We're in escrow. Our agent and the buyer's agent are from the same office. May I renegotiate commission now? Should agent have pointed?

Asked by An, Colusa, CA Sun Oct 4, 2009

this out? Okay, so I plead "uninformed." It wasn't 'til someone I mentioned this to said, "Great! So, are you getting a discount on the commissions?" that I even thought that might be possible. The more I think about it, the more it seems like a reasonable request! I also feel like our agent should have brought up renegotiation at the time he mentioned that the buyer's agent's office was down the hall from his.

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Deborah Brem…, Agent, Los Angeles, CA
Sun Oct 4, 2009
BEST ANSWER
Hi An,
Yours is a very good question. The Broker (let's call them ABC Realtors) is the umbrella under which the Listing Agent (LA) and the Buyer's Agent (BA) work. For the privilege of working at ABC, the LA and BA pay anywhere from 10% to 50% of every dollar they earn, and ABC provides an office, a BROKER'S license, staff, advertising, marketing, supplies, management and oversight, and in many cases, in house counsel. All of those things are to benefit you, the client.
When you agreed to list your home, you made an offer of a fee to the Listing Broker, and you made an offer to be paid to the Cooperating Broker. (Usually 3% and 3% in California, but not fixed by law). Your agent listed the home under those terms, and offered it in the MLS. It was a contractual offer.
Had the Buyer's Broker and Agent not been ABC, but rather XYZ, you would happily (I presume) paid the fee you offered. All parties performed as you expected, and you got the desired result, a sale.
The fact that ABC is the Broker of Record for the LA and the BA in no way mitigates their cost, liabilities, etc. They have the same responsibilities to the Buyer and the BA as XYZ would have, and as such, deserve their fee.
From another point of view, think of it this way: you hired ABC and your LA because, to you, they were the best person for the job. How fortunate for you that you got a BA with the same level of expertise and professionalism standing behind them!
Good luck, and thanks for the question.
Debbie Bremner
The Bremner Group at Coldwell Banker
310-571-1364
Facebook: http://facebook.com/DebbieBremner
Twitter: http://twitter.com/DebbieBremner

Web Reference: http://www.TheBremnerGroup.com
2 votes
Deborah Brem…, Agent, Los Angeles, CA
Sun Oct 4, 2009
PS An;
You ask when I would have pointed all of this out.
My standard is this:
When I go on any presentation, be it a listing presentation or a buyer presentation, I will have already dropped off all blank documents 48-72 hours in advance, so my client has read everything. I ask them to keep a yellow pad and paper with them to jot down questions, and feel free to mark up the blank documents.
Then, when I meet with my clients, I start with a Realtor disclosure, then an agency disclosure, then a dual agency disclosure. We discuss what each means, and I explain, just as I did below in my answer, that when they hire me, we are making an offer tho a sub agent (a cooperating Broker) as well.
My belief is that clients should be well informed, and that includes reading every document they sign.
Good luck, and thanks for the question.
Debbie Bremner
The Bremner Group at Coldwell Banker
310-571-1364
Facebook: http://facebook.com/DebbieBremner
Twitter: http://twitter.com/DebbieBremner

Web Reference: http://www.TheBremnerGroup.com

Web Reference: http://www.TheBremnerGroup.com/blog/
1 vote
DougT, , Los Angeles AFB, CA
Wed Oct 7, 2009
each individual should receive a piece of the commission, however, in this case, the broker should heavily discount the broker fee...that's why people dislike your commission structure...
0 votes
An, , Colusa, CA
Tue Oct 6, 2009
Thanks, Debbie! That's pretty much what I thought...though I wasn't sure if 'dual agent' was a real term or something maybe I imagined! Indeed, it seems like a very bad idea to try to be both the buyer's and the seller's agent! Wouldn't your hands be tied when it came to doing any negotiating at all? My word, you'd have to be so careful to not open yourself up to liabilities from either side - with just a casual slip of the tongue, you could talk yourself right into a lawsuit! I can only imagine it working out if both the seller and the buyer had found one another on their own, had agreed to a price both were ecstatic with, and they just needed someone to take care of the paperwork for them! Once any sort of negotiations were needed, wouldn't it be pretty much impossible for one person to do? Yikes! I appreciate you taking the time to educate all of us non-realty-types! My thanks to everyone who's added to this thread...well, with the exception of the person who called me an ingrate! I could have lived without that! (Oh, that may have been over on Zillow!) This has been a very interesting and informative forum. Thank you, everyone.

And to our Agent, who I'm sure has been following this thread:

"You've done a really good job on the sale of our house. I hope you didn't take offense that I reached out to the Trulia community for information! We wouldn't 'short' you any of your commission - you worked hard for it! This has been a complicated sale in many ways, and you've done well! Thank you! (However, we are considering talking to your broker about his/her share.)" :)
0 votes
Deborah Brem…, Agent, Los Angeles, CA
Tue Oct 6, 2009
Hi An,
Dual agency is a description of the set of fiduciary duties due a client when a Broker of Record in a transaction is the same for both a Buyer Agent and a Listing Agent. Broker ABC is the Broker of Record for two agents, either within the same office or within two separate offices. Your situation is a perfect description of a "Dual Agency", in that the Broker of Record has a dual set of fiduciary duties due to the clients in the transaction.
The term "dual agent" is a common misnomer used by the general public. It is usually used to describe a Listing Agent who brings his own buyer to the seller, and represents both parties. Broker ABC is the Broker of Record for the listing agent who is also the Buyer's Agent. Dual agency occurs, and sometimes the public will refer to the agent as a "dual agent". In fact, he is just an agent working in two capacities. (For the record, not a good idea- too many possible conflicts of interest.)
I have posted many times in my blog about the reasons a Buyer needs to have their own agent. I've included a link below to one such post. Let me know what you think.
There is really no such thing as a "dual agent." (unless your agent is a conjoined twin!)
Thanks for the question.
Debbie Bremner
The Bremner Group at Coldwell Banker
310-571-1364
Facebook: http://facebook.com/DebbieBremner
Twitter: http://twitter.com/DebbieBremner

Web Reference: http://www.TheBremnerGroup.com
0 votes
An, , Colusa, CA
Mon Oct 5, 2009
Thank you...tell me, though, is there a difference between 'dual agency' and 'dual agent'? Or is there even such a thing as 'dual agent'? I know it could happen that one agent may represent both the buyer and the seller, and that seems to me to be a mighty fine line to walk! How could the agent do any negotiating? But that's what I thought would be called 'dual agent'!
0 votes
Matthew Bart…, Agent, Glendora, CA
Mon Oct 5, 2009
Hi An,

FYI, if your listing agent works out of the same office as the agent that represents the buyer than you're being represented by a dual agency. The reason being is your Listing Agents Broker owns the listing and both Agents work under the same Broker. This falls under the Disclosures that were mentioned below and this should have been made clear to you. If you have any further questions please let me know. Thank you!

Matt
0 votes
An, , Colusa, CA
Mon Oct 5, 2009
Hi, Matt: I want to thank you for taking time to respond to my inquiry. However, this isn't a situation where my agent is now representing both me (the seller) and the buyers. It's a situation where the seller's agent and the buyer's agent (2 different guys) work out of the same office for the same broker.

But I do appreciate learning when the various disclosures are to be presented under different circumstances. Thanks!
0 votes
Matthew Bart…, Agent, Glendora, CA
Mon Oct 5, 2009
Hello An,

To answer your question as to when your agent shoud have disclosed this information. The first time is when your agent first met with you to list your home. The very first form you should have been given is a form titled Disclosure Regarding Real Estate Agency Relationships. At this point your agent should have only circled Seller's Agent, meaning they were only representing you and your interests at that time. However, they should have informed you at that time as well that when an offer is received and presented they could actually be representing both parties.

Once your agent received an offer, prior to presenting said offer to you your agent should have given you a new form titled Disclosure Regarding Real Estate Agency Relationships. This is the second disclosure only this time your agent discloses to you that the offer they are presenting is an offer from a buyer who is represented by an agent from the same office that you have listed your home. This means that your agent will be representing both buyer and seller in this transaction if you accept said offer. (NOTE: If your agent has multiple offers to present to you they must have a separate Disclosure Regarding Real Estate Agency Relationship form for each offer)

The third time this information is disclosed is on page 7 of 8, Section 27, Sub-Section C of the Residential Purchase Agreement (Form RPA-CA) or otherwise known as the buyers written offer. You should see both agent names and the agency they represent listed along with the box for both buyer and seller checked under each category.

Copies of all forms should be given to you for each offer that you receive. I hope this answers your question. Good luck!

Matt
0 votes
Maria Morton, Agent, Kansas City, MO
Sun Oct 4, 2009
An, agency and commission are two of the most difficult concepts for people not in the real estate business to conceptualize. Deborah Brenner's explanation, below, is very good. Also keep in mind that the broker processes both sides on this transaction since both the buyer and the seller are represented by agents in their office. E&O insurance is covering both agents and the broker. Both agents are using the office supplies and equipment in the transaction. You are getting what you and the listing agent agreed to so there is no reason for you to be unhappy. I understand that you want to keep as much money as you can and it sounds like the agent you chose to list your home has allowed you to do just that by selling your house quickly and cleanly. Congratulations on your sale!
0 votes
Jeffrey White, Agent, Beverly HIlls, CA
Sun Oct 4, 2009
This is a good example of why all of us realtors need to disclose and explain the way comissions work to the sellers and buyers. Otherwise they come up with all sorts of crazy notions that can usually be easily avoided.

Also, I never refer to it as a "double commission", it is a full commission if you represent both sides. In this case the brokerage is receiving commission from both sides, but the are also providing offices, desk space etc for both those agents. No one realizes that even if there is only one agent there is work to do for both parties. It's twice the work! Anyone who has had dual agency on a sale is aware of the extra work and professionalism required.
0 votes
An, , Colusa, CA
Sun Oct 4, 2009
Gee. I thought I'd mentioned that I have no problem with the agents receiving their share of the commission...and that the problem I had was with the brokerage receiving double commission off of the sale. Maybe I didn't...why, no, there it is...just below your "shocking" response. I think it's shocking that professionals in any business think the people who hire them should be as aware of the "rules" as they are. I find it shocking that a Realtor would find it odd that a home-seller would want to keep as much of his/her equity as is possible. We aren't selling our home just to provide a source of income for an agent...though we will be providing a damn good source of income for both of these agents...and their broker. So, please, don't accuse me or any other seller of trying to cheat an agent out of their commission! I find that accusation shocking and offensive!
0 votes
Dyanna, , California
Sun Oct 4, 2009
I always find it shocking that sellers always seem to think that we don't deserve the commission we negotiated from the inception of the listing. If your boss came in and said that he didn't think you worked hard that day and he wanted to give you half a days pay, what would you say?

I am glad to see that other agents stand behind each other; maybe you should stand behind your agent since he/she is representing you to the best of their ability. I am hopeful that you will drop this and not offend your agent.
0 votes
An, , Colusa, CA
Sun Oct 4, 2009
I don't have a problem with each agent receiving their share of the commission, but I guess I do have a problem with the broker getting double commission off of my house! And I still feel that my agent should have mentioned this, even if it was only to point out whatever might be in the listing agreement pertaining to both agents being from the same office (which I have yet to find...I see something about one agent being both the buyer's and seller's agent...but I haven't found anything about two different agents being from the same brokerage.). When would you have pointed out this particular situation to a client? Or would you have left it up to your clients to be completely informed on their own?
0 votes
Dallas Texas, Agent, Dallas, TN
Sun Oct 4, 2009
Although from same office do you understand each agent is in business for themselves. We have 600 agents in our office top in Dallas Area we don't ask deals from each other.

Same if you shopped at store which has multi locations.

National Featured Realtor and Consultant, Texas Mortgage Loan Officer, Credit Repair Lecturer
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0 votes
Don Tepper, Agent, Burke, VA
Sun Oct 4, 2009
May you renegotiate the commission? No.

You have a listing agreement, and that was agreed upon upfront. Besides, brankly, the other agent (as well as yours) deserves the commission. They both were involved in the sale of your house.

Disclosure of dual agency? When you signed your listing agreement, there probably was an area on there explaining that the situation could occur and how you wanted it handled. (There is on the forms I use.) Check your listing agreement. Keep in mind, though, that your agent had a fiduciary duty to represent you. The other agent had a duty to represent the buyer. And from your question I don't see any suggestion that either of you was misrepresented in any way.

Nevertheless, talk to your agent. I don't see any basis (or any reason) for you to ask for or expect a lower commission.
0 votes
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