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?
First and foremost, laws vary from state to state and usually these issues should be decided by your local board of Realtors through arbitration between both agents, assuming they are members of a board. The buyers and sellers should never be involved in commission disputes. I am a Realtor and had this identical event happen to me as a listing agent of a property. I received a call from buyers wanting to look at a home I had listed. They insisted on seeing the property that day and I made arrangements to accomodate them. In my state, Ohio, there are agency disclosures that are necessary to have signed by buyers at the time of the showing which did transpire. I asked them if they were working with another Realtor and they advised me that they had called another Realtor on several occasions to get information on other properties but they did not call him on this property. They further said they would use him only to list their current home. They then said they wanted to make an offer on my listing. I had another appointment and asked if we could meet that evening at my office to go over the offer. That was fine with them. About 15 minutes before the scheduled appointment time, I received a call from the other Realtor, saying he would be writing the offer and presenting it to me. I had to proceed because a Realtors only goal should be to represent their clients and culminate the sale regardless of commission issues and events. However, after the property closed I filed a complaint with my local board asking for arbitration on this matter. I prevailed because I was the procurring cause of this sale and the other agent had to reimburse me the commission. Ask yourself, who was the procurring cause of your interest in this property? Who used their time to show you the property and who gave you the information you needed to move forward? Is it fair that an agent uses their time, fuel, and expertise to show you a property while another one sits in their office waiting to see if you are interested and then get a commission?
Yes, all that matters as procuring cause is who wrote up the contract, and the stated business relationship as a representative of the Buyer (Mike.)
The only issue I see is whether the subject property was an "Office Exclusive" and not an MLS listed property, and thus not subject to cooperation.
Office exclusives are pretty rare in areas served by a MLS. The only way a Board of Realtors member can avoid submitting a listing to the MLS is at the specific written direction of the seller.
One can represent and be an acting agent and still not have a right to a commission. Commissions between brokers are seperate issues from purchase agreements.
Ping.
Come back and tell us how it played out, Mike.
It depends on three things.
1. Are both realtors a member of the same MLS and Board of Realtors? ( Some boards have binding arbartration.
2. It is my opinion after 30 years in the business that if you do not have a contract with the buyer, it is who writes the offer that wins. (Buyer broker stuff) look it up. But it depends on the laws of your state.
3. Just because you show a property doesn’t mean you get both sides of a comission. Been there and done that. Licensed since 1974
His own agent told him not to worry about it and that she wouldn’t get paid for this transaction. So, it seems to me either she doesn’t think she deserves the commission, doesn’t KNOW she deserves the commission, or plans to fight it out later. Hopefully she knows what she is doing. At any rate, I wouldn’t think it’s up to the buyer to get involved in that dispute unless he somehow can be held personally responsible for paying her for the work she did do on his behalf.
Not true in Michigan. We have a buyer broker contract where the realtor can represent the buyer. Seller pays the comission though.
True, Office Exclusives are rare - esp in a bad market - but possible. That's why I've asked.
You're right - the Seller would indeed have had to have signed an OE listing agreement with his Broker.
But nothing I have said precludes the buyer from paying their agent’s commission. If the buyer sincerely feels his agent was wronged he has every right to put his money where his feelings are.
I'm familiar with this type of situation.
The agent is a professional who realizes her customer comes first and doesn't have to be privy to the catfight behind the scene and how/when the dispute is resolved. Even before this goes to litigation, a referral fee will probably be worked out at the least, IMO.
“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 only know California, where, to my knowledge, there is no law in the State of California requiring the seller’s broker to share ANY of the commission. It is a matter of custom and private contract. It is also a matter of “getting along by going along”. Splitting commissions primes the pump and keeps the market humming. Of course every seller’s broker (they actually call them “listing” brokers in the Bay Area) hopes to represent BOTH sides of the transaction. This is legal in California, which is good for brokers until they screw up, then it’s good for lawyers.
The way you describe things, I would think that if I am a broker, and I am approached my someone who says “I looked at a house, and now I want to hire you to make an offer”, and I know that the seller’s broker is not going to share the commission, I’d tell them “Sure, I’ll represent you, but not to buy THAT house, because I would be working for you for free. I’ll help you buy another house — one you haven’t “poisoned” already.”
And if the buyer said “No, I only want you to represent me for THAT house”, I’d tell them — find another broker - a stupid broker — if you can.
Yep, same here in Pennsylvania.
Unless you have entered into a buyer-broker agreement with a realtor to reperesent you
Then, your buyer's agent should get the commission. Recommend she gets her broker involved. They'll work it out.
It was listed on a MLS site.
When I bought my first (only) house, I used a friend who is a licensed broker (actually broker, not salesperson working under a broker — there are two kinds of licenses in CA),
She got half the commission, and kicked it all back to me —all fully disclosed. We know it’s legal because someone tried it before me, it went all the way to the Cal. Supreme Court, and they ruled if you disclose it, you can do it.
Sometimes a buyer will find a property and then bring in the real estate agent sister-in-law to “split the commission”. The sister-in-law then hands that 3% back to the buyer in exchange for a nice dinner. Happens all the time. Even on a measley $200,000 sale, that’s six grand. Nothing to sniff at.
I have a feeling this may be what happened here. Why else would the buyer be more concerned about the commission than the real estate agent who is allegedly getting hosed?
It was and still is listed on a Kentucky MLS site.
Neither realtor found it or presented it to us, we found it on the site.
That’s funny... check out my post 4 seconds after yours.
Mike, your agent is due a full commission. Don't sweat it, cuz she won't.
Congrats on your purchase.
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