I have almost 20 years in the business, would I be worth more than a first year agent? Most certainly. Best of luck!
Exclusive Buyer's Agent
100% for Home Buyers - 100% of the Time!
Unfortunately, the bottom line is, if this agent has written an offer on a home on your daughter's behalf, she may be libel for the additional fees. My guess is, a simple explanation and conversation w/ the agent will clear up any confusion.
I wish you the best of luck. Any good agent will gladly work w/ you and explain their position in a way that makes sense and is fair.
So in truth I may not be much of help to your question, because I can not tell you if the contract signed is "unreasonable". I too follow a strict code of ethics and will not comment on how other realtors conduct their business.
We are not a commodity in this world and we realtors are not all the same. If that was true I would not be fielding questions such as this, and I would not be answering questions on Trulia where consumers are complaining about the service they are receiving from their Realtors.
And in that sense maybe the best advice I can give you is to speak directly with the Realtor and figure this out together. There must always be good communication and trust in our relationship. If those two variables do not exist it will never work out in my opinion.
Additionally, Realtors subscribe to a Code of Ethics that says we should treat people fairly and honestly.
Hopefully, it's merely a misunderstanding or something that can be fixed.
Every company decides what their charges will be, and the commission is always negotiable. One of the reasons I left one of the large companies was that I did not agree with the extra fees that client were being charged.
While I don't offer a rebate, I do not charge a retainer or any kind of admin fee. There may be an exception to the commission portion if we will be working with a For Sale By Owner home. In that instance, the commission can be agreed on with the buyer and seller coming to an agreement as to how much each side will contribute.
It really comes down to this; do you both feel confidant that this agent will do everything they can to help your daughter get the home she wants for the best terms possible? If not, you should consider your options.
Have a great night!
Your concerns are all quite valid, but should have been addressed BEFORE any agreement was reached. However, if the agent is reasonable, and your daughter now feels as though she has been taken advantage of (though she should not necessarily feel that way), she can always discuss it with her agent and see what they can work out. Perhaps such a discussion will end ammicably, or perhaps not, in which case she can begin to explore her options. Hope it all works out for her...
Real Estate commission is 100% negotiable.
Not everyone charges an admin fee and very few charge an upfront fee.
In the future it is best to interview a few agents, compare, and negotiate whether buying, building and/or selling.
CRS, GRI, ePro
Broker, Owner, Realtor
Get a Rebate Real Estate
10539 165th Street West
Lakeville, MN 55044
A licensed agent is not being ethical if they comment on the rates, fees, or other agreements that another agent already has with a client under a signed representation agreement.
Sometimes you need to look deeper into the context of some answers that you may get on this type of public forum. The "spin" on some answers, that seems to feel like more of a sales pitch for the respondent, is quite inappropriate.
The answer that Mr. Wallace gave is the only answer that has any ethical merit. It is up to the agent and the client to decide on the terms of their contract that work for both parties. There is not any "set" or "typical" format or rate that can be called "reasonable" as every agent has different skills to offer and every client has different expectations and needs.
If your daughter and her agent are comfortable with the agreement she has signed, that is all that is required for it to be seen as legally "reasonable."
Ron, there are only two options on the buyer rep agreement to deal with displaced commissions. One is in the first section and requires a buyer to pay a retainer fee up front, just like with an attorney. That is 100% legal and some brokers do that to get a commitment out of the buyer. We don't do that. The second option is to write in (for example) 3% as what is due the buyer's agent if there is a discrepancy later. Now, it is true that it states clearly that if a buyer purchases a house and the listing broker only pays the buyer's broker let's say 2.5%, that technically the buyer owes them that .5%. But no reasonable minded company will actually demand that their buyer pay that. It is not wrong, because that agent and broker deserve to make a commission after all their hard work. And frankly, 2.5% is not fair. But it happens. And if the buyer does not want to pay that difference, then in my case we let that go. But the main reason that paragraph is there, Ron, is for something much bigger, and that used to be common many years ago. And that is where the agent shows your daughter a houseâ€¦..she comes by that night to take another lookâ€¦the owner comes out and says, â€œHey, want a deal? I am going to cancel my listing contract with my agent on Friday. If you get rid of YOURS, then I will drop the price $5000.â€ Years ago this was tempting to buyers to get a better deal. Today this never happens. Why? Because of all the legal hoops that we have to go through. Buyer representation is more important today than it has ever been, and the good news is that the buyer does not have to pay us, the seller does. Which is why in my entire career I have never seen this happen. A buyer purchasing a home without good representation and a skilled negotiator for an agent is pure insanity. Would I personally or my company ever sue someone for this? I doubt it. But it is there for a reason, and I hope you understand that.
As for the admin feeâ€¦..
Everyone has this. Some are $200, some are $500. Depends on the broker. But here is the real thing about this BAC fee. When I have a buyer I explain how I negotiate terms later on the sale. I will be brief here, okay. I explain to them that I willâ€¦..WILLâ€¦.get the seller to pay this fee. And after 10 solid years of transactions, I can assure you that I have made this work about 90% of the time. This does NOT, however, include transactions where there is a short sale. That will never be paid by that lender. It is not allowed on the HUD. But â€¦.in every one of those particular cases (which has been about 60), I was able to get my broker to waive the fee. And why? Simply because of the one concern you haveâ€¦.they did not want our seller to have to pay the fee when they were already losing their home in the short sale.
I hope this helps you a lot. Hopefully you have a very strong and good buyerâ€™s agent that can negotiate well and keep all of your daughterâ€™s cash in her pocket. My goal is always to help my buyer keep all of their cash and get the other side to pay as much of these fees as possible. The only thing you canâ€™t make â€œgo awayâ€, of course, is obviously the down payment. Itâ€™s not 2004 any longer!!
Have a great day!
The problem with answering your question is that you stated that she has already signed a Buyer Representation Agreement.
The National Association of Realtors Code of Ethics states the following -
REALTORSÂ® shall not engage in any practice or take any action inconsistent with exclusive representation or exclusive brokerage relationship agreements that other REALTORSÂ® have with clients.
Therefore, no other Realtor is supposed to really comment on the apprpriateness of the financial arrangement she entered into and can't until she is out of the contract.
RE/MAX Results - Wayzata
It is easy to understand your concern.
Let me propose another scenario that is actually at the root of this problem.
Some homes are shown for sale in the Tampa Bay area of Florida that offer the buyers real estate agent $1. Seriously, $1. These 'limited service' homes for sale do appear in the MLS.
The buyers agent must have a conversation with the buyer to address this situation. Are you, dear buyer willing and able to agree to compensation or should I NOT show these homes to you?
This would include many FSBOs, some investor homes, auctions and some bank owned situations, and you bet, some of those 'rebate' homes. Where do you think that rebate money comes from? This creates the situation where the buyer believes the agent is not showing all the homes available. Buyers have a tendency to want to see all homes for sale.
As home buyers and seller find a greater array of choices in regards to pricing and rebates which they have demanded,, and the ability to select the level of service they need, the consumer real estate environment becomes more complex. As you know, for real estate agents, this is not a hobby.
Ron, how would you suggest this dilemma be resolved?
Should a seller, when realizing the down payment is coming from a relative, consider the purchase offer to be potentially more problematic and favor other equal offer more favorably?