I am selling my home in NYS and we are close on an offer--$5K difference. I ask my broker if she would consider taking a commission for 1% less

Asked by Acg845, Haverstraw, NY Thu Oct 22, 2009

that we had agreed upon. She said no because it is llegal". I can understand that it is a contractual change but I cannot believe it is illegal if the parties to the contract are in agreement. What's the right answer?

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24
J R, , New York, NY
Wed Oct 28, 2009
Other than the Internet access, my agent didn't seem to do much in this transaction. In the six months I had the house listed she never had a personal showing. There were five open houses and there were NO attendees for two of them. Even with this offer, I came down $35K (from a price point she told me was a realistic) and the sellers had only come up $10 leaving us $5K apart from my absolute floor....and instead of fighting for the last $5K for me,she told me how this was a young couple and first time buyers and I should come down some more, after all "it's just $5K". When I suggested we should end this relationship, she suddenly found some fighting spirit. I also now have a back-up offer that I ended up getting in place myself with another agent..she would have lost it had I not gottten involved..
~~~~~~~~~~~~~~

Part of what I consider my job is not letting my clients know how much work I am doing in the background. One of my buyers, who dumped me when they were outbid for a property, will never know I was on the phone for about 3 straight hours trying to get their offer accepted. The stress level I had on that transaction, which never happened, was phenominal. I was paid $0 when they bought from someone else. Negotiations are very stressful, as is holding a deal together from the time an offer is accepted. Such as I'm sure this particular negotiation was for your agent. For pete's sake, you have a buyer, you're going into contract, and all you can do is badmouth your agent?!

Just FYI, as the listing agent, I rarely show your house myself. Most buyers find a house with thru an agent. Your listing agent may be working with 3 active buyers at a time. Their job is to tap into the buyers every other agent has, and they do that by networking, sending out emails to them, etc. As a listing agent I am not able to simply regurgitate a buyer out of the blue.

It's a shame that your agent chose to lie and say it was "illegal" to change the commission rate. Apparently she just didn't have the guts to tell you no. I hope she grows a set and memorizes what I posted previously: "This negotiation is between YOU and your buyer. We negotiated my commission when you signed the listing contract."
2 votes
Voices Member, , Benton County, OR
Tue Oct 27, 2009
"You talkin' to me?"

I think the proper way of putting it would be we were "talkin' about you" ; )

It is now a proven fact successful FSBO sellers have at least "half a brain" and I promise to commit myself to proving they also possess a second half just waiting to be brought to life by acquiring an RE license.

Dunes is on the job................
2 votes
Joan Braunsc…, , Morris County, NJ
Wed Oct 28, 2009
Acg845,
I am truly happy that your house is on its way to being sold. Things have not been kind to sellers these days and selling a house is stressful under the best of times.
I am sorry that you were not happy with the services your agent performed. It is very disappointing that she felt the need to "stretch the truth" about the legality of a commission reduction and I agree with you, some agents are more deserving of their pay than others, just like in any profession.
To be fair to your agent, there are only so many buyers out there and a lot of inventory. An agent cannot just pluck a buyer from somewhere that just happens to be looking for a house like yours in your price range. Buyers tell their agents what they are interested in.
If buyers were not attending your open houses, the #1 reason is price. Remember, there is not a huge pool of buyers and you are in a competition. You seem to feel that it was priced too high but sellers determine price. Agents can only advise. If she showed you comparables (an absolute necessity), you could see for yourself what has sold at what price and what your present competition is.
Again, I am glad that it has worked out for you and I wish you the best of luck.
1 vote
Acg845, Home Seller, Haverstraw, NY
Wed Oct 28, 2009
Thanks to all who responded. My sense was that this transition was basically a contract and so contracts can be renegotiated. That's why the answer from my agent seemed disingenuous at best. The buyer came up $5K so it looks like we may have a deal. The binder is signed the inspection is set for today.

I would like to clarify a point some of the responders focused on. Other than the Internet access, my agent didn't seem to do much in this transaction. In the six months I had the house listed she never had a personal showing. There were five open houses and there were NO attendees for two of them. Even with this offer, I came down $35K (from a price point she told me was a realistic) and the sellers had only come up $10 leaving us $5K apart from my absolute floor....and instead of fighting for the last $5K for me,she told me how this was a young couple and first time buyers and I should come down some more, after all "it's just $5K". When I suggested we should end this relationship, she suddenly found some fighting spirit. I also now have a back-up offer that I ended up getting in place myself with another agent..she would have lost it had I not gottten involved..

I feel the same way about real estate agents as I do about Wall Street executives. When they deliver, they deserve the money they get. When they don't, what exactly am I paying for?. It's basically a a high risk/high reward business.
1 vote
Joan Braunsc…, , Morris County, NJ
Tue Oct 27, 2009
On my first negotiation, there was a difference of something like $3000. The listing agent asked me if I would help the deal go through by splitting a commission reduction. First of all, my broker would not have necessarily agreed with this. More importantly to me, I already was going to have to pay a 25% referral fee on a house that was on the low end of the market. If you take into account all the expenses accrued to date that all new agents have to deal with, I would not have made any money on the deal.
Guess what? They came to an agreement because somewhere along the line, the buyer and seller realized that for the deal to not go through for that little amount of money(in comparison to the whole amount of the transaction) was ridiculous.
The thing that bothers me is that an agent apparently lied. Very uncool.
1 vote
Voices Member, , Benton County, OR
Tue Oct 27, 2009
Debbie
The suggestion that you or JR are "half-brained" will never be made by me as I believe you are both fully equipped in the brain department...

I am wondering though if two of my half-baked opinions may be equal to a whole legitimate opinion. (I'm not very good at that Math stuff)

To stay on Topic (Good one coming from me!!!)

Acg845...Don't think it would be illegal if the parties are in agreement but The parties do not seem to be in agreement.....Why would you expect them to be?
Maybe the appraiser or the title company or the inspector or the lender will take less for their Services than you agreed to pay.....ask them.
1 vote
Debra (Debbi…, Agent, Livingston, NJ
Tue Oct 27, 2009
So Dunes.........let's see...if you put those 2 half-brained agents together......the result will be an agent like JR or Me -- a full-brained agent. !! (well., in regard to me, on good days, that is !

Good afternoon Dunes...........
1 vote
Voices Member, , Benton County, OR
Tue Oct 27, 2009
For JR & Debbie

"Anyone with half a brain can "find a buyer" for a home."
http://www.trulia.com/voices/Home_Selling/If_I_find_a_buyer_…

IMHO those people using/paying Agents to help them find buyers should consider this fact ...........

Find a "half-brained Agent to locate a buyer and then find a more than "half-brained" Agent to do the paperwork...LOL

According to National Statistics many Agents are qualified to help you find a Buyer ; )

Good morning JR and Debbie
Armchairtroublemaker, Dunes
1 vote
Debra (Debbi…, Agent, Livingston, NJ
Tue Oct 27, 2009
JR ..so true.........and that "net listing" commission idea IS illegal ... ..although many don't seem to know it..(is it illegal all over the country?)........but, you made me laugh, as I have had the same thing happen.......a seller thinks they are being so generous when offering the amount over the selling price as the commission......when that "selling price" is a pie in the sky number!
1 vote
J R, , New York, NY
Tue Oct 27, 2009
It's funny how when a seller gets over askimg price, they never offer to increase the commission! (I just had to throw that in!)
~~~~~~~~~~~~

Although I have been told by potential sellers "I want to NET a million, anything you get over that you can keep". This on what was at best a 600,000 house. For any of you sellers out there with lightbulbs going off over your heads, net listings are ILLEGAL.
1 vote
Debra (Debbi…, Agent, Livingston, NJ
Mon Oct 26, 2009
Rock - I liked and agreed with your answer, so I gave you a thumbs up (aren't I sweet)..oh, that was your answer 3 answers ago in case you're wondering.............

Acg........the right answer is...........it's not illegal to renegotiate the commission...but, don't be surprised when you're turned down. In addition, while it's not illegal, it may be against the policy of the agent's company to cut the commission.

It's funny how when a seller gets over askimg price, they never offer to increase the commission! (I just had to throw that in!)

Good luck Acg.........split the $5000 with the buyer, and make the deal!!!
Good luck..........
1 vote
J R, , New York, NY
Mon Oct 26, 2009
Sorry Rock, I didn't mean to direct that comment at you. I will say though that if I had a 7 figure home I was selling, I would not bet 5,000 against a 7 figure number. I'd just come down.
1 vote
Pascual Paul…, Agent, Bronx, NY
Fri Oct 23, 2009
It is not illegal, but if your boss had a slow week and didn't make as much as he expected that week, would you be willing to take less pay?
Web Reference:  http://PaulMVPteam.com
1 vote
Dan Chase, Home Buyer, Texas City, TX
Thu Oct 22, 2009
I am not a lawyer, I am not a realtor. But I do believe that contracts can be changed if BOTH parties agree to it. That is a lot of what happens during the whole negotiation process. You make an offer ( contract) they modify it and make another offer (contract). The contracts ( called contingency agreements) can change anytime up until closing.

It sounds more like the realtor wants the extra commission. When you began the whole selling process the realtor could ahve agreed to take 4 or 5% instead of 6. It is a choice. I am willing to bet they still just want to keep the extra commission. But on the other hand, the realtor would have to eat the whole 1%. It is unlikely (although possible) that BOTH real estate agents would take a 1/2% off their commission. That is what it would take. Agreement by BOTH realtors. Plus it might be necessary to involve the agencies involved as they get their cut also.

There is a much more painful option though, wait a year or so. See prices drop even more. You will lose the $5k and more.

http://www.dailyfinance.com/2009/10/21/housing-prices-foreca…

http://www.businessinsider.com/the-housing-chart-thats-worth…

Consider it all. Then make your choice. For now, I am waiting to buy a bit longer. Why waste all that money when I can do better in a little more time?
1 vote
Anna M Brocco, Agent, Williston Park, NY
Fri Nov 27, 2009
Would you take a pay cut for a job well done or would you be insulted?
0 votes
Mack McCoy, Agent, Seattle, WA
Wed Oct 28, 2009
We're glad you got your deal together.

- When they deliver, they deserve the money they get. When they don't, what exactly am I paying for?
Well, when they don't perform, you don't pay them at all, do you?

Absolutely, when a broker promises you that they will execute a particular marketing plan, you have every right to insist that they perform. But, generally speaking, the listing contract really only specifies that the broker will be paid a fee if the house sells.
Even if they don't create flyers, get it on Yahoo!, or a zillion other things - as long as they fulfill the terms of the contract, and there's a sale, they've earned their fee.
But there is a correct answer to your question - it is not illegal for a broker to reduce their commission. (It is, apparently, a felony for home sellers to tip the broker for going above and beyond.)
0 votes
nouk haschka, Agent, Edina, MN
Wed Oct 28, 2009
There is no right or wrong answer. You're asking her to take a paycut. Considering this, if your total commission to her is 6%, she will have to pay out to the buyer's agent at least 2.7% as posted on the MLS. She and her broker will share the remaining 3.15%. However, if her commissions were reduced to 5%, then no matter what, she will have to pay out the 2.7% as originally posted on the MLS. She and her broker will share the 2.3% remaining.

You might not know what the listing agents do behind the scene. Dollarwise, they have to cover the costs to market your property such as advertising, putting up the For Sale sign, printing flyers, spending hours posting the listings on the internet, networking with their friends and families and acquaintances both on the phone and on the internet, sending out just listed cards (on average, it costs about $200-$300). There are so many things they do that you're not aware of. After all, they do not need to report to you every single action they take.

So with that said, do you still think she deserves less?
0 votes
Debra (Debbi…, Agent, Livingston, NJ
Tue Oct 27, 2009
Well boys (Dunes & Rock) if you ever find that half of a brain I often feel I've lost, please send it back to me.......thanks
........in the meantime........Acg845...what happened with the $5000?? I hope your sale went through!
0 votes
Mack McCoy, Agent, Seattle, WA
Mon Oct 26, 2009
The right answer is, "No."
It is certainly legal for her to cut her commission, although her brokerage may not permit it.
0 votes
J R, , New York, NY
Mon Oct 26, 2009
Rock, I have put in money but NEVER as much as 1%. The most I have ever personally contributed is $150. And NEVER because the buyer and seller are too far apart. That's THEIR negotiation. I have offered to pay for a portion of a water hook up, an appliance, or a minor repair if the seller was being bullheaded, but only after the offer was accepted. It's funny you ask, though, because I have recently put into place a new policy, after being milked by one particular buyer: I will not contribute towards anything anymore.

REgarding Acg's sale. . . $5000 is a LOT to ask an agent to kick in. Even split 4 ways that's over $1000 for one agent. Some of my sales this year, that would have been half the commission. I'm sorry, I need the money, too. This is my ONLY full time job, I can't share my salary.
0 votes
J R, , New York, NY
Mon Oct 26, 2009
Hi Acg. The negotiation you are involved in now is between you and your buyer. Your real estate agent negotiated their commission when you listed with them.

Dan Chase, I see you are answering many questions on Trulia. You say you are not an attorney or a real estate agent but you are giving out legal advice. In some cases it is not totally correct. I don't know what you do for aliving but you probably know more about your job than I do. Perhaps you should leave the legal questions to an attorney and the questions involving real estate transactions to the agents.
0 votes
Edith Karoli…, Agent, Winnetka, IL
Fri Oct 23, 2009
Hi Acg845,
I will try to make my answer short and simple...
Anything can be negotiated - truly - if and when all sides agree...

But if you do NOT get what the buyer is ready and willing to pay, you want the Realtor to jump in and cut his or her commission, but I am sure it would not occur to you to give your Realtor an extra commission if the negotiations bring what you wanted or even more than you expected.... Of course not, right?

Usually it is the Buyer and the Seller to whom will be suggested to split the small difference of 5000 $, it would just be a few $ extra for the buyer and a few less for the Seller... and if you really want to sell and the buyer really want to buy 2500 $ should not stop the sale in its tracks!

Does this make sense?
Take care and good luck!
Edith Karoline YourRealtor4Life! And Chicago Connection...
Working always in the very BEST interest of her clients...
EdithSellsHomes@gmail.com
0 votes
Joe Sorrenti…, , Buffalo, NY
Thu Oct 22, 2009
?? If you have legal questions regarding Real Estate in NY State go here: http://www.dos.state.ny.us/ This is the regulatory agency overseeing Real Estate Brokers.

Everyone has an opinion about Real Estate Commissions and most opinions are from consumers but, I never heard where a discount is illegal, especially if the benefit is for the principal of the agency relationship (seller). I just have to add one thing. If your house does not sell, will you feel bad for the broker who spent time and money advertising your home and offer to pay a portion of their expenses?

If your home was listed for $100,000 and there were multiple offers finally selling for $110,000 ($10,000 more than you even expected), would you be willing to split that $10,000 with your broker by giving them a $5,000 bonus?
0 votes
Kanishka33, Both Buyer And Seller, Buffalo, NY
Thu Oct 22, 2009
Hello,
Being a Real Estate Agent is typically a primary occupation for most people. Agents work hard for the commission since it is thier PAYCHECK. You have to understand that this commission is NOT AN ADDITION to an already existing salary, but it is their salary. Thus, it is their livelihood that you are negotiating to take away. When you agreed to a 6% commission level (that is the norm in NY state) you obviously thought it was reasonable. A lot of the effort that the agent puts into making a deal is unknown to the parties involved, thus you may be led to believe that the agent may not deserve what they are getting. But believe me, I know real estate agents that stay awake till 1am, replying to emails, trying to close deals. So it is a very demanding job. If you as the seller are unsatisfied with the offer from the buyer, decline the offer. Wait for a better deal. Think about it.... Why should the agent sacrifice their income, when they have done their job by listing the house, showing the house, etc. as you agreed to in the initial contract for a certain commission level. Isn't it fundamentally unfair if you get something that was not bargained for during the initial contract negotiations (1% less commission) between you and your realtor just because it is convenient for you now?
0 votes
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