That is very considerate of you but as the others agents have stated any compensation has to go through the broker and they are compensated and then the agent. I have never had this happen because I use a buyer"s agreement but I am sure the agent would appreciate it if you remember how much time they spent by sending referrals to them. How about a nice lunch? PS: remember an agent can always ask for a one day listing on a home to show one particular client and if the seller agrees, then the seller pays the commission to the agent and everyone is happy.

It is the same in NC....agents cannot directly accept compensation but must turn it over to his/her broker.

Hi Imm,

One thing I haven't seen mentioned here is referring business to the agent. You can't pay an agent directly in Maryland.... it has to go through the broker, who, depending on their business model, may or may not take part of the money.

If you really want to compensate the agent, tell everyone you meet what a great agent he/she is and keep some business cards handy. That will benefit the agent more in the long run, and you can feel good knowing that you did the right thing. And you should feel good, because most people would not ask the question you asked.

I worked with my buyers for a year, showing them houses when they came to the mountains from Florida. None fit until I found THE one and emailed it to them and called them. They had just left to go back to Florida and did not want to make the trip back up. Bottom line, they did make an offer but it turned out to be a back-up offer and the primary buyers got the house. Six months later my clients called the new buyer directly to ask how they liked the house and found the buyer was in a position to sell. When my clients bought that house that I found for them directly from the owner, they left a card and $500 on my desk, thanking me for helping them find it. Everyone was happy.

The other day, I drove around a nice neighborhood, found the best houses in the neighborhood, and then put my for sale sign up on their front lawns. I was getting calls like crazy, but the sellers were not interested. I was flabbergasted; I have ready, willing, and able buyers I told them. They told me to take my sign and get the hell out of there before they called the cops. What?!. We don't have a listing agreement with you; you fool. Your helpful agent chose not to establish a Buyer Agency Contract with you so you owe the kindly person nothing. That is protocol. Yes, we would all like to get paid from all of the Buyers and Sellers out there with whom we do not have contracts, but that would be a bit silly. Don't you think so? That said and nice guy that you seem to be, sure, pay him. Ten percent of the purchase price sounds fair to me.

Mac,
You are too funny! This morning I needed a laught, thanks.
Ania

To be fair, I think it's useful to evaluate how much that agent contributed to your ability to make the decision to buy the home you found.
Finding homes is not a challenge, they're freaking EVERYWHERE! My goodness, they even put them on the internet! So finding a home yourself is not the sort of accomplishment that is honored with a banquet at the VFW hall.
But. Buyer's agents often provide a lot of educational value in showing people what to look for in a home - light, siting, floorplans, traffic flow, quality of finishes, potential punch-list and defect lists, evaluating neighborhoods - the list goes on.

Imm
I thought it was very commendable that you sought out advice, and wanted to do the correct thing, and to follow "protocol".

Good luck to you with your purchase.
Best wishes......
Debbie Rose
Prudential NJ Properties

Thank you all for your insight, it is helpful and very much appreciated. As for those who seek to pass moral judgment on me, please reread the entire question. I specifically stated in the details of the question that "I still want to be fair to the agent and adhere to industry protocol." As someone who does not work in the real estate profession, I simply wanted to know what was considered fair according to industry standards. Isn't educating buyers/sellers a purpose of this Q&A section?

Nevertheless, I understand this topic may touch a nerve for those who have had bad experiences with clients in the past. All I can say is that it was not my intention nor desire to take unfair advantage of the agent. In fact, I can think of no better person to guide me through this thorny process.

Ramesh........just as an aside......before you say "shame on agent" to anyone....just know that signed buyer agency agreements are not an industry standard all over the country. NO ONE in my area uses them. If I were even to suggest signing such a thing, the bvuyer would go running off into another agent's welcoming arms.

I am not saying having that kind of agreement isnt't good business....... I am saying it just isn't done here. I have to ask the buyer for their loyalty and earn it.

In NJ, I disclose I am working with someone as a buyer's agent (or disclosed dual agent if the opportunity arises ), but that's it. There is no other written agremeent. If a buyer winds up buying a fsbo, for example (and I mean a real fsbo, not one who is listed with a flat fee office - one who is advertising on their own, "no brokers")...then that's just how it is. I wish my buyer well, and hope they will refer others to me in the future. We have nothing that binds a buyer to us or spells out our compensation.

We all do business differently throughout this big country of ours, so we need to be open to that , and not judgemental of anyone else.

Have a great day!

Shame on the agent.
If u r an attorney, will u work with a client(customer) for 3 weeks w/o an exclusive buyer agency agreement?
U should offer the agent thru his/her broker what u consider as a fair compensation.
Donot negotiate on it.
Just pay them what u feel is fair.
The only protocol here is adhere to any verbal agreement u may have, otherwise pay the agent's broker a fair amount, most of which should goto the agent from the broker.
rgds,
Ramesh Chandra
703 635 8209
mepcigroup@gmail.com

Imm,

In answer to the part of your question about realtor vs. attorney...An attorney interprets the law. A realtor sets up showings, meets you at the property, coordinates all inspections, writes the offer on your behalf, and does all negotiations. If there are legal issues with the actual contract, then an attorney is necessary. Attorneys do not deal with the buying process at all really. Also, hiring an attorney is going to cost you additional money whereas using your buyer's agent does not because the seller pays our commission most of the time.

As some others have said, a short sale is often a nightmare. Just when things seem to be progressing, another lien is uncovered or some other problem comes up. Trust me, dealing with a bank who has zero emotion invested in the transaction, is quite stressful. You need a buyer's agent, plain and simple.

I never understood why buyers think that all an agent does is "find" potential properties. Are you suggesting that because you drove by this home and saw it before your agent did, that he/she has not done their job? That is like saying that because you were the first one to see a crime being committed, the police don't need to do their job from there. You brought the crime to the attention of the police, and their job is just beginning. Just as you brought this home to the attention of the agent--their job is just beginning! Don't fool yourself, this is can be a vicious business and unless you are an expert--leave the hard work to the professionals! Best of luck to you.

Lisa Devnew
LDevnew@cbmove.com

In reading a bit further, you do NOT want the seller negotiating directly with the bank. There are trained professionals to do this on a daily basis and know who they really need to speak with and how to get things done. In this situation both sides need some sort of representation -- whether it be attorneys or agents -- otherwise you could be floating out there for many months or even a year because you won't get to the right people.
This is not a specialty of mine, but I do know someone who deals almost exclusively with this kind of thing and can help the seller navigate. Please let me know if the seller would like help.
Thanks,.
Marney

Imm, if there is no written contract, then technically no. But if this agent has been working hard for you, and you will need guidance through the short sale process (especially if your agent has short sale experience), then why not use this agent? Generally the seller & third party in our area (meaning the bank) will pay your buyer's agent, if the short sale is listed with a brokerage.
An agent can write the short sale contract, and negotiate on your behalf.
If you like the agent and trust the agent, then use this agent to buy this house. You need someone on your side!
Good luck!
Sincerely,
Marney Kirk
Keller Williams Excellence Realty

Yes, if signed Buyers Agreement with the Agent that specifies that they will be representing you exclusively, you owe them compensation.
Even if nothing was signed, and the Buyers Agent showed you that same property, and he or she were the procuring cause, compensation is due.
There is a lesson to be learned here- To the Buyers Agents, always sign an agreement, if you do not, this will happen to you too! also, without the agreement you are not representing the Buyer, but rather the Seller.
To the Buyers- If you think that you can purchase a home on your own, do it and do not take advantage of the Buyers Agents! You have no idea how hard they work to protect you, the Buyer.
P.S You claim that you were working with a Buyers Agent for 3 weeks? Wrong! the only representation you had at that point is someone that was representing the Seller not you.
Three weeks of planning and coordinating to show you homes that you wanted to see is a long time of someones life, you simply took that away! Shame, shame, shame!

Without a buyers agent working for you, beware is all I can say. I have been selling R.E. for many years and would never advise anyone to buy from a seller without representation. The seller nornally pays for your agent representation and the things that can come up are far and wide...... I have had buyers call in the middle of a disaster and want help. Problem is, it is to late.

Imm hello.....
I think the specific answer to your specific question is...no.........you're not obligated tp pay any compensation to the agent since you don't have any kind of written agreement.

Whether it would be smart for you to have your agent handle this is another matter for sure. A short sale is anything but short! You may be happy to have help and guidance along the way. Negotiating with the seller is only the tip of the iceberg, as the real work, including having lots of patience, lies ahead.,

Good luck with whatever you decide!
Debbie Rose
Prudential N Properties

No, your REALTOR is the best person to guide you through the short sale process, especially if they have experience dealing with these sort of listings (not an attorney). I can tell you that trying to buy a short sale is no picnic, and you do have to have patience when trying to get your offer accepted by the bank that holds the mortgage on the property. No bank is going to sell a property for less than it will appraise for...keep that in mind. It can take months to get through the process only to find out that the bank wants $5,000 more to settle. Just keep this in mind if you move ahead to try and purchase a home that is being sold short of what is owed to the mortgage company.

Also, I like to tell my clients when I ask them to sign a Buyer's Agency Agreement with me this question: When you go to work, if your boss just said that he could not pay you for working today but he really just needs you to work...how would that make you feel? I am sure that you would just walk out. Do you not realize that when your agent meets you at a property that they are working...(drives his/her vehicle and uses their own gas, insurance and money to get there). That is the way that we earn our living. We work on our computers looking up properties for our clients (day and night) and meet our clients (day and night) and show them properties, write and negotiate contracts, make sure that our clients get good inspections and pay or collect a fair price for their home. We pay for almost everything that we use right out of our own pockets and pay almost double the taxes that most people pay. Why do you not think that your agent should be compensated for the work that he/she has done for you so far? If that person has been competent, honest and hardworking in your best interest, then yes...they do deserve to be compensated. And of course, we make nothing unless you actually buy or sell a home.

As the comedian Rodney Dangerfield once said "I get no respect, no respect at all." That is how I sometimes feel being in this business. Some people do not respect the work, time and effort that a good agent puts into working with each and every client. And that is such a shame. Put yourself in that person's shoes and think about it.

A real estate agent can help faciliate a short sale that is if they have experience doing so. That is how we do it here in PA. If not that agent might need to bring in some reinforcements from his/her office to assist.


Sean Dawes

There is no written contract, we just have been looking at places together. But yes, there is an informal understanding that he is my agent. What complicates this situation is that the place I found is a short-sale. Of course, I need someone to guide me through the short sale process, but I assume that would be a real estate lawyer rather than a realtor. Am I mistaken>

Yes you are obligated to compensate if they have a buyer relationship contract with you.

Who is going to handle all the other processes including the paperwork on this deal anyway?


Sean Dawes