Home Buying in 45233>Question Details

Rich Gajus, Home Buyer in Cincinnati, OH

Which realator should I use and is commision in play?

Asked by Rich Gajus, Cincinnati, OH Wed Nov 26, 2008

A few months back, before choosing a realator, I looked at a house calling the selling realator (SR). I've since then choose a buying realator (BR) and have been out w/ him 3 times looking at other houses. Now the origional house is back on market and I've been open w/ both realators who say I could use either of them. I've approached them both inquiring if they would be willing share a piece of their commision if I go with them. At first my BR agreed, but then backed out. Which realator should I use and should commission be in play?

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A couple of observations. In many states there is something called procuring cause. What this means is that, if you first see a listing with an agent, then that agent will probably be entitled to any commissions paid if you purchase the home, even with another agents help. Since you saw it with the listing agent, the agent should have explained dual agency to you an got your permission to work as your agent while representing the seller. If not then you are free to use any agent you like. A good listing agent will also not stand in your way of using your own agent as they want to sell the home. Which agent should you use? The one that you feel will best represent your interests and the one you feel most comfortable working with.
Contrary to what some people feel, statistics do prove out that a person working with a real estate agent will get a better deal on both the purchase of a home and the sale of their own home. The system certainly isn't a closed one. If you have the kinowledge, the desire and the time to represent your self then by all means do so. It is a service like many others. I am very good with cars so I will fix my car myself. This doesn't mean I would universlly speak badly of mechanics who charge a fee for their service. I have helped people purchase homes who have decided to list their own home and try to sell it themselves. Very few are successful as it costs a great deal to market a home today. Check out the price of one newspaper ad. My company puts a home on eight major internet websites. This costs a lot of money, but this is also where 87% of buyers are looking for homes. Where do we get the money to do all the marketing? From the commissions we earn and I do mean earn. If anyone thinks this is an easy job and we all get rich then I suggest they get their license and try it out. The turnover in real estate is extremenly high. Why? Because you work all hours of the day and night, always at the beck and call of your clients, Saturdays and Sundays, holidays, showing dozens of homes to clients who can't make a decision, or decide not to buy etc. Who pays for all of my time and gas money when this happens. I do!!!
Also, don't think that if you deal with a seller and don't use an agent, that out of the goodness of their hearts they are going to drastically reduce the price on the home. It doesn't happen. If anything, statistics show that you will most likely spend more than if you used an agent.
The questions asked is when is my commission in play? In my case it isn't. I charge for a service I render and I have fixed costs that I have to pay to do so. It is my business and this is my decision. You have the right to either find someone who will do it for less or do it yourself. I must do a good job because I have a long list of satisfied customers who refer new clients to me. This is how I determine the worth of my services. Don't expect me to work for free and I will pay you for whatever services you can render. This is the way it works. There isn't any reason to get angry and abusive about it. By the way, I wouldn't expect any agent to negotiate a god price and deal on a home for me if they can't even negotiate their own commissions.
Good luck.
2 votes Thank Flag Link Thu Nov 27, 2008
There have been quite a bit of back and forth on this topic. Wow. Lori Rossi seems to have written a very good response to your question. Simply put, if you don't see the value in your Realtor, don't use them. Follow Asher's advise and do it yourself. I don't know what has happened to him but he must have had a bad experience. That's a shame. However, if the Real Estate profession didn't offer a viable service, it certainly would have been "out of business" long ago. Find a Realtor you trust and use them. But don't call me, my services and fees have already been established by ME. I don't work for free, I can't work for free. I have to put food on my table and gas in my tank.
Good Luck
1 vote Thank Flag Link Thu Nov 27, 2008
What you don't seem to understand, JR, is that your "salary" has not been set yet. You'd like to think that you are entitled to 6% of every transaction, but the truth of the matter is, every time you sign a new client, you are negotiating a new salary with that client only. Agents hope that the current system of the closed MLS, and opaque commission structures remain intact so that buyers and sellers will continue to pay outrageous commissions. But informed buyers and sellers know better, and sites like Redfin and Zillow are doing away with your monopolistic practices.
1 vote Thank Flag Link Wed Nov 26, 2008
Regardless of what these agents tell you; commissions are always in play. It just goes to show the ethics of real estate agents when they tell you lies like the ones seen here.
When is your salary "in play", Asher? When do you kick your salary in?
1 vote Thank Flag Link Wed Nov 26, 2008
It might help to understand how a real estate agent gets paid. In the most basic example, a seller agrees to list the house with Agent A with Acme Real Estate Brokerage for a 7% commission. Agent X with XYZ Realty brings a buyer to the house, and a deal is made. The commission is split: 4% to the Listing Brokerage, 3% to the Buying Brokerage. The agents in the transaction then split that percentage with their respective firms based on thier own agreements (i.e., 50/50; 40/60, ect.)

The selling agent cannot effectively represent your best interests based on Ohio Agency Law. It's the responsibility of both of these agents to explain to you what types of agency relationships are and what they entail. You can also choose to represent yourself, in which case, the selling agent's commission agreement is with the seller alone and that percentage of the commission may vary. I strongly urge you to enlist the assistant of an agent you trust to work on your behalf. Without professional assistance, too many issues can fall through the cracks that may wind up to haunt you.

Finally, a smart, honest agent works hard and should be compensated. Think about it. Would you reduce your paycheck if someone asked? Good luck!

1 vote Thank Flag Link Wed Nov 26, 2008
What is unethical about stating that I personally as an independent contractor can make a decision about what commission i ask for. You as an independent buyer can make the decision to utilize me or not. It is called "fair market". Rich, I would be a bit hesitant to listen to anyone who calls people ignorant. I tried to give you an honest answer and I would never use that type of language in this forum. But then I guess I am just being a typical unethical realtor. This will be my last post on this subject as it is useless trying to reason with some people.
0 votes Thank Flag Link Thu Nov 27, 2008
Rich, I am sorry. Your question was an honest and sincere one. There are some good posts here. Hopefully you can sort through the YUK and get to the meat of the answer you were looking for.
0 votes Thank Flag Link Thu Nov 27, 2008
Do you deny this practice JR? Their commissions are always in play. JR's lies are simply an attempt to keep you from knowing about this practice and keep his/her commission a high as possible. JR, Dave, and Scott are truly being unethical here; and I would be weary of working with any of them.
I'm weary of reading post after posts full of personal attacks from you without reading an anwer to my question: When do you forego a portion of your salary?
0 votes Thank Flag Link Thu Nov 27, 2008
People like JR, who do not recognize this fact and continue to lie to consumers
Trulia, please remove Asher's post. I have not lied to anyone. this is simply a personal attack by a disgruntled troll.
0 votes Thank Flag Link Wed Nov 26, 2008
I've succinctly answered your question JR; and done so in a manner a 4th grader can understand. Maybe you should go have one explain it to you.

Your ridiculous attitude about your "salary" are exactly what give real estate agents such a bad name. You provide a service for a negotiated fee. You obviously don't understand the meaning of the word "negotiated." Do you really believe you have a right to 6% of every real estate transaction? Your hubris is remarkable!
You did not answer my question: WHEN do you defer your salary? WHEN? when do you kick in part of you salary?

I understand that you are under a misimpression that my salary is 6% of a transaction. It is not. Your thickheadedness is remarkable. You are also are wrong about who sets my salary. My salary is determined by the seller and the listing agent. Only a real dolt would not think that someone has no right to a salary.
0 votes Thank Flag Link Wed Nov 26, 2008
If you are going to chose an agent based on which one will share a piece of the commission with you, then you are going to get what you pay for. A weak agent. In my opinion, an agent who is willing to basically give up part of their income, has no backbone and I wouldn't want someone without backbone negotiating deals for me. I would want an agent to fight and save me every penny possible by negotiating the best deals possible. Not just writing up offers-working their butts off, doing their homework, and backing up lowball offers with facts to get it accepted. In the long run, you would be saving much more than a "piece of the commission" and your agent will be compensated fairly for the hard work. If neither of these agents can do this for you? Find one who will-there are alot of hardworking agents out there that really would like to help-regardless of what Asher thinks. Sorry Asher, don't mean to pick on you, I just see you complaing about agents all over the site. Maybe some day you will find a good agent also, and you'll understand what I'm talking about.
0 votes Thank Flag Link Wed Nov 26, 2008
Redfin is a valid site, that competes with traditional real estate models. Zillow however, does not compete, and says so in it's own charter. They have no interest in competing with Realtors and do not offer any realtor services, other than to allow Realtors to display their listings there, and to allow consumers to view information from public records regarding recent sales.
0 votes Thank Flag Link Wed Nov 26, 2008
Alan May, Real Estate Pro in Evanston, IL
Can't answer my question Asher? When are you willing to defer your salary?
0 votes Thank Flag Link Wed Nov 26, 2008
Hi Rich:

Based on my experience, you should stick with one Realtor that is in your best interests. Having a "buyer's agent" is the best way to go. The listing agent would be a dual agent on just that property that they have listed. When an agent shows you a home, that is the home you would work with them. So if the Listing agent showed you the first home and that is the home you would like to put an offer in, then you would have to honor that and use the listing Realtor. Also, not all agents are Realtors. Some are just Real Estate Agents. Realtors have to subcribe to a higher standard of ethics. Make sure whoever you are working with is a Realtor. You have to make the final decision of who you feel comfortable and trust. The seller pays the commission for the buyer's agent most cases. I wish you all the best in finding the home of your dreams!

Sheri Mapes the "Cincy House Expert"
(513) 253-7156
0 votes Thank Flag Link Wed Nov 26, 2008
Hi Rich - First question, is the house you originally looked at still listed with the previosu agent. If so, in a dual agency situation, their duty is first to the seller of the home and duty to the buyer comes second. MY thought would be to use your buyers agent if you think they are qualified to handle the transaction. There are many way to negotiate in today's market in order to get the best value. Feel free to email me or call with any other questions. Hope this helps,

Randall Sandin
0 votes Thank Flag Link Wed Nov 26, 2008
As a buyer you should definitely choose your own Realtor, not the listing Realtor. Buyers do not pay the commission directly - it is in the price of the house and is paid as a percentage based on that figure. The Realtor cannot legally share their commission with you. It is illegal to pay commission to a non-licensed person. Besides that, we all work for a living and you should be pleased to have an educated and experienced Realtor working for you. Where else can you go and get specialized services for such a reasonable cost. Realtors have to make a living also.
0 votes Thank Flag Link Wed Nov 26, 2008
The sellers agent is just that. Always have your own buyers agent. Your buyers agent SHOULD be able to convince you of their worth. If, after 3 times meeting with him, you don't feel he is going to offer you an advantage, well, I would be concerned about that. If I meet with a client 3 times, they never want to do business with anyone else ever again. I am supposed to be able to sell, or at least demonstrate, by value.

As far as commission... well, here's the thing. Check with whatever brokerage you use to make sure that the brokers work out the commission. Being that you initially saw the home with the sellers agent, there might be (I am in a different area, and definitions vary) reason for that sellers agent to argue they are the procuring cause, and therefore not required to pay your buyers agent fee as would normally be done. Not knowing specifics about "back on the market" this could be different, too, if it is a new listing agent or new listing with the same agency.

If you are in a buyer agency agreement (again, this varies by contract and locale) your agent may be entitled to a commission, whether he writes the offer or not. In other words, you might be stuck paying from your pocket either way. Since you haven't written the offer yet, there is time to negotiate this. Make sure the brokers have it worked out, tell them you are not expecting to pay anything from your pocket, and get it in writing BEFORE you make your offer that the broker is not expecting you to pay out of your pocket. If you don't do this, then it is possible that, after settlement, you could potentially be facing a claim (maybe even a lawsuit) against you for commissions owed, and then it is up to a judge to decide - better for you to negotiate it now.

As for you getting a split of the commission - at this point, if you are successful in provoking the agents to work out the commission split among themselves, I think you should leave it at at that.

My opinion, my STRONG opinion, is that a buyers agent brings tremendous value to the buyer. Sellers hate it when buyers have their own agent, but most buyers are smart enough to know they need someone representing them, so sellers concede that is the industry standard, and go with the flow because they want to sell. Again, in my STRONG opinion, that buyers agent needs to demonstrate their value to you. There are good agents and bad ones and everything in between. Make sure you have a good one. Especially if the property is a short sale or an REO.
0 votes Thank Flag Link Wed Nov 26, 2008
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