After I accepted an offer on my home, the buyer's agent is demanding additional money from us to pay a higher commission to him.

Asked by brouwerpk, Palo Alto, CA Tue Apr 9, 2013

He says that the deal will be cancelled if we do not pay the additional money. What are my options?

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33
brouwerpk, Home Seller, Palo Alto, CA
Tue Apr 9, 2013
I'd like to thank everyone who replied for sharing your perspective on the situation. I posted the information I was given to work with and your replies helped me to ask more questions to better understand the situation. The issue has been satisfactorily resolved by our agent and the buyer's agent.
2 votes
Mitchell Pea…, Agent, San Jose, CA
Mon Apr 15, 2013
Scott and Brouwerpk:

Wow, it really does help to have all the facts. It sounds like things have finally worked out.

BTW to those who have been reading this thread, it is not at all uncommon for commissions to be well over 3% per side for a manufactured home transaction. The prices are generally much lower, so in order to attract agents to bring their buyers, a higher commission has to be offered and a higher commission to the buyer's agent is often a requirement. Otherwise the buyer's agent is not going to be able to feed his family even on a high volume. As a general rule in Santa Clara County where home prices are in the mid six figures to mid seven figures, a manufactured home is not going to be even noticed unless the commission to the buyer is at or above $4,000. So an older home with high space rent may sell for $50,000 with the seller paying $8,000 in commissions which translates to a 16% commission to be split as 8% to seller's agent and 8% to buyer's agent.

I hope this tidbit helps place some perspective on Scott's and Brouwerpk's problem resolution. A 3% buyer's commission, depending on the price of the home, may have actually been a bargain for Brouwerpk.

Mitchell Pearce
408-639-0211
mitchell@handsonrealtor.com
1 vote
Robert Lei, Agent, Cupertino, CA
Tue Apr 9, 2013
Ask your agent to consult with his or her broker. Let your broker and the buyer's broker work it out. Is your agent making a higher commission than the cooperating agent? What is your listing agent making vs. what is the buyer's agent being offered?
1 vote
Edith Karoli…, Agent, Winnetka, IL
Tue Apr 9, 2013
Wow.... I think we are missing a little bit of information to fully understand.

a) is your home listed with a Realtor and his/her real estate brokerage, and your home is listed on
the local multiple listing service?

b) if a) is your situation then the commission to the buyers agent is stipulated on the multiple listing
service listing that is it

c) If you are selling your property by owner, then you should have agreed with the buyers agent, ie.
the Realtor who brought you the buyer, a certain amount of commission, i.e. in writing % of
final sale price

Now what I do not understand it ADDITIONAL MONEY i.e. higher commission?
It seems to me that it is unethical at the very least for the buyers agent to threaten you the seller
to pay a higher commission or the deal will be cancelled, here is my question
DO YOU ACTUALLY HAVE A WRITTEN MUTUALLY AGREED UPON
SIGNED SALES CONTRACT, SIGNED BY BOTH PARTIES AND BOTH
PARTIES RECEIVED AN EXECUTED CONTRACT

OR HAVE YOU ONLY VERBALLY ACCEPTED THE OFFER, AND WAS A WRITTEN
COMMISSION AGREEMENT INCLUDED?

May be you want to get back to us with clear information about the actual status of the accepted
offer?

Sincerely yours,
Edith YourRealtor4Life & Chicago and Northern Illinois Expert

Working always in the very BEST interest of her clients, Buyers, Sellers and Investors alike....
And always with a SMILE 
Covering for @Properties the city of Chicago, all N and NW suburbs, the fine homes on the
North Shore, and many of the W and SW suburbs, and with her trusted Partner Agents all of
the US and worldwide properties. Edith speaks French, German, some Spanish and other.....
@Properties ---- EdithSellsHomes@gmail.com
Check out my website at htttp://tinyurl.com/YourRealtor4Life
HAVE THE MOST WONDERFUL DAY :)
1 vote
Yes, we are listed with a realtor. I haven't spoken with the buyer's agent directly; what I know is what has been passed on to me by my agent.

I'm not sure whether or not the commission is specified in the MLS. How would I look that up? I have a signed MLS standard listing form that specifies the amount of commission.

I was told that the realtor agency the buyer's agent works for will not accept a transaction that does not result in a certain percentage of commission. The split that my agent and the buyer's agent worked out is less than that percentage.

We have a purchase agreement (offer and acceptance) form signed by both parties. I don't understand if that is the same thing as an executed contract.
Flag Tue Apr 9, 2013
Richard Owens, Home Seller, Copperas Cove, TX
Tue May 21, 2013
Read your contract cafeully. Whatever the terms are should hold fit. If he forfits, then you should capture the earnest money, but even better will be to report him to his broker for agent misconduct. Don't be bullied, it's YOUR house and YOUR money!
0 votes
Rita Hutchins, Agent, Sunnyvale, CA
Mon Apr 15, 2013
Glad you gave your side of the story Scott
and yes Manufactured Home commisions are higher than real estate commissions
and yes ask for a fair commision
generally 8 to 10% because the sale price is so low

the manufactured home selling process is complicated
and requires great detail and extra work on your behalf
you are licensed under Department of Housing
and your hours and renewal of education are greater than even required by R E license
this type of sale is not for the novice
you earn every dime of your commission!
0 votes
John Juarez, Agent, Fremont, CA
Tue Apr 9, 2013
This post and all of the responses have made great reading.

One thing that we can all take away is that those of us who enjoy contributing on Trulia.com need to remember that we often get only one side of a story. We are often forced to make assumptions and fill in the blanks due to missing information. When we see the full story it is often not what we thought it was.

We have to do the best that we can with the material that we are given.
0 votes
Robert Lei, Agent, Cupertino, CA
Tue Apr 9, 2013
Glad it worked out for everyone.
0 votes
Elena Talis, Broker, Palo Alto, CA
Tue Apr 9, 2013
WOW!!! The question made an impression of a completely different situation. As always, the devil is in details...
Web Reference:  http://talisrealestate.com
0 votes
Steven Ornel…, Agent, Fremont, CA
Tue Apr 9, 2013
brouwerpk:

Congratulations, and thanks for the good news update!
0 votes
Cindy Davis, Agent, San Diego, CA
Tue Apr 9, 2013
This sounds positively unethical...contact the agent's broker at once
0 votes
Allan Erps, Agent, Pearl River, NY
Tue Apr 9, 2013
Boy oh boy am I happy not to be involved. Hope it works out!
0 votes
Grace Hanamo…, Agent, Cupertino, CA
Tue Apr 9, 2013
Hello Brouwerpk:

Sorry to hear of your situation.

After reading the information from the buyer's agent, Scott B, below, this matter needs to be resolved between you, your agent, the selling or buyer's agent and the buyers. It is both unfair and unprofessional to seek help from a forum when you have an agent who is representing you in this matter. It discredits the work of your agent who should be properly advising you, and indicts another agent's business ethics--even when done anonymously--especially when critical pieces of information, such as the lack of posting on the MLS and the previous notice of commission was made and not addressed at the time of the offer.

At this point, my suggestion is to work with your agent to resolve this matter. If the fault is your agent's (as it may well be) then the resolution may come down to a compromise in which the listing agent compensates the selling agent from his/her commissions. But, whatever the solution or compromise,it needs to be worked out with the parties involved and not here on the forum.

Either way, it should star with an apology to Mr. Brewer for posting this question without all of the facts.

Just my two cents.
0 votes
Marcy Moyer, Agent, San Ramon, CA
Tue Apr 9, 2013
Scott,
Thanks for your clarification! This has been a very lively and interesting discussion.

Marcy
Web Reference:  http://www.marcymoyer.com
0 votes
Daniel Brewer, Agent, Sunnyvale, CA
Tue Apr 9, 2013
Hi Everyone,

I’m the buyers’ agent, and feel badly how the seller feels.

As they say, now for the rest of the story.

First of all the home was never put on MLS. The seller might have signed a MLS listing sheet, but the home was never put on MLS.

My buyers wanted to make an offer on the home. Since it is not on MLS, the commissions were never disclosed. When I submitted my offer I asked the agent to call me before submitting the offer if the commission was less than 3%. We will of course take less than a 3% commission, but I need to let my dealer know first. When I received the accepted offer back, the listing agent or seller did not fill in the commission numbers. The listing agent then verbally notified me that the commission was 2%. You can imagine how surprised I was. Because there was no commission numbers filled in on the contract, I asked the listing agent to submit my commission voucher to the sellers with a 3% commission.

It should be recognized that this is a manufactured home that used a HCD form as a Purchase Agreement. The contracts are significantly different from a CARs form.

I’m sorry for all the confusion and frustration the seller has gone through. This should be a time to celebrate and not feel bad how the process has gone.

BTW - It should be also noted that I never said “we will cancel the contract”. What good would this do my clients??

Scott Brewer
408-306-5867
0 votes
Elena Talis, Broker, Palo Alto, CA
Tue Apr 9, 2013
I was reading new posts in this discussion and it seems to me that this may be a new negotiation technique. If the buyer's agent is sharing their commission with the buyer, it is effectively an attempt to renegotiate the price. In a competitive market like Palo Alto it may be a real possibility.
0 votes
The Medford…, Agent, Fremont, CA
Tue Apr 9, 2013
Great answers below ... suggest to the buyer's agent that if he (1) persists in asking for money and if, indeed, (2) he or the buyer cancels the contract as a result, he will be in breech of the Code of Ethics and you WILL report him to the DRE. Make sure you cc his broker in the response.
0 votes
Cristyle Egi…, Agent, Lake Park, FL
Tue Apr 9, 2013
Are you working with an agent? If so, they should be handling the situation. And commission is typically covered in your listing agreement, not the contract.

If the Buyer's Agent wants additional commission, I would have them request those funds from their client, the buyer.

If they walk, I would consider reporting the agent to his Broker and your state Real Estate Commission. Agents are supposed to help facilitate transactions (not blow up deals because they don't think they're making enough) and commission is supposed to be negotiable.

I don't know your situation, home, market, etc. so I won't recommend to have them walk or anything. I would look at it and decide what feels right to you (fight him on the money, pay the money, let the deal go).

I don't like to hear that an agent is trying to strong-arm a Seller into a higher commission than what they feel is appropriate or was agreed to.

Good luck!

And maybe update us when this is resolved?
0 votes
David Allen…, Agent, Sunnyvale, CA
Tue Apr 9, 2013
Refer to your contract. He can not do this. You can probably cancel the contract because of this. I would also report him to the DRE Dept. Of Real Estate. File a complaint with his local Realtors association. Or are you not telling us everything. This seems not only un ethical but un heard of. Did you have a Realtor sell the house? Oh you could be doing a for sale by owner. That could be the only reason this could happen. Re sell the house with a Realtor. Once you do that the amount the commission paid to the buyers agent is clearly on the MLS and contract. There is a lot of information missing here. Call me and we can discuss. But this is not right. Cancel contract and re sell it for more money. http://www.servingsantaclaracounty.com davidarivas@gmail.com (408) 431-7202
0 votes
Mitchell Pea…, Agent, San Jose, CA
Tue Apr 9, 2013
Brouwerk:

Wow, what luck! You can let the contract be canceled by the buyer's agent, get a larger offer tomorrow and you and your client will make more money? What's not to like about this incredibly stupid buyer's agent? Let the buyer's agent deal with an anticipated lawsuit from his client. Just make sure the buyer also signs the cancellation so you won't have to deal with a lawsuit. I'll betcha the buyer does not agree to cancel the contract, which should shut the buyer's agent up.

Mitchell Pearce
mitchell@handsonrealtor.com
408-639-0211
0 votes
Marcy Moyer, Agent, San Ramon, CA
Tue Apr 9, 2013
Brouwerk,
Since your home is in Palo Alto and prices are going up on a daily basis, I suspect if the buyer is able to cancel the contract without any penalty (which I doubt) I suspect you might be able to get an even better offer. It is very difficult for me to believe that any agent who has managed to get an offer accepted for a Palo Alto home would contribute to the deal falling apart. This agent may not be able to get another offer accepted. My guess is something else is going on here. Maybe the buyer wants out for another reason and this is the only thing they can think of to cancel the contract. Maybe they think they paid too much for your home or are concerned about the condition. If they made the offer non contingent or have already removed the contingencies they may be looking for an out.
Good luck. I am sure things will be fine for you. Having a Palo Alto home to sell makes you the most popular kid in school so revel in it.

Marcy Moyer
Keller Williams Realty Palo Alto
marcy@marcymoyer.com
DRE 01191194
650-619-9285
Web Reference:  http://www.marcymoyer.com
0 votes
Elena Talis, Broker, Palo Alto, CA
Tue Apr 9, 2013
Brouwerk, let us know how it ends.

On a side note - the only way to have power in the negotiations is to be willing to walk away from the deal. The buyer's agent hit you with that sledge hummer already. You have to be ready to match if you want to still have any control over the transaction.
Web Reference:  http://talisrealestate.com
0 votes
brouwerpk, Home Seller, Palo Alto, CA
Tue Apr 9, 2013
To answer some of your questions:
-We do have a MLS agreement which does specify the commission and the portion the buyers agent will get.
-We are in a signed purchase agreement.
-No, the buyers agent's commission is not mentioned in our signed purchase agreement.
-We are asking questions here because you should never trust just one source.
-The brokers are meeting this morning to "work it out."
-The buyers agent had stated, thru our agent, that his client is willing to cancel the contract if the agent doesn't get more money in commission.
0 votes
Lon Mapes, Agent, Redlands, CA
Tue Apr 9, 2013
On the surface this sounds very unethical. If you have a Realtor representing you, it is their responsibility to manage the situation on your behalf.
0 votes
Terri Vellios, Agent, Campbell, CA
Tue Apr 9, 2013
You have received excellent advice from these smart and professional agents.

If you have a signed listing agreement with a Broker the commission is between Brokers.

In the event that an Buyer Broker wants to negotiate a commission that has to be done PRIOR to presenting any offer. The Seller and Broker will need to agree on that first and it is not as a condition of the contract. That is my understanding.

If you do not have an agent representing you, the commission has to be agreed to up front before an offer is accepted. Did the parties present to you agency agreement prior to you signing a contract?

The Purchase Contract is between Seller and Buyer. It is not a contract of commission.

That Buyer's agent needs to discuss this with their Broker. The timing of all this is crucial on the outcome so bring in the Brokers.
Web Reference:  http://www.terrivellios.com
0 votes
Stu Carson, Agent, San Jose, CA
Tue Apr 9, 2013
Once you are in contract, the terms are set for all parties. For an agent to after the fact hold a deal hostage to their desire for more commission is a legal and ethical issue.

Where is your agent??? Why did you decide to come here to get answers and a strategy?

Without reading the contracts all parties signed, I'd be guessing at this point what's going on.

What Buyer's agents are paid on a listing is determined by what the listing agent (your agent) published on the MLS. End of subject.

Depending upon how many other offers you had and the relative strength of this Buyer compared to other Buyers, and how happy or unhappy you are with your agent, you might want to IN A LEGITIMATE contractual manner, cancel with this Buyer, relist with an agent that can actually represent you (read "earn their commission") and solicit new and given the way the market is moving very likely better offers, in terms and price.

There are 6000+ Realtors in Santa Clara County alone. As with any occupation, law, medicine, etc... all Realtors are not equal in experience, skills, training and effectiveness. Take the time to learn about a few Realtors and interview a couple. Hire the best. Why not?

Resume http://stucarson.com/resume

References http://stucarson.com/testimonials

Skills-Education-Experience http://stucarson.com/StuProfSkills


Stu Carson
408-209-0849
http://www.GetRealRealtor.com
http://www.JustMyProperties.com
0 votes
Elena Talis, Broker, Palo Alto, CA
Tue Apr 9, 2013
It is a really strange situation. Assuming that your property is in Palo Alto there should be no problem finding a replacement buyer. If you are represented by an agent and the listing is on MLS the listing agreement and the MLS should have set the buyer's agent compensation.

Can you let us know where the property is located, who represents you (do you have an agent?), who the buyer is (investor, family, developer) and if the buyer is related to the buyer's agent?
Web Reference:  http://talisrealestate.com
0 votes
Steven Ornel…, Agent, Fremont, CA
Tue Apr 9, 2013
Hi brouwerpk,

I also agree with what John has posted with one exception: contacting an Attorney at this time.

Assuming you hired a Realtor® to list your home, your Agent has direct access to CAR's legal staff. Ask your Realtor® to call the legal hotline to document and share what the Buyer's Agent is suggesting and have them provide all of your options should in fact the "buyer" moves to cancel the contract.

Once your options are identified, your Agent can also share the information gathered with their Broker for additional guidance.

-Steve
0 votes
Mike Contini…, Agent, San Ramon, CA
Tue Apr 9, 2013
From what you have written it is my understanding that you are selling your home. You have a fully ratified contract with both parties. You have an agent that has listed your home and there is a second agent representing the buyer. The agent representing the buyer is now asking for a higher commission split in order to complete the transaction. If that is correct then the following applies:

When you sign a listing agreement with the agent that listed your home you agreed to pay his brokerage a certain percentage of the sale. A portion of that commission was also designated to go to any cooperating agent that brings a ready and willing buyer to the table. In this case the buyer's agent does not agree with the amount offered and is asking for more.

Commissions are always negotiable, but that negotiation needs to happen between the two brokers. You have already agreed to a specific total amount to be paid out. If the buyers agent does not agree with the amount offered, he can work out a different split with your listing agent.

If the buyers back out due to this issue then the buyers agent has not done the right thing for his clients.
0 votes
Marcy Moyer, Agent, San Ramon, CA
Tue Apr 9, 2013
Everything John said is correct. Have your agent speak to his or her broker to deal with this. I believe that this is a problem between brokers and you may not need to get your own attorney, but don't quote me on that. Ask your agent's broker.

Marcy Moyer
Keller Williams Realty
marcy@marcymoyer.com
DRE 01191194
650-619-9285
Web Reference:  http://www.marcymoyer.com
0 votes
John Souerbry, Agent, Fairfield, CA
Tue Apr 9, 2013
Contact an attorney today.
If you have a contract, neither party can make changes to it without mutual consent. When you listed the property with a broker - assuming you did - the listing agreement specified the commission amount or percentage for your broker and for the buyer's broker. Your broker should have included the buyer's broker commission amount in the MLS listing. Unless the buyer's offer included a change to the broker commission listed in the MLS - and many of them do - then you are not obligated to pay that broker anything other than what is in your listing agreement.
Contact an attorney today.
0 votes
Ron Thomas, Agent, Fresno, CA
Tue Apr 9, 2013
Either you are mis-understanding him, or, he is doing something wrong:
Either way, I would talk to his Broker and get it straight.
You might also talk to your Escrow Officer.
0 votes
Shaukatali K…, Agent, Katy, TX
Tue Apr 9, 2013
Hello, First are you represented by a your (sellers agent) ?
If YES than let your agent know off this and it should be stipulated in your listing agreement as to what the buyers agent will be paid.

Also, talk to the buyers agent broker or office manager of this situation you are put into.
HE can not demand outside whats on your listing agreement.

Stick to your guns and GOOD LICK.

Kadibhai (Kadi)
Better Homes & Gardens Gary Greene, Realtor Katy/Houston
Phone: 832-228-7978
Fax: 281-646 1841
Email: kadi.kadibhai@garygreene.com
Web: http://www.har.com/kadi
"The highest compliment I am ever given is when
I am referred to your family & friends!"
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.
0 votes
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