Home Selling in 90065>Question Details

Yo Mama, Home Seller in 90065

Can a real estate agent refuse to show property because he/she doesn't like the commission structure offered on the buying side?

Asked by Yo Mama, 90065 Fri Oct 2, 2009

I had an agent come right out and tell me that he will steer his clients to other properties where he can earn a higher commission. Is this allowed?

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Answers

21
Patrick Thies SFR, CNC’s answer
No agent wants to work for a lower commission, but it's not about the agent, it's about the buyer. If an agent is not showing properties because of the commission, then they are not working in the best interest of the buyer.
2 votes Thank Flag Link Fri Oct 2, 2009
Ethically the answer is no. A real estate agent's obligation is do what is in the best interest of his client. If the client wants to see a property the commission splist should not be an issue. Some of the better agents do not even look at the commission split, they look to see if the property will meet their client's needs. However, in the real world I am sure some agents will not show a property beacuse of the commission split, but that practice doesn't make it right.
2 votes Thank Flag Link Fri Oct 2, 2009
I don't waste my time and money on buyers that are not commited to finding a home. If they are serious they will allow me to represent them. For me to represent them, they will need to sign a buyer representation agreement that says I get 3% commission fro my effort in finding a home. It says that if the home seller does not pay that 3%, they agree to pay it. So if the home seller only offers a 2% commision, my buyers would be responsible for paying the 1% remaining.

I work hard showing my clients all homes on the market regardless of the commission offered by the seller. I attempt to get my 3% from the sell 1st, but if they will not, then per the buyer representation agreement, I get it from the buyer.

As an agent, I deserve to get paid the going rate for me services. If you are not willing to pay my fees, that is fine... Don't call me. I don't want to waste my time with people that are not willing to pay me what I am worth. I bet you are the same way on your job, you want to get paid what the going rate is for your profession.
1 vote Thank Flag Link Thu Sep 25, 2014
rockinblu: YES! Absolutely, that is exactly what I meant!

Fiduciary duties to their client are PRIMARY to any business plan they may have for the year.

-Steve
1 vote Thank Flag Link Fri Oct 2, 2009
We are doing this constantly with foreclosures and short sales, in order to get good deals for our clients!

My personal opinion is, however, is that it is a huge mistake to short change the buyer agents. I like to pay buyer agents a higher commission.(additional +1-2%) They are bringing the buyers, after all, and are instrumental to closing a sale!
1 vote Thank Flag Link Fri Oct 2, 2009
Yo Mama I will show any house to my clients. My buyer agreement calls for 3% of the sales price for a commission. If they choose to see a home paying less they can always come out of pocket for the difference. Never had a buyer want to see a home that was paying less after they were aware but it may happen.
1 vote Thank Flag Link Fri Oct 2, 2009
A GOOD Buyer broker shows all the homes to a buyer that meets that buyers criteria and wishes. There are some buyer agents who will skip over it and losing even 1 potential buyers should be enough for you to realize skimping with a discount broker gets you discount services. A GOOD listing agent should more than cover the commission with a quicker sale at the best possible price. You can try to save a thousand on commission but lose tens of thousands in sales price.
0 votes Thank Flag Link Wed Jan 28, 2015
If you are interested in seeing any home - contact the listing agent directly. They will be more than happy to show you the home - They will be far more helpful as they are familiar with the home and the situation - they also stand to profit the most as they retain the entire commission and do not have to split it with another agent. I have purchased over 15 homes in the past 10 years and have never signed a buyers agreement or paid once cent to a buyers agent. If a buyers agent is competent they will not charge you a fee they will thank you for the opportunity to show you a home.
0 votes Thank Flag Link Wed Jan 28, 2015
Buyers and sellers have demanded more options and methods in regards to buying and selling real estate, The industry responded and as a result, the environment has become much more complex. This means a real meeting with clients to set the stage is essential.

The issue you describe can be come problem that surfaces when the buyer avoids having 'the talk' with their agent.
During the meeting the agent requested to occur at their office to have you SIGN the buyer agreement, you said, "I ain't sign'n nothing so I don't want to meet you at the office!"

Two important topics are covered in that meeting.
1. The responsibilities the agent has to the client.
2. The compensation structure.
3. Bunch of other stuff.

The agent will share, "I will show you every house on the market. However, some FSBOS, some auctions, some DIY, some flat fee brokers, some limited service brokers, will provide NO compensation to the buyers agent. I know you don't expect me to work without compensation. Are you willing to supplement the compensation to my minimal level?"

The typical response is, "I don't want to pay these additional fees, so don't show me houses that do not compensate you fully."
Agents responds, "Check this box and initial here."

This is not steering. This is simply not allowing sellers a free ride.

The agent who states they are not concerned regarding compensation is lying, or operating in the dark, or have an ambush waiting for you if you pick the wrong real estate. Even worse would be the agent who truly is unaware compensation of $1 (one whole dollar) can occur!

Buyers, when your agent says lets meet in the office to get to know each other, you really, really need to accept the invitation. It is as beneficial to you as it will be to the agent.
0 votes Thank Flag Link Thu Sep 25, 2014
The agent must honor the fiduciary responsibilites of their agreements. Period. If you represent a buyer you need to help them find the best home opportunity. But sellers need to remember that many buyers are connected to them through means other than buyer's representaive Agreements. Perhaps this is a different question. What we are seeing is that once the buyer realizes there is not a commission the want to lower the offer, thus putting the seller into fair NET price position of the market. There will be a strong trend now for buyers to consumate their own deals without representation, so we will be getting it on both sides. They negotiate for putting the unpaid "buyers commissions" into the deal to lower the net price. How are you handling that?
0 votes Thank Flag Link Tue Sep 2, 2014
For a Realtor to do this would be unethical. Believe it or not, I have been asked by a few local OC realtors to raise the 2.5%-3% commission noted in the MLS or they would not show my listing. I always politely ask for their name and then contact the DRE and report them.
0 votes Thank Flag Link Sun Oct 25, 2009
A good agent knows the market and what commissions are typically paid to buyer agents. If a buyer agent believes the services they offer are worth x%, then they can have their buyer sign an agreement upfront stating that the buyer will pay any difference from what is being offered in the MLS up to a certain %. Most buyer agents work hard for their commission and earn it. However, their client comes first and an agent who does not show a property because of a lesser commission is not working in the best interest of their client. And as things go, this house will probably be the one that works for the client and the agent should just do the right thing. If that fails, as the client, I would terimate the contract with a specific explanation in writing, go find an agent who understands ethics and fiduciary relationships, and file a complaint against the first agent.

Theresa Brown
Michael Saunders & Company
Cell: 941-350-5005
theresabrown@michaelsaunders.com
0 votes Thank Flag Link Thu Oct 8, 2009
file a complaint to who
Flag Wed Apr 18, 2012
Yo Mama,
The agent works for you. If you are not happy with the agent you can cancel the agency agreement (if you signed one) and interview potencial agents. Ask friends and family if they know of a Realtor® that treated them right.

Good luck,
Jes Sierra, B.Sc.
Realtor®
0 votes Thank Flag Link Thu Oct 8, 2009
Not legal in New Jersey. I have told buyers I would not go into certain areas after dark to show property. Told them to get another Broker.
0 votes Thank Flag Link Sat Oct 3, 2009
Hi Yo,

I agree with Keith idea I think all Broker, Agent are working togehter that mostly
of the buyers have a committment with the Broker/Agent before they will show
the property to them I know how the agent feel if they see the commission is lower
than the standard commission is, actually we are not supposed to discuss any commision that is against the rules Code of Ethics and Standard Practice, Article 8 about commission. One think that the Listing Agent
are not going to accept less than 6 % or 7% due to the fact that he is incurred too many expenses such as
Advertising expenses,MLS Due, Association Fees, etc. that is why many of us dont want reduced commission. I am a listing Agent that"s why I know how it work...So your are asking if the commision is
negotiable or not yes it is negotiable, did you see the point right now..
rules
0 votes Thank Flag Link Sat Oct 3, 2009
Yo Mama
Your profile says Home Seller. It sounds to me as though you are interviewing agents, and one of them told you one reason you should pay a certain commission amount is that agents would not be as inclined to show your home.

Assuming this is corrrect, here are some point to consider:
Your goal as a seller is to sell your home for top dollar. Therefore, you want maximum exposure.

We know that 90% of the time the buyer that purchases your home will be represented by a REaltor. Many of the responses you received below talk about a "Buyer Broker Agreement". Many buyers are under contract with a Realtor, a Realtor who knows the area, knows local values, and is a good negotiator.

So what you really need is a Realtor who can market your home in a way that will cause buyers and their Realtors to want to show it, regardless of the commission, right?

As it turns out, your area is one of my markets. I analyze the sales on a regular basis and know the market trends. If you'd like me to analyze your situation I would be happy to do so.

If you look at the Trulia link below, you'll see that the average sale price per square foot has declined 19.5% in the last twelve months. That is about 1.5% per month.

Based on your post it sounds as though you are concerned about the commission rate. Rates that I have seen vary from zero to 10%, depending upon the property type and situation. I recommend that you look at your situation from the net proceeds perspective. Figure out how much you will need to net after you pay all your expenses from selling. While you are concerned about offering one percentage point more or less, the market is going down 1.5% per month.

Good luck.
0 votes Thank Flag Link Sat Oct 3, 2009
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
Contact
I agree. A real estate agent must ALWAYS act in the best interest of his or her client. You're the boss. If you want to see a property then the agent must take you to see it. If you're the seller, the higher commission you pay the more likely your home will draw attention. It shouldn't be like that, but that's how many real estate agents are these days. Find a realtor you can trust who isn't after a pay check and you'll never go wrong.
Web Reference: http://ClovisExperts.com
0 votes Thank Flag Link Fri Oct 2, 2009
Yo Mama:

I absolutely agree with CJ, and in fact, my Buyer-Broker Agreement specifically states I will accept ANY commission offered by a MLS listing. I always place my Clients on an automated MLS Search Agent so they see ALL available properties that meet their search criteria, not a pre-selected list based on commission!

Anyone looking to buy in this environment needs to be working with a Realtor that understands their Fiduciary duties to their client are secondary to any business plan they may have for the year. I have always been of the opinion that there are two types of Agents: Sales-based and Client-based. The first focuses on sales plans (because that's what the system tells them is important), while the second focuses on the Client's welfare irrespective of time and the threat of a cancelled transaction (because that's what it means to be a Fiduciary - a person to whom property or power is entrusted for the benefit of another.)

Best, Steve
0 votes Thank Flag Link Fri Oct 2, 2009
Yo -

If you read the agency disclosure it clearly states there is a fiduciary duty between agent and client. "In such a relation good conscience requires one to act at all times for the sole benefit and interests of another, with loyalty to those interests." An agent would not be acting in a buyer's interest by avoiding listings due to a commission gain by the agent.
0 votes Thank Flag Link Fri Oct 2, 2009
No. an agent cannot exclude any properties, however, I know agents that will not show reduced commission homes so it does happen I am sorry to say....
0 votes Thank Flag Link Fri Oct 2, 2009
Go find another agent that will show you all houses that meet with YOUR requirements. If you are under contract with your agent then set them straight. He/she is working for you and without you, they make nothing.
I would never NOT show a house because of commission. I look at that after my client finds the house they want. Do I like it all the time, no but that's the way the cookie crumbles.
0 votes Thank Flag Link Fri Oct 2, 2009
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