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...but half of what she has given me i already attained on my own...
Well, then you got 50% more than you would have otherwise . Every buyer comes in with some knowledge (usually), it's the stuff you don't know about that may hurt you. Hopefully she would also provide value in crafting the offer, and following up on closing requirements or other issues that may arise in the escrow process.
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... I'm thinking of asking her to work for 1-1.5% commission, applying the difference to my closing costs, and if she says no, I have no contractual obligation to use her. ...
If rebates are legal in the state you are moving to, then that's a point of negotiation between you and her. If you decide not to use her, then she may have a procuring cause case with the listing agent. Not your problem, but she may get some commission anyway.
we're in the process of moving out of state, and are deciding whether or not to use a buying agent. we're looking in the $800k range, and may have found a perfect house on our first day out. its a very small community, with limited housing supply, and i've seen every house that has traded in the last 3 years. so while we'd usually take our time, this isn't a larger master planned community with hundreds of homes to choose from. anyhow, we have been working informally with a buyers agent, and may move forward with an offer this week. she has been helpful, but half of what she has given me i already attained on my own, I have enough analysis to make an offer without guidance, and in summary I'm a more educated buyer than most, so she has done nothing wrong, I just have done more work than most buyers. I don't want to overlook her, but don't feel she deserves a $24k commission for the few hours she has committed to me. I'm thinking of asking her to work for 1-1.5% commission, applying the difference to my closing costs, and if she says no, I have no contractual obligation to use her. so its $8k-12k for a days work, or nothing. anyone have an experience like this? I'm in commision only sales myself, believe in karma, and try to always do the right thing, which is why i'm not trying to do this without her, just want her commision rate to match her time/input.
Do you really want to start out in a small community like this? People talk.
we're in the process of moving out of state, and are deciding whether or not to use a buying agent. we're looking in the $800k range, and may have found a perfect house on our first day out. its a very small community, with limited housing supply, and i've seen every house that has traded in the last 3 years. so while we'd usually take our time, this isn't a larger master planned community with hundreds of homes to choose from. anyhow, we have been working informally with a buyers agent, and may move forward with an offer this week. she has been helpful, but half of what she has given me i already attained on my own, I have enough analysis to make an offer without guidance, and in summary I'm a more educated buyer than most, so she has done nothing wrong, I just have done more work than most buyers. I don't want to overlook her, but don't feel she deserves a $24k commission for the few hours she has committed to me. I'm thinking of asking her to work for 1-1.5% commission, applying the difference to my closing costs, and if she says no, I have no contractual obligation to use her. so its $8k-12k for a days work, or nothing. anyone have an experience like this? I'm in commision only sales myself, believe in karma, and try to always do the right thing, which is why i'm not trying to do this without her, just want her commision rate to match her time/input.
Do people ask you to give them part of your earnings?
Do people ask you to give them part of your earnings?
actually, yes, they do. I'm a commission only salesperson myself, and when I do a limited amount of work, I get a lower commission rate. not sure why that is a problem for people?
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Originally Posted by thereandbacktwotimes
Do you really want to start out in a small community like this? People talk.
the only opinions that matter are opinions from logical people. if they think 4 hours of work warrants a $24k commision, they aren't the people I want to know anyhow.
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Originally Posted by rjrcm
Well, then you got 50% more than you would have otherwise . Every buyer comes in with some knowledge (usually), it's the stuff you don't know about that may hurt you. Hopefully she would also provide value in crafting the offer, and following up on closing requirements or other issues that may arise in the escrow process.
and that is why she will earn $8-$12k for helping with those items.
I'm shocked I'm being attacked for this, so let me clarify a few things.
1) I was referred to her by a friend and have told her from the get go I was not sure if i was going to use a buyer's agent or not.
2) she offered to help and I let her know she was free to offer as much assistance as she wanted, but not to do so if she couldn't accept me not working wit her.
3) I've assured her if i talk to other buyers agents, I will notify her. as i mentioned above I'm in the same spot as her, commission only sales, and i find it to be common courtesy to let all parties know what is happening, whether or not you choose them for the service.
4) since my wife and I have done so much research in the area, and there is such a limited amount of supply, we don't feel we need a buyers agent, but if she is willing to work at a lower rate, that rate may align with the value she provides.
actually, yes, they do. I'm a commission only salesperson myself, and when I do a limited amount of work, I get a lower commission rate. not sure why that is a problem for people?
The amount that the buyers agent gets paid is determined by the seller and the sellers agent. The seller is the one paying that commission out of the proceeds of the sale of their home.
The commission is based on getting the home successfully sold.
It is not based on the amount of time spent by either the listing agent or the buyers agent.
The buyers agent gets paid the same amount whether s/he spends 2 hours finding a house for a buyer, or 200 hours. And there are many hours that the agent spends with clients who end up not buying. If you're going to attempt to base a Realtors pay on the basis of time, then you must give consideration to the time that they don't get paid for.
However, the real work and majority of the requisite skills comes into play after the house is identified.
Most buyers require the guidance, counsel, market knowledge, negotiation skills, real estate contract knowledge, real estate law knowledge, and skills in guiding them through the escrow process to keep them out of legal trouble and see that the escrow is closed successfully.
Buyers who have all that knowledge themselves don't need to use a Realtor. They can represent themselves, and negotiate with the listing agent on their own. Then they can ask the seller to adjust the price so they get part or all of the commission that a buyers agent would have gotten.
The fact is that most of those who want an agent to donate part of their pay to them do not have the knowledge and skills to negotiate on their on.
They are just being greedy by wanting a buyers agent to provide that counsel, skill and guidance for them, and at the same time use their hard earned pay to help the buyer pay for the home.
They don't understand the amount of work a Realtor does to bring a transaction to a successful close.
There are companies and agents around who will give part of their commission to buyers. However, they must also reduce their services in order to rely on volume to meet their expenses and make a profit.
Here's an example of how giving away 1/3 of the gross income causes the agent to have to increase the volume by 50% in order to have the same net.
Agents have a fairly high overhead expense including the splits to their brokers.
Below, this agent has an average home sale price of $150,000; is able to sell 15 homes per year; and her net income after expenses is $47,500. She works 45 hours per week.
$150,000..........Price of Average Sale
15.....................Number of sales for Desired Net Income
$2,225,000.......Gross Sale Amount
3% ...................Commission Percentage
$67,500...........Gross Commission Income
$20,000...........Marketing and Overhead Expense and broker fees
$47,500...........Net Profit
If that agent elects to adopt a commission rebate model, then she will need to increase her number of sales by (9) which is 60%, in order to have the same net profit. She will have to increase the marketing expenses in order to reach that new volume of 24 sales. In order to obtain and service 24 clients, a 60% increase, she will either have to work 72 hours a week, or reduce the amount of service by 27 hours per week in order to make the same amount of money working the same amount of hours.
$150,000..........Price of Average Sale
24.....................Number of sales for Desired Net Income
$3,600,000.......Gross Sale Amount
2% ...................Commission Percentage
$72,000...........Gross Commission Income
$25,000...........Marketing and Overhead Expense
$47,000...........Net Profit
If you want to work with a rebate Realtor then you should expect to have less guidance. Of course you may find a new hungry agent who will take you up on your offer.
I'm shocked I'm being attacked for this, so let me clarify a few things.
1) I was referred to her by a friend and have told her from the get go I was not sure if i was going to use a buyer's agent or not.
2) she offered to help and I let her know she was free to offer as much assistance as she wanted, but not to do so if she couldn't accept me not working wit her.
3) I've assured her if i talk to other buyers agents, I will notify her. as i mentioned above I'm in the same spot as her, commission only sales, and i find it to be common courtesy to let all parties know what is happening, whether or not you choose them for the service.
4) since my wife and I have done so much research in the area, and there is such a limited amount of supply, we don't feel we need a buyers agent, but if she is willing to work at a lower rate, that rate may align with the value she provides.
Why should you be shocked? You were using her.
The respectful thing to do is to interview several Realtors to see who you want to hire. It is not respectful to use them for information and later use the one who will give you part of their earnings.
Be honest with them, and lay it all out front. As you interview, the first thing should be to inform them that you want a discount. If they say yes, then interview further to see if they are right for you. If they say no, then move on, but don't waste their time.
You contacted an agent after someone referred her; so obviously you solicited her input. She didn't contact you, according to your statement above.
So you were getting free information from her and you state that you told her to offer as much assistance as she wanted but you may not work with her. I don't understand why she even continued talking to you if you made that statement.
And since you work on commission, I'm sure you would not allow others to take advantage of your time.
You were using her, and was apparently going to use her expertise and then dump her if she wouldn't lower her rate later. You don't say that in the beginning you also told her that if you used her it would have to be at a reduced commission.
There are so many people who will use Realtors time and end up not buying from them. Who pays for that time?
Not long ago I had a call from a person who wanted me to show him homes in this area. I asked if he was working with another agent. He said he is having several agents show him property. I respected his honesty, but I'm not going to work for free for someone who is also using other agents.
I told him that I would work with him; however, he had to sign my buyer/broker agreement and pay a non-refundable retainer of $1,000 which would be credited back to him at close of escrow if he purchases the house through me. He didn't want to accept that so we parted ways, and I was happy that he was honest and didn't waste my time.
Good luck to you. I hope you find what you're looking for.
she contacted me, a friend provided her with my information knowing i was looking for a realtor.
i told her day one we may or may not use her, and she took it upon herself to spend a few hours with us not knowing the outcome. thats on her not me.
ive spent 3 years on projects that would have paid $100k+ in commissions at the closing, and had the deal fall through at the last second for something beyond my control, so i know all about "working for free." sometimes we are overpaid, sometimes we are underpaid, but it always evens out.
bottom line, she wants to earn $24k for 3 hours of work with me, and I won't move forward under those conditions. and guess what? i have that right as a buying client with no contractual obligations. she invested her time without any firm commitment from me, to fault me for that and claim I "used her" is asinine. if I offer to mow your lawn for free, and you accept, did you use me? of course not.
ultimately, i have zero regrets. I was called by the realtor, i was forthright in explaining my situation, she provided what she was comfortable providing, and we will likely now part ways.
she contacted me, a friend provided her with my information knowing i was looking for a realtor.
i told her day one we may or may not use her, and she took it upon herself to spend a few hours with us not knowing the outcome. thats on her not me.
ive spent 3 years on projects that would have paid $100k+ in commissions at the closing, and had the deal fall through at the last second for something beyond my control, so i know all about "working for free." sometimes we are overpaid, sometimes we are underpaid, but it always evens out.
bottom line, she wants to earn $24k for 3 hours of work with me, and I won't move forward under those conditions. and guess what? i have that right as a buying client with no contractual obligations. she invested her time without any firm commitment from me, to fault me for that and claim I "used her" is asinine. if I offer to mow your lawn for free, and you accept, did you use me? of course not.
ultimately, i have zero regrets. I was called by the realtor, i was forthright in explaining my situation, she provided what she was comfortable providing, and we will likely now part ways.
Previously you stated that You were referred to Her by a friend.
Now you're saying that she called you.
It's more typical for people to give the friend the name of a Realtor they're referring, and to not give the Realtor the contact information of the friend, without the friends permission. So I believe your first statement.
Whether you want to admit it or not, you did use her.
And your mowing the lawn is a good analogy. If someone offered to cut my lawn, I would refuse their generosity, unless the offer was made because I was ill and cannot do it. Then I would owe that person a favor in return; and would repay it. When you accept something from someone, you owe something in return. I don't like taking advantage of people.
You may feel that because you didn't have a written contract that you have no obligation to her. However, you apparently did contact her and, at any rate, you did agree to her services in finding a house. However, from the statements you made, you were not upfront and honest with her. According to your statement below, you did not inform her up front that you wanted her to give you a 1-1.5% (one third to one half) of her earnings.
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I'm thinking of asking her to work for 1-1.5% commission, applying the difference to my closing costs, and if she says no, I have no contractual obligation to use her.
Had you been upfront and honest with her, then she would have had the opportunity to agree to work for you, or to decline. But you didn't give her that option. You mislead her.
However, do be careful, because Realtors do have some legal protection, and she may sue you. I don't know about your state, but in Arizona there is a Law of Agency. If a person acts as an agent, and the other person accepts those actions, then an Implied Agency is formed.
A court could declare that with that Implied Agency, and the work that she performed on your behalf, that you had a verbal work agreement with her, and if you buy that house through another agent, you may have to pay her full commission out of your pocket. Or since she has Procuring Cause, she can file a complaint with the Real Estate Commission and the other agent that you get to buy the house for you may have to pay her the full commission out of his pocket.Then that agent may sue you for misrepresentation for failing to inform him/her that you had worked with another agent in finding that house.
So if you think that finding a home is 1/3 of a Realtors job, and you're entitled to 1/3 to 1/2 of their pay, then you have no concept of what a Realtor does for you.
Obviously you weren't aware of Procuring Cause, and Laws of Agency; and there are many other things that you don't know about in the Real Estate industry. One of my favorite quotes is: "You don't know what you don't know."
I have absolutely nothing against someone wanting a rebate in exchange for a reduced service; or even asking for a rebate with full service, as long as it is done upfront, so the agent can accept or refuse before committing time.
To wait until you find a house and then disclose that you want a rebate, is dishonest in my honest opinion. Pun intended.
Again, I wish you good luck and hope you don't end up in court. I don't think there is anything more left to discuss.
Previously you stated that You were referred to Her by a friend.
Now you're saying that she called you.
It's more typical for people to give the friend the name of a Realtor they're referring, and to not give the Realtor the contact information of the friend, without the friends permission. So I believe your first statement.
wrong. a friend gave her my information, and told me she would call, and she did. I've never stating anything to the contrary, this is what happened, not sure why you are struggling to believe it.
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Originally Posted by Captain Bill
Whether you want to admit it or not, you did use her.
call it what you want, I explained what I was looking to do and she did the same, we both agreed to meet once without any contractual agreement.
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Originally Posted by Captain Bill
And your mowing the lawn is a good analogy. If someone offered to cut my lawn, I would refuse their generosity, unless the offer was made because I was ill and cannot do it. Then I would owe that person a favor in return; and would repay it. When you accept something from someone, you owe something in return. I don't like taking advantage of people.
she offered to help not as a favor, but to hopefully earn my business. there are no charities here, she gave me a preview of what she had to offer. no different than somebody mowing your lawn for free hoping you'll be so impressed you offer to pay them to come back. nice attempt at being the martyr, but quite a failure.
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Originally Posted by Captain Bill
You may feel that because you didn't have a written contract that you have no obligation to her. However, you apparently did contact her and, at any rate, you did agree to her services in finding a house.
again, she called me, and I never asked her to do anything she needed to be compensated for. she tried to earn my business, simple as that. it wasn't a favor, it wasn't with the assumption she would be paid, she was simply trying to land a client.
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Originally Posted by Captain Bill
However, from the statements you made, you were not upfront and honest with her. According to your statement below, you did not inform her up front that you wanted her to give you a 1-1.5% (one third to one half) of her earnings.
I informed her up front I wasn't sure I'd need a buying agent, we just didn't talk specific numbers until today. she was aware this was a discussion we'd be having.
Quote:
Originally Posted by Captain Bill
Had you been upfront and honest with her, then she would have had the opportunity to agree to work for you, or to decline. But you didn't give her that option. You mislead her.
another false assumption on your part, completely wrong
Quote:
Originally Posted by Captain Bill
However, do be careful, because Realtors do have some legal protection, and she may sue you. I don't know about your state, but in Arizona there is a Law of Agency. If a person acts as an agent, and the other person accepts those actions, then an Implied Agency is formed.
A court could declare that with that Implied Agency, and the work that she performed on your behalf, that you had a verbal work agreement with her, and if you buy that house through another agent, you may have to pay her full commission out of your pocket. Or since she has Procuring Cause, she can file a complaint with the Real Estate Commission and the other agent that you get to buy the house for you may have to pay her the full commission out of his pocket.Then that agent may sue you for misrepresentation for failing to inform him/her that you had worked with another agent in finding that house.
So if you think that finding a home is 1/3 of a Realtors job, and you're entitled to 1/3 to 1/2 of their pay, then you have no concept of what a Realtor does for you.
Obviously you weren't aware of Procuring Cause, and Laws of Agency; and there are many other things that you don't know about in the Real Estate industry. One of my favorite quotes is: "You don't know what you don't know."
nice scare tactic, but I reviewed all applicable laws prior to speaking to anyone. I'm well aware of the laws in the state we were in, and have plenty of emails that explain in great detail that we are by no means contractually bound to one another. and I have her responding in agreement.
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Originally Posted by Captain Bill
I have absolutely nothing against someone wanting a rebate in exchange for a reduced service; or even asking for a rebate with full service, as long as it is done upfront, so the agent can accept or refuse before committing time.
To wait until you find a house and then disclose that you want a rebate, is dishonest in my honest opinion. Pun intended.
Again, I wish you good luck and hope you don't end up in court. I don't think there is anything more left to discuss.
while I can appreciate you standing by a peer of the same profession, you seem to have completely taken the side of the realtor due to the simple fact that she is a realtor. I've told you many times that there was no bait and switch, she knew what I wanted to do from the beginning, and ultimately, we have only spent 2 hours together!
a little common sense would probably lead one to appreciate me being honest with her. even though we have spent little time together, I wanted to make things more formal and that is why I made the call today to discuss the commission rate. I didn't talk to any other buying agents, I didn't contact the seller or selling agent directly, and I didn't wait until we started the negotiation process to bring it up. I have been forthright, honest, and respectful the entire time. Your whole argument stems from the false premise that I mislead her, which is completely false.
thanks for contributing absolutely nothing of value to my post. I'm sure the market is a dog in AZ for you (i have property there so i know the pain), but that doesn't give you the right to be the real estate police making false assumptions and attacking the integrity of people like me on this site. I have facts to support my position, you have assumptions, being the legal expert you think you are, try to keep that in mind.
I'm done.
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. Every buyer comes in with some knowledge (usually), it's the stuff you don't know about that may hurt you. Hopefully she would also provide value in crafting the offer, and following up on closing requirements or other issues that may arise in the escrow process.
