Home Buying in 01609>Question Details

Yingbrooke, Home Buyer in 01609

If the agent did not get paid enough from the bank (because I am buying a short sale property), should I (as the buyer) to pay her composition?

Asked by Yingbrooke, 01609 Tue Mar 1, 2011

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The other answers address the question technically. I would lke to add that the commission paid or not, a sincere thank you and a few testimonials for your agent's web presence are generally appreciated, as is referring the agent's services in the future.
1 vote Thank Flag Link Tue Mar 1, 2011
Buyer agents know what the commission rate is advertised in the mls listing when they show you a property. Some assume this is absolute. In a short sale, sometimes the loss mitigator or bank will propose commissions be reduced in an effort to get an agreement in place. Effectively a lower commission reduces the banks loss on the transaction and sometimes it makes a difference. Any agent who works with short sales knows this and would hardly be surprised.
As other answers indicated, if you have an agreement with your agent THAT DEFINES COMMISSIONS, your agent has a case. In general practice, most agents accept the fact that commissions sometimes get negotiated down in a short sale and live with it to get the deal done.
It is an unpleasant reality in working with short sales that this sometimes happens.
If you do not have an agreement that defines commissions, you have no obligation -- unless you feel a moral one.
1 vote Thank Flag Link Tue Mar 1, 2011
That depends. Did you sign an exclusive buyer representation agreement with her? If you did, then you probably agreed to pay her the difference between what she got paid from the bank and what you agreed to in your buyer agreement. If not, then she agreed to be paid whatever the sellers' offered her to bring them a buyer. She should have been aware that all commissions in a short sale are subject to bank approval and could, therefore, be reduced during negotiations. We all know that we are taking that risk when we represent buyers of sellers during a short sale. The only way to avoid it is to sign a buyer agency agreement and require the buyer to make up the difference.
1 vote Thank Flag Link Tue Mar 1, 2011
As a buyer’s agent, we are always looking out for the best interest of our client. To put our client in a situation where they feel obligated to pay us out of their own pocket, outside of the parameters of the contract, is very unethical. The terms of each contract should be laid out and very clear to each individual involved, so there should never be an issue at closing about what amount is paid to the agent. If your agent is unhappy with the amount they receive, they should not have taken the contract to start with.
0 votes Thank Flag Link Wed Jan 9, 2013
hey you know what the commision is going in so live with it or pass on short sales. They are problem related doing the entire sale,so lets not add to it.It is what it is! That was a good question Thank You
0 votes Thank Flag Link Wed Jan 9, 2013
I'm confident that your broker is not losing money on this deal and agree with the others that the answer is "no." Contrary to Jaffo, I would hesitate recommending your agent a career as a thoracic surgeon.
0 votes Thank Flag Link Thu Apr 7, 2011
No. All agents and brokers will whine on and on and on and on that they're screwed every which way by their clients, the buyers, the banks, the mortgage brokers who demand the buyers have an income, it's endless. The answer is give no one nothing that isn't in a contract and sign nothing that anyone puts in front of you without having your own lawyers rip it apart and rewrite it on your own terms. If the agent is browbeating you for money, report it to the state AG's office and see if it's legal to try to extort extra-contractual fees out of buyers. The newspapers are filled with real estate professionals being arrested, arraigned, indicted, convicted and jailed for all manner of fraud and financial mayhem. If you are near a 'professional' from this industry, you are in grave danger and you need to do everything you can to protect yourself. If you've got cash, too, you are god. Period. God. No need to bring scummy, wanton bankers into the room to further screw stuff up and rob you. If you are buying today, on the cusp of another period of price freefall, you are doing everybody on the sell side an incredible favor. If they're so abused in their profession, you can tell them that they might consider becoming thoracic surgeons.
0 votes Thank Flag Link Wed Apr 6, 2011
Your buyer contract would spell that out ahead of time.
0 votes Thank Flag Link Wed Mar 2, 2011
I agree with most of these posts. Yes, your buyer's representation agreement spells out what you are obligated to pay specifically. Many times realtors end up doing a lot of work on short sales and then get the "short" end of the stick. You are very thoughtful!! I would also suggest that you continue to speak highly of your agent and make sure that anytime you hear someone mention buying or selling a home, the first words out of your mouth are your realtor's name followed up by his or her number. That's the best gift of all and repayment!
0 votes Thank Flag Link Wed Mar 2, 2011
No but refer her to everyone you can think of who may have a real estate need in the future.
0 votes Thank Flag Link Wed Mar 2, 2011
You are a thoughtful client! Well, if you signed a buyer representation contract (any card carrying Realtor is required to work under contract NAR rules) then your obligation is clearly spelt out in the contract and it could be a variety of things.

1) Agent agrees to work for whatever the advertised commission is.
2) Agent works on retainer
3) Agent works for a specified commission rate regardless of co-operating commission offered

These elements are usually agreed upon when you hired your agent and may have been renegotiated during the specific transaction.

If there was no contract, then what you choose to do above and beyond for your agent is entirely up to you. Though your agent may also have to follow his/her company policy.
0 votes Thank Flag Link Tue Mar 1, 2011
Interesting question. Unless you have a Exclusive Buyer Agent contract stating a specific amount or percentage then the answer is NO. Agents know that when dealing with a short sale anything can happen in regards to the commission.
Web Reference: http://mariafabiano.com
0 votes Thank Flag Link Tue Mar 1, 2011
Thats a great question! . I would assume you do not have a buyers agency agreement in place, otherwise it would be spelled out clearly within your agreement. The bank allows a commission percentage for the buyer, they buyer knows that fee up front before negotiating on your behalf...Good luck!
0 votes Thank Flag Link Tue Mar 1, 2011
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