Posted on 02/19/2010 7:43:46 AM PST by TSgt
My wife and I have been looking for land for several years. We are very independent buyers and never established a formal relationship with a realtor since we didn't want to waste their time and didn't want to be hassled. We did keep in contact with a local realtor we had in mind to represent us should we decide to make an offer.
Recently we found a property we liked and walked it with the seller's realtor. We decided to make an offer and then entered into a formal, legal, relationship, i.e. retained, with our local realtor. We made an offer and the seller accepted however the seller's realtor refuses to split the commission with our realtor. He feels that he is owed the entire commission because he walked the property with us even though he would have had to anyway. At the time we walked the land we informed him that we had not formally retained a realtor, which was true, however we had no intention of being represented by the seller's realtor for obvious reasons.
Our realtor is telling us not to worry about it and that she will simply not be paid for this transaction. My wife and I do not find this acceptable and believe that she should be paid for her work. Should we push the issue about splitting the commission or pay her half out of pocket? I would rather not spend another several thousand dollars but I believe people should be paid for the work they do and she has done a great job.
She works for a major national realtor. Is it unethical to pay her directly and how much would she be paid after her company takes their share?
By the way, if I was the seller’s broker I would be suspicious that this agent you’ve brought into the picture is a friend or relative being used as a straw-man to effectively reduce the price of the property to you by 3% (or whatever half the commission was).
Then she deserves a cut, IMO. We’ve been in real estate negotiations where the cut was split 40/60 or 30/70, but both realtors always got something.
What are my options then to ensure she gets a cut?
The local realtor board tells me I should let the deal go through and let them fight it out afterwords. I want to do something now as the buyer.
Can I threaten to back out of the deal?
The seller’s apparently had a contract with the Realtor who actually showed the property and handled the buyers negotiations. Then the buyer introduces their Realtor into the picture. In most states this case is clear....whoever show’s the property and subsequently gets the contracts signed has fulfilled their contract obligations in total and is entitled to the commission.
If I have it right, the LA only did the initial showing. Once you decided to write an offer, you hired your Realtor as the buyer's agent, correct?
Did your buyer's agent have you sign a buyer-broker agreement?
Sounds to me like your buyer's agent is due a commission as stipulated in the MLS listing. She needs to brief her managing broker and let him/her hash it out with the counterpart at the listing agency. Usually, they can settle the matter at their level so it doesn't have to elevate to the Realtors' Association.
The amount she receives after her brokerage takes its share hinges agreed splits. In most cases for new Realtors, it's 50-55% here in VA; it'll index upward in favor of the agent, if her sales volume rises between specific thresholds.
Good luck; hope that helps.
I am a realtor.
Based on your description the sellers agent gets the whole commission. If you met with the sellers agent to walk the land and stated that you were working with another agent then YOUR agent would stand to get some of the commission.
At an open house we get 2 types of customers. Walk-ins (all mine) and people sent by agents who clearly state that they are working with agent so and so. Without that clear notification before touring the house the open house visitor is all mine even if they show up with an offer from another agent.
I would suggest a $100 gift certificate to a local restaurant for your agent. I am sure they have been on both sides of this issue before.
What kind of business relationship do you have with your Realtor? Does your Realtor represent you as 'Buyer's Agent'? If so, sign a Consumer Information Statement.
Now if the subject property is an 'Office Exclusive,' your Realtor may be out of luck regarding a commission. May I suggest negotiating a 'referral fee' in any case?
Our realtor formally and legally represents us as a buyer’s agent. We signed all the legal paperwork before we submitted an offer.
Is a cash gift or payment for her services unethical?
Then she is/was acting as “your agent” and should get part of the fee.
“He feels that he is owed the entire commission because he walked the property with us”
If the seller’s broker walked the property with you, and you made an oral offer to him (not enforceable in most states), and you offered to pay the “sticker price”, or there were some negotiations, then the seller’s broker told you you had a deal BEFORE you hired the broker, and in fact that ended up BEING the deal, and your broker just memorialized it, and after that the sellers signed right off on it — no further bargaining back and forth, no further inspections, no financing contingencies, no other contingencies, no hitches, no loose strings, so your broker hardly lifted a finger, then I would say the seller’s broker is BORDERLINE justified in taking the whole commission.
But according to you, that’s not the reason the seller’s broker is giving for wanting the whole commission. The reason is because he “walked the land”.
In the grand scheme of a real estate transaction, “walking the land” is squat. Nada. Bupkus.
Remember the movie Glengarry Glenross — Coffee is for CLOSERS only. CLOSING the deal is what it is all about.
Walking the land ain’t CLOSING the deal. If you retained your broker BEFORE you made the offer, and had your broker write up the offer, on a form or by hand, and you made the offer THROUGH the broker, then your broker is in the transaction as much as the seller’s broker is.
Your broker is also ON THE LINE legally if something should go wrong that implicates her. Less likely for a broker representing a buyer than one representing a seller, but not zero. Does the seller’s broker REALLY think that your broker is going to put her license on the line for free?
If the seller’s broker is really using “walking the property” as the excuse for hogging the commission, then your broker is being punked, and word is going to get out in the broker community that she can be punked.
What I don’t understand is why the OFFER did not provide protection for the Broker. Here in California there are a couple of different Realtors’ associations — state and some local ones — that issue standard forms, and IIRC, the purchase “offer” which is basically the sale and purchase contract, includes a part which spells out how much commission the buyer’s broker will get. It’s part of the deal. It’s negotiable, but if it is not ironed out, then the deal is not CLOSED. And CLOSING is what it is all about.
I think the realtor who wrote and presented a contract is the procuring cause of the sale. The listing agent is being greedy. The selling agent’s broker should make sure the listing agent’s broker, the seller, and the closing agent are all aware of the dispute.
In the offer or paperwork, it didn’t spell out what each realtor would get? You could try threatening to back out, but you don’t want to be in breach of a contract. Was there some sort of contingency in the contract that would allow you to back out?
I’m no realtor, but the idea of letting them “fight it out” seems rather archaic, when it comes to real estate contracts and/or law.
All negotiations were handled by our realtor. The only thing the seller’s realtor did was walk the land and try to point out the survey marks though he did a poor job. We did not discuss anything with the seller’s realtor other than, “look, that’s a cool rock wall.” When we decided we wanted to make an offer we contacted our realtor, signed a legal retainer and then had her write up the offer.
Good.
Was the subject property an MLS listed property? Or was it an "Office Exclusive"?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.