I think #1closer is one or two of the same people that were copying and pasting the same answers on message boards before.

I've noticed that #1 Closer has to have one of the most negative attitudes on Trulia. "No one needs a Realtor at all". Plus #1's other 54 negative posts. Too bad #1 Closer has such a negative attitude toward life and thinks that all REALTOR are useless. #1 probably thinks all attorneys, accountants, judges, doctors and hospitals are useless too.

Bruce, in AZ it might be different fro TX but in general here is what you could do:

1) Explain agency and whom works for who.
2) Explain dual agency (if allowed in TX) and the advantages / disadvantages of dual agency
3) Also in AZ the only person who can get paid (i.e. the 3% stated above) is a licensed real estate broker. You could ask the buyer, are you a licensed TX real estate broker?
4) Show the buyer how you determined price and explain how taxes work in TX.

I hope this helps.

Dan! you had me going there on your first few sentences! I do see your point, though. I do disagree with some of the advice given. I would not tell a buyer that is interested in one of my listings to go find a buyers agent to represent them after they come in without one and tell me that they do not want to use one. There are SO many reasons why I wouldn't do that that I don't have time to get into it but the least of the reasons would be so I could hog all the commission. There is cause, representation, duty and a whole list of reasons but mostly, why would I want them to go find an agent that would want to bring them out and sell them something else besides my clients house??

Once again Charlene, you quite eloquently put into words how important, and necessary the knowledge and expertise is on both sides of a very complicated and expensive tranaction for two parties that are dealing with what could possibly be the most important transactions of their lives and then when mentioning the market mess you finish off with "He buddy, I'm just a simple real estate broker". My POINT exactly!!!

God Bless ya, Bruce. Did you have any idea the size of the can of worms you were opening?

glad to hear your buyer decided to seek representation. Best solution. I'm sure that was due to your wise cousel, despite the arrogant and aggressive beginning. sounds like your buyer might have a brain after all.

I was going to suggest that you tell that buyer, "I represent the seller, and I'm good at my job...please know that. Any negotiations that come to me, will be on his behalf. The law demands I be good on his behalf. So, unless you're a good negotiator, and know the real estate business as deeply as I do, I strongly suggest for your own well-being, that you get a buyer's agent for yourself who can compete with me.

"You've asked me to give you 3% of the commission, which is half, and which also represents half of the work. See, my seller has agreed to pay ME 6% of the contract price, and I, in turn, agree to pay a buyer's agent half of that, primarily because they will, by closing, have done about half the work. If YOU do half the work, I'll be happy to suggest to my sellers that we give that 3% to you in the form of closing costs, or drop the price by 3%. Know that this can only be accomplished within the contract, because since you are unlicensed, I can't pay you anything. That's the law.

"However, since you are asking me about how to write the offer, I suspect that you do not possess the knowledge and experience to write the offer, nor do you know how to do all the work that must be done prior to writing the offer, or how to do what must be done to protect yourself after the offer is accepted. And we all know -- at least those of us who are familiar with the process and potential problems, who have the education and experience to look for and mitigate these pitfalls--how to proceed with some surety, I'm deeply concerned for your well-being in this process. after all, I'm bound by ethics and law to represent MY client, the seller. And while I must disclose any material facts, there are some things I'm unable to disclose due to them not being material facts.

"Now, back to your request, and to my advice: please call a buyer's agent and ask them if they will represent you for free, because that is what you are asking of me. I'll be happy to have my sellers drop the price by 3% since we won't have to pay a buyer's agent, given that you or your agent will do your half of that, work about 100 hours for no compensation.."

Yikes. Is there any other profession where customers think it's okay to ask for half your pay? Advise these people to call a real estate attorney, because they obviously, really need one, and ask THEM to work for free. there are a lot of good real estate attorneys out there, but they don't work for commission, they charge $100, or $300 per hour. We're much cheaper and we are better informed of the pre-closing issues.

One final thing, to Dan, as to culpability in the market crash. I just don't get this. do you just want someone to blame? Dan seems to think that we are investment brokers, market analysts or ouiji board afficianados. I am simply a real estate broker who expertly facilitates those transactions. Nothing more, nothing less. I don't ever, have never, talked people into a sale. I have talked a few out of one. I think that we are just an easy, first line mark, and sitting ducks for those who want to vent their anger about market conditions. I understand; I'm po'ed too.I've lost too. But that's another thread.

looks like you will cross that line on ethics if you don't run, not walk, far away quickly

For the do-it-yourselfers reading this....go do a search on Fred in Lubbock and see the mess he's gotten himself into. Tread lightly when you're not sure of the support.

Many people think that there is no such a thing as a "win-win" situation. Though the phrase has been overused to a point of cliche', the idea of "win-win" was promulgated in response to the opposite tenet "Every economic transaction is a zero-sum game" i.e.,: When you lose, I win. and vice versa.

The consumer who made the kickback proposal and others who applaud him are adherents to the zero sum game theory, a least when it comes to real estate agents.

I have found that the strongest believers in the zero sum theory are also the least enjoyable, and most damaging financially to work for. They are quite often willing to blow up an agreed upon deal on the gamble that they can squeeze another dollar out of the seller, or agents, or service providers or everybody and anybody else in the deal..

Bruce's "buyer" was not likely to stop at the 1st 3 percent. He'd have tried to chip away the whole thing.
-"If you give a mouse a cookie, he'll ask for a glass of milk"

The zero sum zealot thrives on schadenfreude. They live by the motto: "It is not enough that I win...and the other guy has to lose... the other guy has to be humiliated, too"

Yea, Bruce...the next time you open up a can of worms you better butt in a little more often!

I've got band-aids all over me!

WOW what interesting spin this has taken. I'm not here to cheat anyone out of anything and to facilitate a transaction. Get the house sold for the seller, help the buyer get a house they want, earn a fair profit for myself and for my broker. I've worked it out, but now surprised how simple everyone thinks these transactions are. The know it all do it yourselfers on here are nuts. Yea, the may get lucky now and then and save a little bit of money without us, but I see these guys get taken to the cleaners almost every single day and they never even know it. I always think it is funny when I recommend tried and true lenders who always have the lowest fees and interest rates and close even the wierdest of transactions on time and the buyer refuses to even talk to them as they're getting the "brother law deal". Ever one of these seems to be more outlandish as to what the brother law clears on the "deal". '
In this case the buyer has decided to get representation.
Believe me they needed it. They are absolutely smart people, but they'll save money, time, and many headaches by having representation. Probably much more than the 3% they thought they might save if they did everything themselves.
In this case they weren't saving themeselves or the seller 3% by representing themselves, that fee was already set.

leveraged, I think your comment represents a common misconception. 'take all 6%' and 'leave them high and dry when the value goes down', doesn't make sense. Yes, the seller is paying the agent a commission. could be 6%, could be whatever. But the buyer is not his client so he is not leaving them 'high and dry' when the value goes down because he is NOT their agent . It's his job to get get the best offer for his seller! When the buyer comes in and doesn't have an agent and the listing agent represents only the seller, the listing agent owes NO responsiblity to that buyer as far as whether or not he is getting a good deal. It doesn't make that listing agent a scoundrel, it makes that listing agent a true representative of his client. Say you have a house and list it with an agent (yea, yea, I know..you'd never hire one)...anyhow, say you do. The agent is holding an open house and a buyer comes in and says, I don't want/have an agent and I want to buy this house and offer $200,000 for it. Well, the listing agent knows that the seller was really only hoping to get $190,000. What do you think the agent is supposed to say? 'No, no, you don't want to spend that much, it may only be worth $192 next year. Just offer him $190, he'll take it'. Of course you wouldn't want that to happen, you hired that agent to sell your house and you'd be ranting on the other end of that ever happened. It's not that listing agents responsibility to keep that buyer in budget, nor is part of his fiduciary responsibility to his client. It's a buyer's agent job to review comparibles with the buyer.

Bruce: Just grab all you can. Take all 6% from these people and them leave high and dry when the home value goes down. No one would expect anything different.

Ok, I've got to jump in AGAIN! Lori is so right on about this, and I'm totally lost on 110% LTV's comments. I'm not sure how anyone is cheating the seller out of 6% or even the buyer at this point. The whole point of Bruce's post was to ask how far he should go in helping the buyer who had no representation, BECAUSE not only was the Buyer asking Bruce to work for free, but he was also asking Bruce to pay him (the buyer) 3%. If any of you want to come clean out my garage and pay me for doing it, just let me know. It's definitely a win-win for me!! As far as the commission, those terms are set up front during the listing presentation and the seller can say "no" or "yes", or can negotiate the terms. Plain and simple.

I do want to touch on Dan's subject of accoountability. Dan you are right on when you say that Agents/Realtors should own some of this mess we are in. I absolutely agree. There are some agents, and agents that are Realtors that see nothing but dollar signs. Lori is correct when she says that there is (supposed to be) a difference between Agents and Realtors. That difference is our Code of Ethics. However, (and I'm sure I'm going to get hit over the head for this one), I think it's pretty sad when RE Agents must have a Code of Ethics or take Ethics classes to be ethical. I don't know about the rest of my associates, but I didn't have to take the classes or join the NAR to be ethical. I was taught ethics at an early age. I am a REALTOR simply because the public understands there is supposed to be a difference. I must also say some of this mess is also partially due to the buyers themselves. Everyone wants to live in something they can't afford. So yes there are a ton of people who need to own up to this housing mess we are in, including the homeowners. You can not imagine the amount of people that I must bring down to earth on the price of homes and how it fit's into their budget. It is so refreshing to have clients that say, "I can spend this amount of money for a house payment, how much house can I afford?" Wow, I love buyers like that. So to end this VERY LONG rant, there are Realtors/Agents that do try their very best to get the best deals for their clients. I have had this talk many times with my clients. A home should be filled with love and happiness, not financial stress. I don't want my clients coming back 3 years from now, asking me why I sold them a house they can't pay for. So Dan, we aren't all alike.

None of us can guarantee that every associate is good at thier job but the "housing crisis" is part of a bigger picture and to say that home prices should not fluctuate is unrealistic. The price of everything goes up and down. Where I am gas has gone from $1.50 to $4.10 back to $1.50 a gallon all in 1 year. A general good definition of value is what a willing buyer will pay and a willing seller will accept and that changes with every buyer and every seller and every different situation. I pride myself on my service and work hard to make my buyers understand what they are getting into but our customers are grown people and they sometimes make bad decisions. So by the way do associates and many of them are taking responsibility for it right now by sitting in jail--as they should be!!! I know of no other profession where we can work for 6 months and still not get paid I earn every dollar I bring home and have a right to say no I will not take a pay cut. In the regular (non independant contractor) job I have never heard of an employee saying to their supervisors you are so nice I think I will work this week and you do not have to pay me. They deserve their pay and so do I!

I get it and I feel for all those people who lost so much. We have over 20 combined siblings, don't you think that we have immediate family in the same boat? I don't think that any non-agents were busy posting on any website about how great we were when sellers were gaining great equity for all those years. Most of the remarks are personal jabs at our integrity that are done by taking something that is posted out of content. It's a method of bashing that is, unfortunately, universal from politics to PTA. With typed word, you can't put a smiley face at the end of the sentence to avoid being taken to negatively - it's too distracting.

There are likely many peopel that entered into a transaction with parties that cared more about the $$ than the client's dispostion but there were also a lot of buyers that I had to personally talk 'down to earth' about what they bought. The nature of Bruces comment was about misguided views regarding representation and client vs ministerial duties. Most of us got that. Start throwing around phrases like 'step promotion' and 'dress mess' and your find 20 posters accusing of you all kinds of things.

Have a great day and confidence knowing that what you do each day helps others. I'm sure that what you do does just that - and I'm sure that what I do does, also.

So not only are the Realtors saying they should cheat the seller guy out of the whole 6%, but that they are going to try to dupe the buyer too. Unreal. Why do we even need Realtors any more?

Lori,
I personally don't have anythign against agents, REALTORS or otherwise. I have bought and sold and always used one and never had a problem. Of course, that was 4 and 8 years ago respectively. You know the good ole' days when you paid for 2.5 to 3 X your annual income and could get a modest home that fit your family's needs? "But something happened on the way to work" oh....about 4 years ago.
Now this is my "gripe" and where I'll end this "rant". Ask the agents on here and they will tell you that going homebuying or selling is like going to court without a lawyer or letting someone from WalMart do brain surgery yet not a single one that I know of has EVER claimed any amount of responsibility (if they even admit there's a problem at all..."housing crisis, what housing crisis?") for the housing mess this country is in. Now either you are an important, integral part of the process and therefore own some culpability or you're obsolete. You can't have it both ways. And I think that real estate agents's lack of addressing this issue could be the reason there is such animosity. Especially from the buyer's point of view. Think about it. We just watched our brothers, cousins, friends, and parents lose 30% of home value in 2 years Did that buyer's agent really work hard to get them the best price possible and look out for their family's best interest during that transaction?

Guys! That is not at all what any of us meant and that is not at ALL how the listing compensation is worked out. The listing contract is set up with the seller up front and the terms and commission under the various circumstances is also set up. The seller and the agent already know what will be paid in each circumstance and the listing agent will not and can not turn away any buyer. A tiny minority of sales are actually made without a buyer's agent on the other end and we most of us don't even consider that a likely scenario. We don't need to go back to our seller or 'commander' and tell them that we want more money because the compensation is already set. When the house is listed, the commission is arranged. We don't go back and ask for more commission because there is another agent on the buyer side. We already have an agreement and whatever commission is advertised in the listing is what we have to pay the other agent. The scene you talked about regarding your pay is in reverse. Imagine someone calling you into their office and saying 'you know, the job you just worked on for 4 months, spent a few thousand on and completed was great but we've incurred some costs that we need to mitigate in another area and we're only going to pay you 1/2 of what we agreed. Sorry about that.

Either there is simply a distaste for people in the business of real estate and you are purposely giving a spin or you are just misunderstanding the meaning of the initial question. It's totally understandable, either way. Also, a Realtor is not the same thing as an real estate agent. You can read through the code of ethics to learn more.

I can not belie these REALTORS either want to cheat the guy out of 3% or not sell this house. Unreal.

Well, I understand where you guys are coming from. But as buyers and even as sellers, we didn't invent the real estate agent's pay system so all of this "you don't expect to work for free do you?" is a little condescending. I don't live and die by the commission so no I couldn't see me walking into my commander's office telling him "you know sir, that project you put me on this week required a little bit more effort to complete so I'd appreciate it if you'd drop a little bit more compensation in my check this month. If you have a problem with this than you can send the next project to the next guy, I'm just not putting forth the effort next time. My self-worth is a little bloated this week." I think he would probably show me the door. Which is what I'd expect the seller to do if Bruce walked up to them and said "you know I did have a buyer interested in your home, and although the market is trashed and you've been sititng on the market for 9 months, I decided to tell him to go "pound sand" because there just wasn't another agent on the other side to pick up that extra 3% you need to fork out to get the deal done and you know I'm just not going to work his end just to get YOUR house sold. Sorry Buddy" .

Dan,

Unfortunately, if you decide to "represent yourself" and try to capture commission to reduce your costs, you are not really representing yourself (at least not in Grand Rapids, MI where I work).

On those occasions where somebody has wanted to do this, the board still holds me accountable for the "unrepresented buyer". This means that I still incur risk from whatever actions you take, or do not take.

Since I am forced, I suppose, to take that risk, you better believe that I am earning that commission.

You get that "know it all" buyer who thinks that they can do it on their own, who promptly blames me when HIS mess ups cause the deal to go poorly. No Thank You.

If buyers knew how to do this properly, they would be Realtors too!

I don't think that the listing agent has a problem with the buyer trying to negotiate or use his own skills. A listing agent should be ok with doing ministerial work - especially if it results in a sale for the seller. I think Bruce's issue begins with the second half of his post in that the buyer then forgets that you are working for the seller and wants assitance negotiating against your seller. We have ot keep reminding the seller that we work for (and we really do) the seller. Dan, you may not feel like it would happen in a deal you are in and maybe that is true. However, it happens all the time. I invite you to give real estate a try and work full time at it for 6 months then it may be a little more understandable. I don't mean this in a cynical way and I'm trying trying to be a smart alik about it. I'm thinking that some posters think that we simply pose for a photo every once in a while, do an open house once a month and cash in the big bucks. If you are seeing any defensiveness its because there is a lot of presuming about what our job actually involves. You are definately entitled to your opinion and you certainly have the right to buy and sell without the assistance of an agent. Some people do it on their own and that's fine. It's like any other professional service. Only those who need it appreciate the value.

Dan,

I don't think the issue is so much with the 3% going to the buyer, but it's with the buyer requesting the listing agent to take care of the buyer's side of it as well. If the buyer wants the 3%, then he should be able to do what a Buyer's Agent would do and not expect the Listing Agent to do it for free. I'm sure that you wouldn't like it if you worked for free. You and us (agents) are paid for what we know and what we know how to do.

Yes Lori,
And from listening to most RE agents on this site the buyer NEVER pays for an agent's commission. We are told all the time it is FREE to us. So why shouldn't a buyer assume that the listing agent has already put that other 3% into the contract? Therefore if there isn't a buyer's agent to pay why should the listing agent "pocket" the other 3% that we are told is already in the pot?
This is the kind of thing that agents bring on to themselves when they tell buyers "don't worry you don't pay a thing for an agent." And then when a buyer tries to use his own negotiating skills he's called every name in the book. Just another sign of the animosity agents seem to have towards buyers these days. I'll never understand it.

Marty,

You are almost never smart to go it alone. If you need help with the law, you get a lawyer....with medicine, you get a doctor....Accounting, get a CPA....Real Estate, Realtor or Real Estate Attorney.

I am not sure what you do for a living, but I hope that the people you serve respect you enough to pay you a salary when you do work for them. I am always amazed that people think Realtors should work for free or that what we do has no value.

The fact that this guy has to ask for the kind of help that he is asking for shows the lack of skill and education he has to get the job done on his own.

With regards to the situation I referenced in my earlier post, without going into the long technical details, The person I dealt with who thought he was better off without a Realtor got burned for $3600 because he didn't know what he was doing.

Live and Learn.....and try to remember that the work we do has value, just like yours.

He's not saying that the buyer is going to pay him anything, the buyer doesn't pay the agent in this scenario. In this case, the buyer thinks that the seller's agent is going to credit him part of his commission since there is no other agent to pay. What the buyer doesn't know is that there is a listing agreement between the seller and his agent that outlines exactly what the commission is that is executed well before that buyer walked in the door.

Why should this buyer pay you a cent? Are you not going to help your seller? He is smart to go it on his own.

Well, since the buyer doesn't have any idea of what your contract with your seller says about these situations, I'd say tell him you represent the seller and would be happy to write up any offer. I'm sure he's gotten all kind of advice from his friends and can tap them for info. He probably just scored a 6.5% loan rate and only had to pay 2 points.

Yeah, typical response from somebody who doesn't respect the profession.

I just had a similar situation......as usual, the buyer outsmarted himself and got burned!

The buyer is entitled to 0% of the commission. If he isn't smart enough to get a Realtor, then he gets what he deserves.

Tell him to submit an offer and you will get it to the seller for a response. Your sole responsibility is to your seller, not this cheapskate, Yahoo who wants a free ride in life.

Sounds like a very smart buyer to me. He has saved himself 3% just by asking. More people should do this.

In my area commission is set between seller and broker through the associate (most companys have a minimum % as a company policy)and is paid to the listing broker with whatever part of it offered in the mls to the associate that brings the buyer. Always in my company any changes to that have to be approved by the broker the associate can not just decide to cut the rate the compnay charges. It does not sound illegal just presunptuous and rude. As to pricing if I were working with a buyer I always give them comps it is public record I do not see the problem sounds like they want you to provide full service for both parties and recieve half pay have lots of fun with this transaction!!!

Bruce,

I think you have to separate what you would typically do for another Realtor as opposed to what you would expect them to do. IE: if another Realtor asked me how I determined the price (possibly they couldn't find comps), I would gladly provide those comps to that Realtor. It's my job to protect the seller and show the other Realtor what's it worth. Above and beyond that, it's negotiable. Maybe you could negotiate a flat fee for your services, and specify what those services would be. If they want the full package, it's 3%. If they plan on handling the majority of things themselves, maybe it's 1%. Either way, you want to make sure that you protect your client. Remember, 3% of something, is a lot better than 6% of nothing and as a added bonus, a happy seller. Just my 2 cents! Good luck!

Jackie

When I have buyers who do not want representation, but want advice I go over the agency documents and explain what they get for their 3%. I believe the list as 115 items. It is similar to telling an attorney I don't need you in court, but I want you to do all the "legal stuff" to get ready for court.