Home Buying in Los Angeles>Question Details

Samal, Home Buyer in Los Angeles, CA

Advise on changing buyer realtor

Asked by Samal, Los Angeles, CA Sun Jun 10, 2012

We have been working with a realtor for over a year to buy a house. Inspite of giving the realtor a fair chance (we put in 4 bids, clarified our budget etc), nothing has worked out for us. Certain advise we received from him (waiving appraisal contingency on an overprices house, preference over his mortgage contact over credit union even if its a little more expensive etc) was not what we felt was right for our famil we decided to change realtors. We did not feel we were getting the right advise, negotiations skill or guidance needed to get a house quickly and its been 1 year of looking already. The old realtor now contacted us and wants us to ask any new realtor we sign up to give him 25% of the commission in leui of his efforts spent (on failed past bids). I do not think this is fair to any new realtor since we are changing relator for professional reasons and it was a performace based agreement where we did not get success.

Wanted to get views here if we are doing the right thing

Help the community by answering this question:

Answers

14
Short answer - no the new agent owes nothing to the agent you fired. Additional 2 cents - please be fair. Maybe your agent is as much the victim of the market place as you. Maybe if you'd taken his advise you'd have a home by now. Maybe not. Just be willing to be objective before blaming others.
2 votes Thank Flag Link Sun Jun 10, 2012
Did you have a buyer representation agreement? If so, you need to honor the contract or risk being in breach. Have the new agent review it for you.

It is a tough market but if you had a completely unrealistic budget to your requirements than the agent should have fired you earlier than a year into it.

My own advice - don't been penny wise, pound foolish. If you find a right house for your living situation than make an attractive offer - good combination of price and terms. I think you'll thank yourself in the future.
1 vote Thank Flag Link Sun Jun 10, 2012
Thank you Janey. I dont think budget is an issue as its well above the average for the area- while one of the houses we bid went higher than our comfort zone. The bid we put was more than a full price offer.
Flag Sun Jun 10, 2012
Hello Homebuyer,
Today's market is rough. I feel really bad for my clients who are constantly outbidded by all cash buyers waiving all contingencies. After a year of not feeling that you're moving forward is ample time to make a decision about who represents you in a huge purchase.
Your second real estate agent is no way obligated to giving the fired real estate agent a referral fee. However, if you do happen to purchase a property that your first agent showed you, there may be an issue.
Good luck and I hoppe you get a house quickly!
Lynn LeGlaire
1 vote Thank Flag Link Sun Jun 10, 2012
Samal:


"We have been working with a realtor for over a year to buy a house. Inspite of giving the realtor a fair chance (we put in 4 bids, clarified our budget etc), nothing has worked out for us."

Is it the Realtor's fault four of your offers were rejected, or was it the current market at the time? Did the Seller(s) receive a "better" offer than yours (not necessarily price; contingency timelines might have been shorter, larger deposit, 100% cash, etc.)?



"Certain advise we received from him (waiving appraisal contingency on an overprices house, preference over his mortgage contact over credit union even if its a little more expensive etc) was not what we felt was right for our famil we decided to change realtors."

Were the properties over-priced or were you under-funded for the market targeted? Did you ask your Realtor to go back and look at the final sales price of the four homes?

Most all Realtors have a preference for where their Clients obtain funding. This is because we like to work with seasoned mortgage professionals to reduce our Buyer's risk and be able to have clarity regarding the exact status of a Client's loan.

For example, there are 2 types of loan conditions we need to stay on top of to meet contingency timelines of the purchase contract: 1) Prior-to-doc (PTD) conditions are those that must be satisfied before the lender’s underwriting department will generate and send loan docs for you to sign at escrow. 2) Prior-to-fund (PTF) conditions are those items that must be satisfied before the investor will “push the button” to send your new loan funds to escrow. To be proactive regarding #1 & #2, I ask for the lender-specific list of PTD/PTFs generated by the Underwriters and go over it to get ahead of any potential issues that may affect funding, which could place your good faith deposit at risk, and/or lead to the money spent on appraisal/credit report/property inspections to be wasted.

Additionally, while some may believe "all lenders are the same"; in fact, the opposite is true.
See: http://tinyurl.com/6qln6nd



"We did not feel we were getting the right advise, negotiations skill or guidance needed to get a house quickly and its been 1 year of looking already."

Did you bring up these concerns to your Realtor? Communication is a two-way street......



"The old realtor now contacted us and wants us to ask any new realtor we sign up to give him 25% of the commission in leui of his efforts spent (on failed past bids). I do not think this is fair to any new realtor since we are changing relator for professional reasons and it was a performace based agreement where we did not get success."

If you honestly believe your Realtor is 100% responsible for not successfully obtaining a home within the year I suppose you would have a point. However, I believe the likely reality is the market played a bigger role than you want to acknowledge and/or your opinion of value did not match that of the Seller's; and hence, your offers were not accepted.

-Steve
1 vote Thank Flag Link Sun Jun 10, 2012
Samal, dismissing the reasons of why you are at your present juncture weakens the process for making an ethical decision. This has nothing to do with the suggestions of the professionals answering your question. The most important opinion regarding your primary questions is yours; and it simply depends on whether YOU believe your former Agent deserves some compensation for their effort/time expended based on all facts which transpired. If you feel NO compensation is called for then so be it. If however, you feel some compensation is due and 25% Referral Fee is excessive, determine what you believe is fair and inform the Agent of your decision. The more important question I see is how do you plan to avoid a similar situation with the next Agent if you do not consider the reasons for how you arrived at this point. Clearly, bi-lateral expectations should be tabled at the start of your next agency relationship to avoid a repeat performance of disappointment.
Flag Mon Jun 11, 2012
Steve, I appreciate your view. With 1 year of no results, without going deeper in the reasons(market conditions or realtors fault - lets just leave the reasons aside and see whats ethically right), we feel we need to change the situation and get a fresh perspective and direction rather than continuing with the same flow. We feel that is the best for our family and want to ensure we do whats ethically right. I dont think a commision is due to the previous realtor if the new one closes a new deal - and dont want the new relator to lose any commision that is right fully theirs. We would not be looking at any houses that the previous realtor showed and have no contract. Hes still asking for 25% of the commission from any new realtor we sign up due to the time and effort hes spent in the last year and the 4 lost bids. That does not seem fair to a new realtor. What are your thoughts?
Flag Sun Jun 10, 2012
Great conversation Steve!
Flag Sun Jun 10, 2012
Steve, It's good to see someone point out another way of looking at things. Thanks for playing the "Devil's Advocate!"
Flag Sun Jun 10, 2012
I agree with Brian Byhower. Sometimes the Realtor you select is not the right fit for you and your situation. It's happened to me with buyers before and it happens all the time in our industry.
Although your previous agent spent a lot of time with you, submitted several offers and tried to help you, it didn't result in a successful transaction.
You are free to work with whomever you desire. I do not agree with the first Realtor in asking for a referral fee from the next Realtor you work with. Although if you buy a property that you previously viewed with Realtor #1, he may have a "procuring cause" claim against earning the fee.
The way I would handle it is to give Realtor #2 a list of the homes you already viewed with Realtor #1 so he/she 1) Has knowledge of your property history and 2) Realtor #2 can learn more about what your likes & dislikes are to better help you find the new home of your dreams.
If there is a previously viewed home you want to go back to and offer on, discuss an equitable situation with both Realtors before a battle ensues as to who actually earns the fee.
And be completely honest with the new Realtor you work with and through open communication a more desirable outcome with happen.
1 vote Thank Flag Link Sun Jun 10, 2012
Great answer Neal - I am sure Samal found it very helpful.............


Samal, sometimes it's just time to move on, and I do think, based on what you have shared, that it is time for you to interview and find a new agent.

Clearly, there is something missing in the relationship with the current agent, that, after a year of working together, should be present.

While I do have empathy and feel for your original agent, I do not think he should ask for a referral fee....... unless, of course, he is the one who helps you find someone new, and actually refers you to someone.

Good luck and I hope you find what you're looking for soon!
0 votes Thank Flag Link Thu Jun 28, 2012
Hello Samal,

I am sorry it did not work out with the first realtor.

If you were VERY clear with your agent on your max sales price, type of home you desired (Single Family vs Condo) , area you desired, and type of sale ( standard sale, short sale ,or REO), and he/she still did not work diligently to finds homes within your specs and budget, you have every right to change agents.

However, if you did not make your desires CLEAR to your realtor it may be unfair to blame him/her for not finding you a home. Maybe they did not show you some homes because they did not think they would meet your needs. For the most part buyer's agents are the hardest working agents in the business. They spend hours searching for homes for their clients. The success of their business depends on making their buyr's happy enough to refer a friend or relative to them.

Now, the fact that you were working with an agent for one year and only submitted four offers, implies that you guys may not have been on the same page.

As far as the new agent paying a comission to the old agent, that would only be in order if you have the new agent write an offer on a home the old agent had already shown you. If your new agent finds a home for you, and you are viewing it for the very first time, no comission to the old agent of any kind is in order.

Best of Luck to You!

Kawain Payne, Realtor
0 votes Thank Flag Link Mon Jun 11, 2012
Dear Samal,

I want to be fair to all parties involved with my comments here.

If you are looking for REO, Short-Sale, Foreclosure properties and you have hard to find criteria.( good contdition, good area, etc) .it's not that unusual to spend 6 months looking or even longer then that. It's a very difficult market in the distressed property arena, and many buyers are being outbid by all cash investors.

If you truly feel your agent has give you poor advice, then by all means shop around for a more experienced agent. I'm not sure what you mean by "performance based agreement". The Standard buyer/broker agreement outlines your duties and obligations but the term performance based is not in it.

I don't think a new realtor will sign anything unless the present agent has referred you to them. Please take a good look at your agreement though since I'm not sure what you signed.
0 votes Thank Flag Link Mon Jun 11, 2012
Its not just poor advise. Its been 1 year and still no house. We have mounting pressure to get one and feel we need to change the situation rather than just keep continuing with the flow. We are first time home buyers - perhaps we are missing something more than what we see happening with this realtor. We would like to try a change - do we really need to be giving commision to old realtor from any new realtor we move to? We have no contract and would not be bidding for any houses seen with the old realtor. Him asking for 25% from any new realtor we sign up seems unreasonable and unfair to new realtor.. Please advise
Flag Mon Jun 11, 2012
In general, I think it's important to know why you want to change Realtors and make sure they are valid reasons. From what you've shared, particularly the waiving of the apprisal contingency - you have every right to change Reatlors.

Question - did you sign a buyer's contract? If so, the agent may be entitled to something. That would be specified in the written contract you created orginally. If however, you did not sign a contract, then you owe that person nothing.

Hope that helps...
0 votes Thank Flag Link Sun Jun 10, 2012
Samal,

It's not enough info to determine why you're giving up on your agent. It would help to hear from your agent's side of the story though to help you better.

If you don't feel comfortable and don't have an agreement with your agent, fire this agent and get a new agent. Also, there are many agents who would not mind paying a 25% as a referral fee.

Don't think about what's fair for your new agent, think about you and your family best interest, first.
0 votes Thank Flag Link Sun Jun 10, 2012
You have no obligation to the realtor who was representing you unless you signed an agreement in which case if you need to make sure you understand the terms of the agreement. Sometimes despite all of our best efforts as agents in this extremely volatile market things do not work out with our clients. I hope that in choosing your new agent you interviewed him/her and made sure they were a good fit for you. Please make sure you are courteous to your previous agent and let them know why you are choosing to move on. Good Luck in your home search and hope that you find the perfect place!
0 votes Thank Flag Link Sun Jun 10, 2012
It sounds as though there is resistance from the old agent. It is natural for them to feel slighted. However, if they were unsuccessful in their performance, there is no need for you to feel guilty about making a change and NOT providing any compensation. Be thankful there is still a good buying market. A year should have been more than sufficient. Move forward.
0 votes Thank Flag Link Sun Jun 10, 2012
The agent is not entitled to any referral from the new agent. Pure and simple. Even if you signed a buyer/broker agreement, they are difficult to enforce, especially since you are not happy with this agent.
You shouldn't be expected to continue with this agent. Don't worry, and I hope you find something soon.
0 votes Thank Flag Link Sun Jun 10, 2012
Hello. Sometimes things work out that way. Not all offers written get accepted. However, there are certain ways of writing up offers that make them stronger than others. An experienced Realtor is an importance piece of the puzzle. Try a new agent that's experienced and familiar with the areas that you like. If you select the new Realtor, there's no reason your old Realtor deserves a 25% referral fee. By the way, don't waive the appraisal contingency next time. There are so many other things you can do to make your offer appealing. Good luck.
0 votes Thank Flag Link Sun Jun 10, 2012
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2015 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer