If this deal falls through for you, don't hesitate to contact me. I'll help you find the right house for you with YOUR interests in mind.
Here is my advice. Clean and simple.
1. Be sure to hold on to all the documentation you have regarding your transaction including e-mails. Also be sure to start a phone log in which to log all phone conversations with the agent and/or broker. Be sure to Include dates and times.
2. Don't waste your time going to your local REALTOR association. They are toothless tiger's and have no power to solve your problem.
3. Locate a good real estate attorney and spend an hour or two discussing your issue. In many cases a stern letter from an attorney can solve the issue.
4. Even if the attorney letter works, be sure to make an appointment with the local District Attorney's office to ask for an investigation into the extortion issue. And don't take no for an answer. There may even be a violation of federal racketeering laws should a conspiracy be proven between the broker and the agent.
5. File a complaint with the California Department of Real Estate. The WILL respond to your complaint. And if there are no mitigating circumstances they most likely will take action.
6. Tell all your friends what this agent is doing to you. Brokers and agents like this are what give real estate industry and bad name and they must be run out of business. Word of mouth is the best way to do this. Just be truthful in you comments. You don't need a slander or libel suit thrown at you.
7. Don't back down and be sure to pursue it until this agent and her broker are out of business.
Have you tried speaking to the broker directly? The commission agreement is signed by the seller -- granted by the seller & lienholders involved, and shouldn't have anything to do with you, particularly since you never signed a buyer-broker agreement. Try getting on the phone with the broker/manager of the office this agent works in and have a straight talk with this person. Also, a real estate attorney making a phone call on your behalf to the broker will definitely set this situation straight. You're in the right here! Good luck!
Broker Associate/EcoBroker Certified
If the agent is threatening you for the commission, then they are totally unethical and you should not work with them. They should be aware of what the bank will or will not pay them.
It all boils down to an agent being greedy, they should know that we are in a tough market and will not always get paid the full 6%. She can either take the deal or not. Good Luck.
This is a tough situation. Are you getting a really good price on this house?
Sometimes I think buyers in this market might loss track of the pricing they are getting compared to the market prices. Putting all the commission and drama aside.
Are you getting a deal on this house based on the work of the agent?
If you are getting a great price then that means the agent worked extra hard for you to negiotate with the bank.
Would you buy the house for 1% more if it was requested by the bank?
If you really like the house and you are getting a good price I think you should pay the agent.
If you are getting the house at a high market price then I would say you should stick your ground even if it means walking away to purchase another property.
The question becomes can you find another house that would make you just as happy for a similar price?
If yes walk away, if not Pay the agent and THANK them for all their hard work.
Your agent is behaving in a shameful, unethical, and greedy manner.
I am very sorry that she is subjecting you to this & I, as a REALTOR, am very embarrassed by her actions and want to say that she does not represent the rest of us in this profession.
You are correct, the commission agreement is between her, her seller & the lien holder & if she has a problem with that she needs to speak to them.
Call the local association of REALTORS (she should be a member) & make a complaint & that should take care of it.
Tell her that if she continues harassing you regarding this matter that you will hire an attorney.
If you call me with her name & company, I can look up her association # up for you.
Best of luck,
The commission that the listing agent is receiving is between the seller and the agent, not the buyer and the agent. Unless you signed a separate agreement with the agent stating that you are going to pay them, they should have nothing to stand by.
I want to see this one go before a judge and see what they have to say about this agent. Who's interests were they looking out for, the seller's (NO!), the buyer's (NO!), their own (YES!!).
I think the agent should hire someone with real negotiating skills to get back the 2% of their own commission they gave up.
Did you sign a dual agency disclosure? This agent is not representing you at all and I believe they can get themselves in hot water.
Best of luck! I would talk with this agent and have them get to work on negotiating this transaction better with the bank instead of you.
If you lose the deal over the commision I would consult an Attorney to determine potential liability of the Agent and Broker. Those of us who run professional Real Estate practices put the client first and make our commisions based on refferals and repeat business.
1) The Commission issue is NOT "YOUR" issue.
2) In the past 3 months, I have not seen ANY commissions reduced - even on Double Ends and most ESPECIALLY Wells Fargo.
3) The Purchase Contract is between YOU and the SELLER - The Agent + Broker are NOT a party to the contract and therefore CANNOT CANCEL the escrow !
4) Tell your agent / broker that if they continue along this line, you will contact your Attorney and the County District Attorney's Office (they would love this case) as well as the CA-DRE.
Also, contact the local Association of REALTORS and file a complaint.
Best of luck,
Broker / Owner & Certified HAFA Specialist
Thom Colby Properties
Newport Beach, CA
Moving Lives Forward (TM)
We NEVER DOUBLE-END a Transaction in our Brokerage. There is NO benefit to the Seller or Buyer but only benefits the Agent. Also, NEVER use your RE Agent / Broker as your Lender!
888-391-5245 Direct Cell
THE AGENT HAS NO POWER TO CANCEL A TRANSACTION on their own. They are not a principal.
The buyer or the seller may ATTEMPT to cancel the transaction but there are consequences for that, per your contract. Check the 'Remedies' portion.
1. The (agree with the others, creepy/piggy/uneducated/unethical) agent's BROKER to communicate with the seller directly. Make them aware you do not want to cancel the transaction.
2. Escrow - and make them aware that you have NO intention of cancelling the escrow.
3. A CA RE attorney, if need be.
and stop the insanity.
I'm really sorry this has happened to you. These kind of stories are very distressing to brokers who are trying so hard to raise the bar in our industry.
Dual agency is a state by state deal - some allow some don't.
In Washington there is fiducuary duty if you are the listing agent and that's to the seller.
The buyer signs off allowing you to represent him as well but you are still bound to the seller!
Check the requirements for California and see what the law says.
That's the best way to handle dual agency - and it works pretty well if the law is followed.
This agent is being a pig! As you didn't sign any written agreement with the broker to ensure the 6% compensation, the agent is out of bounds for demanding it.
(Actually the agent is likely only getting 4% because she has both ends of the deal as this is the way many lenders work in a short sale)
The brokerage is in BIG trouble if they try to hinder your deal. (it's called something like contractual interference)
I assume you are in a designated agency state, so the agent has a fiduciary obligation to work in your best interest. And threatening to under mind and terminate your transaction is obviously not in your best interest!
Make sure you have a good real estate attorney to get you thru this agent's threats..
If you belly up to the plate to pay this, you are part of the problem. Stand your ground be part of the solution as we move into a more honest and ethical way of approaching real estate. You have no agreement with this agent, her agreement is with the seller. What goes around comes around. Stand your ground.
As for their conduct and unethical behavior, there is a Real Estate Commission (FREC) which handles these complaints IF they impede the sale of the property you can report them. Hope this helps
181 answers and the original author has never responded to any of your answers; Here are some of his other questions:
1. I have a valid purchase transaction, and no written obligation to pay any agent commission.
2. The sales person and the broker are threatening to interfere with my purchase transaction if I don't pay them money I am not obligated to pay.
Turn in the broker and his licensed salesperson in to the Department of Real Estate for breach of fiduciary, and make an ethics complaint to the local Association/Board of Realtors. Send a copy of both complaints to the broker and his salesperson, and let them know that you intend to pursue your rights to close your transaction.
Note that everything else in the question is absolutely irrelevant to the answer... all we need are items 1 & 2 to answer the question. Even if there were an actual breach by the seller in paying the commission due the broker, this STILL would NOT excuse the broker for interfering with you closing your purchase. (In this case, there probably is no breach, anyway, because of the short sale.) Naturally, you should consult with your legal advisors on this or any other any legal matter.
A: What I understand, the agent can not back to the buyer to request the difference at commission.
B: Get MLS report, you might need agent report instead of client report to verify the commission percentage.
If it is short sale, the listing agent must disclose at listing and mark various commission (But it has been changed last year - not sure time - the regulation changed by Fed)
C: yo umay clian to your state real estate committe about the case (keep any evidence - paper, letter, answer machine message,etc)
D: This is short sale, you stil have legal attorney to serve you the all process. Make her / him involve this case.
Good Luck and Best Wish to Make your Dream Come Through.
So that said, what the agent is doing in unethical at the very least. In a short sale the seller of the property really has no say in what the commission paid to an agent is. The seller who lists the property doesnâ€™t have any money coming to them at the close of escrow as it is NOT THEIR MONEY. It's the bankâ€™s funds, and any commission paid is paid from the bankâ€™s funds at the close of escrow. So, they have every right to say what they are willing to pay.
Now when an agent is acting in the roll of a dual agent as is the case here, they are the person responsible for negotiating with the bank to obtain the sales price the bank will accept from the buyer and their own commission. It is not unusual for Wells Fargo to only want to pay a 4% commission. They are one of the hardest banks to deal with in short sales as they are trying to maximize their income from the sale and minimize their or their clientâ€™s loss.
As to whether you need to pay the additional 2% commission or not, NO, YOU DO NOT! If the contract is in escrow and signed by both you and the seller and the lender has accepted the offer to release their interest in the property, the agent has no legal ground to stand on. If for some reason that agent tries to change anything in a signed contract without your full authority and agreement (done by either an amendment of a new contract), they can and probably lose their license.
And, if what they do negatively affects you (such as you not being able to purchase the house or you losing your escrow funds), you can sue and win. It would not necessarily need to be anything with the contacts or escrow either. That is why all agents and brokers carry insurance.
Did the agent have you sign a dual agency agreement? Is that agent an Accredited Buyers Representative, or an Accredited Sellers Rep? It sounds to me as if the agent is inexperienced and is trying to work more for him or herself and not for either you or the seller.
Most of what you're saying is valid. And, there is no justification for the actions of the agent. All I'm saying is the broker has the choice to accept or reject brokering the deal for any reason. If they don't like the compensation they should just reject it. So, if a subagent of the broker does something funky, the broker can during his or her review process say "no way-I'm not doing that".
There seems to be little chance that the broker could cause the transaction to be voided if the only "defect" :) in the agreement is less commission than the broker might be able to earn with another buyer, even if they were foolish enough to kill the transaction.
If I were you, I would immediately complain to the DRE.
My attitude is tha if you can't get the broker and the agent to love you, then the next best thing is to have them fear you! Turn the spotlight on them, and maybe we can get rid of some of the bad apples in the industry.
The bank paid out 4%, not $500. If the agent has a 50/50 split with the broker, the compensation went from 3% to 2%, not half. The agent knew what she as getting into when she entered the dual agency situation and the liability that may be incurred from willingly entering into a dual agency situation is the broker's issue, certainly not the buyer's.
If, as has been stated numerous times prior, the buyer did not sign an agreement prior to entering this arrangement agreeing to make up any difference between the seller's agreement and the bank's decision, how can the agent justify threatening this ridiculous action against the buyer?
If this is consented and disclosed dual agency, and you had a 2nd buyer agency agreement with a minimum co-op defined, you might be held to that agreement. So if the bank allowed 5% gross commission, and your signed buyer agency had a 3% minimum that would mean the split would not be 50/50 after the bank modified the gross commission. In this scenario, I could see the basis for wanting you to kick in half percent only if signed both a dual agency consent form and had a minimum co-op buyer agency agreement in force at the same time.