Bank rejected my counter offer for a house. do I owe the agent any commission/ money for the work that was done. I have decided not to look any others

Asked by Skibum, Minneapolis, MN Mon Mar 7, 2011

My first offer was refused on a foreclosure, I made a counter offer. that one was also refused. . I have decided I don't want to buy any other house and told the realtor that I am not going to look at any others. Before I made a PA on this house I was shown a few others. do i own the realtor any money for the other showings and the work that was done on the PA

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Aaron Dickinson’s answer
Aaron Dickin…, Agent, Champlin, MN
Mon Mar 7, 2011
It all depends on what your contract with your agent says - it is best to review that with your agent. If your agent is claiming a commission is due and you do not believe it is, contact his/her broker.
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3 votes
John Chrisney, Agent, Edina, MN
Mon Mar 7, 2011
The precise answer to your question may reside in the terms of you agency contract. Absent language to the contrary in that contract, you would normally not owe your agent compensation since there was not consummated transaction. Your agent might be disappointed by the outcome since they may have put in a lot of effort to get you to the point of writing a purchase agreement, but a failed purchase agreement is one of the common risks in our industry.
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0 votes
Mark Claesse…, Agent, Coon Rapids, MN
Mon Mar 7, 2011

My colleagues have spoken well, as you are asking a legal question to an audience that reviews legal documents all day long but yet cannot dispense legal advice. That said, you obviously know that your best way to answer your own question is to have a real estate attorney look over your contract. That will cost money, but you can also just sit down with your broker and ask them to look at the contract. They can't tell you any stories; they will report the facts.

If you don't want to continue, just treat this as you would want to be treated. Be nice. Sit down with your agent and their manager. Tell them that you have decided not to pursue another property. They may or may not want to cancel the agreement, but most likely would. Then, I would recommend offering something to the broker and agent as a "thank you" for their time. They may have showed you one house and spent a total of 5 hours on this one deal, or maybe you dragged them around for months and saw 30 homes and placed 5 offers, resulting in 60-80 hours worth of their time. Just be considerate and offer something to compansate them.

I have had very few clients every cancel their contracts with me. And I am happy for that. But the few times it has happened, my clients have been very kind and dropped off a check for my broker for $500 or $2000 to compensate me/us for the time spent. In fact, just this morning, I called a client that just lost her home to a foreclosure. She had called me with only 6 weeks left in the redemption period asking me to try to do a short sale. Unfortunately, some idiot (who was apparently a real estate agent) told her that once you have a sheriff sale that you can no longer sell the home. That is, until she got a job working for one of my past clients. I tried to sell it quick, but failed. I knew it would be a miracle, but it was way too late. Anyway, she sent over a check to my broker for $2000, which they split with me, to thank me for all of my hard work and time. The call this morning was wonderful and I just thanked her for being so kind and understanding. I told her that this meant a lot to me and I hoped that down the road a few years that I can find her a home again. So we have a great friendship going and we both care about each other. And that is what matters.

So be good to your real estate agent that put in the time!

2 votes
Shantelle Od…, , Minneapolis, MN
Mon Mar 7, 2011
Hi Skibum!

As all have said, you should check with your Buyer's Rep Contracts and see what it says regarding discontinuing your contract. If your contract is similar to most in MN, you likely have no further obligation if you choose not to make a purchase at this time.

HOWEVER, your agent, upon the contract being cancelled, will have 72 hours to render a "protected property" list to you. It will be a list of homes that s/he has shown you or that you have made an affirmative showing of interest in. If you purchase one of the homes on the Proctected list within the specified timeframe, you typically will owe the broker a commission.

The details of this should be clearly spelled out (and easily found) in the COMPENSATION section of the Contract for Exclusive Right to Represent Buyer. If this portion of the contract does not make sense to you or you have detailed questions, please let me know and I will put you in touch with a real estate attorney that my clients often turn to with legal questions.

If you would like additional information, please feel free to reach me at


Shantelle Odegard
REMAX Results
Plymouth, MN
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1 vote
Nikquisa Nunn, , Minneapolis, MN
Mon Mar 7, 2011
Only if you signed a buyers contract with a disclosed retainer fee on it. Other than If you would like to give the agent something for his time spent, but nothing is owe unless you agreed in writing in the beginning.
1 vote
Colin Simpson, Agent, Wayzata, MN
Mon Mar 7, 2011
Hi Skibum!
From what you described above, No. Read your contract where it talks about payments and commissions. If there is nothing there about cash retainers or upfront payment, you are done. I would also send the agent an e-mail or letter saying this and Thanking them for their help as well because after all it's just plain old nice!
Good luck!
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1 vote
Steele V. Pr…, , Minneapolis, MN
Mon Mar 7, 2011
Usually not. Most agents are paid only if there is a successful purchase. The exception would be if you had a buyer contract that had some kind of compensation clause.

But you might want to let the agent know that you appreciated all the help and would be happy to recommend his/her services to others. Referrals are the lifeblood of the real estate business.

Steele V. Propp
Bank Owned Homes Division
Schatz Real Estate Group
1 vote
Jennifer Hen…, Agent, Edina, MN
Mon Mar 7, 2011
Check any Buyer Representation contracts that you may have signed with the agent. It will specify if you owe the agent any commission outside of an accepted offer. Most commonly you would not owe any fees to the agent if an offer was never accepted, but each circumstance is different depending upon the agreement you had with your agent.
1 vote
Mary Jo Quay, , Minneapolis, MN
Mon Apr 11, 2011
No, you do not owe a commission on a property you did not buy. Agents get paid broker to broker after a sale. Some agents ask for a retainer fee at the beginning of a transaction which would be credited to you upon the sale of a property, that should be covered in your Right to Represent contract. That contract is for a period of time, you should have copies of everything you signed. You would owe a commission if you purchased another house that the agent showed you. If you don't want to continue the relationship with the agent, you might want to cancel the contract in writing.
Buying foreclosures can be a frustrating process for both the buyer and their agent. Buyers are hearing so much that it is a buyer's market that they believe that the owner bank will take very low offers, and are very disappointed when their offer is refused. Some of my clients have gotten incredible offers approved, but it isn't always the case. This market is still full of opportunities, don't give up so easily.
0 votes
Susan Hoffla…, Agent, Shoreview, MN
Wed Mar 9, 2011
Hi, Skibum!!!

Just wondering, why don't you ask your agent about this? Did your relationship with the agent end badly? I speak in GENERAL terms here, but USUALLY, you don't owe any money unless your alliance with the agent results in a successful closing on a transaction. BUT, if you agreed to a retainer fee, you could owe that. OR, if you cancel the contract and THEN move forward on a house the agent has already shown you, you also could owe the full commission.

I would say if you CAN'T check with your agent for some reason, consult a real estate attorney as all of these contracts could have some different terms filled in the blank spaces. All agents fill in those spaces a little differently.
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0 votes
Dallas Texas, Agent, Dallas, TN
Mon Mar 7, 2011
All is based on your buyers agent agreement . Why would you not use the same agent

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
0 votes
Brad Anderson, Agent, Maple Grove, MN
Mon Mar 7, 2011
It depends on the buyers agreement you signed, if any. You should ask the agent if you owe anything. Most of the time you do not owe, it depends on the buyers rep agreement. Good luck.
0 votes
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