Home Buying in Iowa>Question Details

Savanna, Home Buyer in Iowa

Does the real estate agent I've been working with deserve a commission, for the last 4 months, if I found the?

Asked by Savanna, Iowa Sat Apr 18, 2009

property that I am interested in buying but the property has a flat-fee broker who already states that the seller will not pay the buyer's realtor commission? She has not shown us anything in the last 3 weeks but there's also nothing in the market that we like right now. If she does deserve a commission, how much? We have become friends and this situation is now very awkward.

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Under the circumstances, she should be receptive to a lower commission... (maybe the seller would kick in 1% and you might kick in 1%?).

Even though she didn't find you the house, she did accompany you on the showing... has the seller said that they would NOT pay anything toward the buyer's agent commission??
3 votes Thank Flag Link Sat Apr 18, 2009
Alan May, Real Estate Pro in Evanston, IL
MVP'08
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a couple of questions

Do you have a signed Exclusive Buyer's Agreement with the Realtor?
Did she show you this property?

If the answer to these questions is "no"... then you probably don't owe the agent any commission. Yes, it can be awkward, because she's been working hard for you for the last 4 months, and now, if you buy this house, she will not be compensated.

But that's the nature of this business. If you'd like to have her involved, and help you with the process, negotiation, inspection.. etc... you can opt to pay her fee... and you can discuss that fee, and negotiate it with her. That might be the best of both worlds.
2 votes Thank Flag Link Sat Apr 18, 2009
Alan May, Real Estate Pro in Evanston, IL
MVP'08
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Savanna,

As my grandfather always used to say a word to the wise is sufficient.

Take a look at what Shar had to say, she is right on target...
This is part of the point of my original post, you NEED representation throughout what is the most involved and difficult part of a home purchase.

You also need to know that I have been told by numerous Flat Fee/Discount Brokers that their client wont pay a fee to the Buyers Agent.... But, when I have shown up with an agreement of sale, the story changed....
Same thing on For Sale By Owner homes...they don't want to pay a fee, but they usually will.

I have sold dozens of homes this way this since 1993, each time still getting paid by the seller even after having been told otherwise before hand (and while negotiating the price down). With only one occasion where the fee was actually paid by my Buyer. But, that was an all together different scenario regarding a home that was not even on the market.

You can take the sellers broker at his word and let him handle everything....
but, remember.... "HE REPRESENTS THE SELLERS INTEREST"....
His Goal is to help the SELLER GET THE BEST DEAL FOR THEIR HOME........AND
although he is a FLAT FEE or DISCOUNT Broker.........

He may be trying to protect a BONUS FEE!.....yes, sometimes there are BONUS FEES!

You need someone who will protect your interest?

Having said all this, it is hard not to notice that you spent an entire 4 months with this agent and looking at the post It appears you had no dissatisfaction with her until it became a matter of money. You did say... She has not shown us anything in the last 3 weeks but there's also nothing in the market that we like right now.
of course what is on the market is not in her control, but if she has kept you up to date...she is on the job.
If you wanted to ditch her you should have done it long...long ago....again, it is hard NOT TO NOTICE, the question of ditching her or DEVALUING HER SERVICES only came up only once there was a matter of money at hand...

Go where your conscience takes you....

Regards,
Gary Byers

RE/MAX 1st Advantage
Mechanicsburg, PA 17050
0 votes Thank Flag Link Sun Apr 19, 2009
I mentioned in my earlier answer that the broker splits with the agent. The way some brokers work if she were to get 1.5% it would all go to the broker because you may choose to cut your money but not the brokers.
Talk to her tell her she has done a poor job and now you want this poor performer to do the hardest and most detailed part of the transaction for a less than normal commission.
I would take it as a slap in the face if someone did it to me but on their behalf I would talk to my broker. I would tell him that my client feels that I have performed below average and now they want me to negotiate and take the closing the home that they love.
By the way if you saw the property with the listing agent this all may mute because of procuring cause.
Web Reference: http://www.Find1Home.com
0 votes Thank Flag Link Sun Apr 19, 2009
Savanna,

My two cents...

I tell people all the time that when we find THE house is when my job really kicks in. Finding the house (while time consuming and not always easy) really is the "easiest" part for the Realtor, in my opinion. Then, that's when my experience goes to work. The representation from the contract writing and negotiation phase, through inspections, repairs, appraisal, lenders, title, escrow, closing and everything in between is really what your agent is getting paid for. It is so much more than "the paperwork". The ability to negotiate in your best interest and take on the legal liability is a HUGE responsibility.

In my opinion she has earned a commission. Will she take less than 3%? Probably, when faced with the alternative. Should she...I don't think so.
0 votes Thank Flag Link Sun Apr 19, 2009
You worked with an agent for 4 months that was doing a c- job and didn't show you homes you wanted to see?
0 votes Thank Flag Link Sun Apr 19, 2009
We would be happy with giving her the full commission.................if she was doing an A+ job. However, my husband has not been very confident in her work, and as her friend now, I unfortunately have to agree with him to a certain extent. If you asked him he would give her a C-, if that high. My husband and I have both done our research, my husband has been researching the area for years now, and for some reason our reasearch sometimes contradicts her research. She does not have many years in this industry but she sold her enthusiasm to me when I met her so that's why I decided to work with her. However, she has not been able to lock down our interests. She's been trying to show us property that we have said we definitely do not like (we've already seen the listing on the internet before she informs us). And 75% of the homes that we have seen, I have found on my own and called her to tell her that I would like to go see them. This condo that we are interested in buying, I also found. As I have said before, the sale is represented by a flat fee broker who has already stated that his client will not pay for the Buyer's realtor commission. So my husband wants to know why he has to pay thousands of dollars for work he has not seen. He agrees to pay her something (1.5%) for her "efforts" and the paperwork she will be doing. I would like to know, how offensive will it be to offer less than the standard commission?
0 votes Thank Flag Link Sun Apr 19, 2009
It's pretty clear that you believe she deserves a fee for her services. However, your are troubled by the prospects of providing her with the full fee for services.

Our recommendation is to confront the customer directly with your delema, asking her what she feels is fair. Before asking the question, however, you should already have a number in mind that you consider acceptable. Once she provides you with her thoughts you can then counter with yours. Hopefully you will arriva at a number that is agreeable to both of you.

Note: It's not about what you have seen in the past 3 weeks......because she is still monitoring the market relative to your needs. She certainly has time invested prior to this and will have responsibilities as you move forward with the purchase.

Good luck
0 votes Thank Flag Link Sun Apr 19, 2009
Lets see on a normal transaction the Broker and the agent split the buy side commission so on a 100000.00 sale the agent that is working for you gets 1500.00. Then figure about 38% for Federal, State, and self employment taxes so that brings it down to about 1080.00 net on 100000.00 of volume. How much work with you and preparing things for you has she done?
Web Reference: http://www.Find1Home.com
0 votes Thank Flag Link Sun Apr 19, 2009
I wonder how good od friends you are if you are asking this question. Sher certainly deserves a commission...more so for protecting you in the transacion of the home you are about to purchase.
Web Reference: http://www.cindihagley.com
0 votes Thank Flag Link Sat Apr 18, 2009
The Hagley G…, Real Estate Pro in Pleasanton, CA
MVP'08
Contact
If you have to ask, then you probably already know the answer....

Your agent has worked hard for you, including more behind the scenes work than you might imagine.
But, putting that aside, do you really want to buy a house without having someone on your side? As a Buyers Agent, your agent can provide "RELIABLE COMPS" (not outdated internet scavangings) to insure you DO NOT OVER PAY. And that Flat Fee Broker has probably never even seen the home, many are just internet based advertisers, and many others are not even Legally Licensed to sell real estate "they only advertise real estate".

Given this scenario you need someone to protect your interest..

So, you can hire an attorney or you can pay the agent. (Who's already been "working for you".)

If you hire an attorney, "do your homework first" because if he/she doesn't specalize in real estate you might have a problem. I've seen several cases where a personal injury attorney or some other stepped out of their routine practice and tried to do a real estate transaction thinking it wouldn't be a problem.... What a mess!

And the buyers ended up paying just as much for that POOR representation.


Best of luck.

Sincerely,
Gary Byers - REALTOR®

RE/MAX 1st Advantage
Mechanicsburg, PA 17050
717 591-5555
0 votes Thank Flag Link Sat Apr 18, 2009
Without a written agreement, unfortunately we don't have much of a standing in getting paid for our work. It appears that, when the situation changes and money actually enters the picture, buyers who once valued the work their agent was doing all of a sudden realize that the agent really wasn't doing 'much' work lately. I would imagine that the only reason you feel comfortable buying this house now is because she has showed you other houses for the last four months and you are now educated. Nothing has caught your eye in the last three weeks out of that 4 months so she doesn't deserve to get paid ? Work it out with her if you value her as a person. maybe you can drum up a few referrals for her in the near future.

We faced a similiar situation buying our first home - well before I entered real estate. Our agents showed my husband over 50 homes when he saw a for sale by owner home that he wanted to buy. I was out of the country at the time so he called me and one of our first topics that we discussed is 'how do we scrape up the 3% to pay her if the seller won't. She had not had my husband sign an agreement but it never entered our mind that she didn't deserve to get paid.
0 votes Thank Flag Link Sat Apr 18, 2009
With a question like this I always like to use role reversal. How would you or your husband like to work four months for free? And though you may not know how many hours your agent has put in on your behalf, it's often many more than you'd think. You probably have already worked out this situation by now but if it were me I would insist that the seller allow your agent to be compensated. You usually don't want to be represented by the seller's agent- it's almost always a difficult situation. You need your own buyer's agent who represents you first and foremost. I as an agent would be willing to forego my commission if it were my buyer's dream home and it wasn't possible for me to be paid....but I'm pretty sure I'm in the minority with that thinking. One thing you can do is definitely send your agent other referral business!
0 votes Thank Flag Link Sat Apr 18, 2009
Just 2 cents from a non-pro.. You say you've become friends and intend to use her in the future. (I assume because what she did do you liked) There seems to be a suggested trust and comfort zone established.

I think perhaps that your relationship where you need to have a friend/comfort with agent/want to use again talk is the issue not really the amount paid. Lay it on the table. Relationships are multi-faceted and differ in every situation, the big picture is the one you're painting so don't get lost in the details of the sunset.

Talk with your friend
Dunes
0 votes Thank Flag Link Sat Apr 18, 2009
By the way, we do not have an exclusive Buyer's Agreement.
0 votes Thank Flag Link Sat Apr 18, 2009
Thank you for your help. No, she did not find the home. I informed her about this flat-fee listing and she and I both spoke to the agent and the appointment was finalized through me and we went to meet the seller and his agent to see the property. She has mentioned getting 3% of the sale from the seller or from us in her offer proposals. Although my husband questions her "hard work", I have now become friends with her, so we are willing to pay her something for the paperwork but definitely not 3%. How receptive are realtors to a lesser commission? Say 1.5-2%? We are also planning to lease/sell the condo in about 2years when we find a more satisfactory and permanent living space (i.e. a house), so she will be promised that transaction. I just feel awkward offering less commission.
0 votes Thank Flag Link Sat Apr 18, 2009
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