught and now is saying it is optional.
Exactly. I think this is a really unethical practice and I think about how many other people might just go ahead a pay it when they really shouldn't. Usually agents on here are a bit too quick to advise people to report their agent, but in this case something more should be done then just not paying it.
In your hurry to protect the almighty commission you apparently missed the part where she said:
Its a greedy agent, who tried to extract more without an agreement...its shady, dishonest, and it should be condemned by all agents.
In your hurry to condemn m , you apparently missed the part where I expressed surprise that there is no signed document regarding commission. I would expect there to be a regulation mandating such a document, and guess that in this case there either is one that the OP is not recalling, or is supposed to be one that the agent forgot to have the OP sign.
Thanks all for the advices, it's very helpful. I will be removing the additional commission from escrow statement and won't pay for it.
Regards
Yeah! I was scared you'd be embarassed into paying. He really put you in a uncomfortable situation. I had a similar deal pulled on me, but on a smaller scale. The contract is all you need to follow and he knows that! Good luck and congrats on the new home.
Normally, the buyer doesn't pay the agents, the seller does. In other words, it's not your problem unless stated in the contract you signed.
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