RealTown's RealTalk

Lastly, if a dispute arises between you and your client, you could really have a problem with the NAR Code of Ethics in Article 9 which states, "REALTORS, for the protection of all parties, shall assure whenever possible that all agreements related to real estate transactions including, but not limited to, listing and representation agreements, purchase contracts, and leases are in writing in clear and understandable language expressing the specific terms, conditions, obligations and commitments of the parties. A copy of each agreement shall be furnished to each party to such agreements upon their signing or initialing." Oral agreements are clearly unsafe and totally dependent on each parties recollection or memory. Isn't it true that our buyers and sellers always have very short memories? Ha! "Oh, I never said that." "Gee, I would have never agreed to something like that." Without a written agreement, you will have a very hard time proving otherwise. So think of a buyer agency agreement as a "CYA" (cover your backside) form as well.

It is not hard at all to get these agreements signed with a buyer who truly feels you are the agent to work with. They also clearly show your clients that you are a professional who leaves nothing to chance or poor memory. And if a buyer won't sign one with you, then merely adopt a sound business practice that you won't drive them the first block in your car to see any home until they do.

Regards,

Win

**********************
Win Singleton, CRB, e-PRO

And of course there is the old stand by answer to this question - No Ticky, No Laundry. :-D

tOMe

Thomas A. Early, Master CEBA
425 W. Schrock Rd.
Westerville Ohio 43081
Serving the Greater Columbus Ohio area
mailto:TomEarly@BuyersBrokerage.com
http://BuyersBrokerage.com
100% Buyer Representation 100% of the Time
Past President of the National Association of
Exclusive Buyer Agents (NAEBA) http://NAEBA.org
NAEBA: 1-800-786-1570
Buyers Brokerage 1-614-890-2722

At 05:16 PM 12/12/2007, you wrote:

Our job is more than just finding the right property for the buyer, that's the easy part.  Our real job is being the real estate consultant that advises on pricing, negotiates a solid contract, coordinates and advises on inspections, and does a good job of monitoring the transaction from contract to closing.  Those activities are where our expertise comes in and for most of us, 1% gross, simply doesn't cover the time commitments.  Bottom line - There are too many homes to choose from to invest your efforts by showing and contracting for low selling commissions so either skip those properties or get a minimum commission via your buyers brokerage agreement.


Tal Kramer

Hold your horses there Tal.

It seems you are saying that you should not show a buyer a home based on the amount that will eventually find it's way to your wallet.   Who are you representing, your client or your wallet.

IF you had an agreement with the buyer the buyer would already know that if the listing brokerage was only offering 1%, they would need to make up the difference.   Of course if your not using an agreement, your don't deserve to be paid to begin with so 1% should do nicely.

tOMe

Thomas A. Early, Master CEBA
425 W. Schrock Rd.
Westerville Ohio 43081
Serving the Greater Columbus Ohio area
mailto:TomEarly@BuyersBrokerage.com
http://BuyersBrokerage.com
100% Buyer Representation 100% of the Time
Past President of the National Association of
Exclusive Buyer Agents (NAEBA) http://NAEBA.org
NAEBA: 1-800-786-1570
Buyers Brokerage 1-614-890-2722

Dear Tal,

Re: 1% sell side, thanks a rant load!

Our only commodity is our time. Most markets have an over supply of
inventory these days. If one of the matching properties for my buyer is
paying a commission less than I consider acceptable - I skip that property.
If I didn't notice the commission until after I had called to verify the
property was still available - Then I call the listing agent and tell them I
just noticed the low commission and I will not be showing after all. They
need to know that their client (the seller) is losing opportunities due to
the low fee.

I totally agree with what you say, but question the validity of it. As an
ABR we were taught that it is our responsibility of the buyer's agent to
find all homes available that would fit our client's needs, regardless of
the commission base; which would be covered by a buyer's agency agreement.
The buyer is allowed to ask for a highter commission within the offer.

Your Favorite Realtor

Wanda Gabriel

Wanda Gabriel
Realtor; CRS, ABR, GRI, QSC
Prudential Snyder Real Estate
#1 Brickyard Dr.
Bloomington, IL. 61701
office # 309-664-1918
mobile # 309-275-9263 (309-ASK-WAND)
personal fax# 309-661-3762

http://www.WandaGabriel.com

I'm happy to help you buy or sell your home.
I love your referrals.

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11:29 AM

Hi Everyone!

Wanda Gabriel wrote -

"I totally agree with what you say, but question the validity of it. As an ABR we were taught that it is our responsibility of the buyer's agent to find all homes available that would fit our client's needs, regardless of the commission base; which would be covered by a buyer's agency agreement. The buyer is allowed to ask for a highter commission within the offer."

Wow! Where did "the buyer is allowed to ask for a higher commission within the offer" come from?

Perhaps Case Study #16-15 from the 2007 NAR Code of Ethics and Arbitration Manual best illustrates how your premise could be seen as unethical. To sum up the case, REALTOR B had ignored the compensation information published in the MLS and presented an offer to REALTOR A to take to his his seller which called for a higher compensation to REALTOR B. "REALTOR B responded during the hearing that he had a right to negotiate with REALTOR A as to the subagency compensation he would receive for his work..."

To cut to the chase, "The Hearing Panel's decision noted that REALTOR B was indeed entitled to negotiate with REALTOR A concerning subagency compensation but that such negotiation should be completed prior to the showing of the property by REALTOR B. The decision indicated that REALTOR B was entitled to show property listed by REALTOR A on the basis of the subagency agreement between them. If there was no agreement on the essential terms and conditions of such subagency, including compensation, there was no authority for REALTOR B to show the property or to procure an offer to purchase." (Note: Just substitute buyer agency for subagency.)

"The panel’s decision further advised that it was improper for REALTOR B to follow a procedure of inserting the amount of subagency compensation to be paid by the listing broker on any document provided to a buyer or a seller, because this is properly a matter to be decided by the listing and cooperating brokers at the time the offer of subagency is offered and accepted; and that preconditioning an offer to purchase on the listing broker’s acceptance of a subagency commission greater than he had offered was a practice inconsistent with respect for the agency of the listing broker."

"REALTOR B was found in violation of Article 16."

Case Study #16-16 finds pretty much the same. By a buyer asking the seller for a higher commission in an offer than what the listing firm and the seller had agreed to offer, it could certainly mean that the listing agent would now be asked to adjust the fee on the listing side to keep the gross commission at the original amount - "The Hearing Panel concluded that REALTOR B’s actions to encourage his buyer-client to pressure the seller to try to modify the listing agreement with REALTOR A was an unwarranted interference in their contractual relationship. "

There is only one case study, Case Study #16-17 that calls for a buyer conditioning an offer on the seller's agreement to pay the buyer agent fee. But in that case, no buyer agent compensation was being offered at all by the listing firm. So the request for compensating the buyer agent on behalf of the buyer had no effect on the gross compensation still being paid by the seller to the listing firm and didn't require the listing agent to "re-open" negotiations of the original listing agreement with the seller.

And Standard of Practice 16-16 is clear on this point too - "REALTORS, acting as subagents or buyer/tenant representatives or brokers, shall not use the terms of an offer to purchase/lease to attempt to modify the listing broker’s offer of compensation to subagents or buyer/tenant representatives or brokers nor make the submission of an executed offer to purchase/lease contingent on the listing broker’s agreement to modify the offer of compensation."

Now you might claim that it was all the buyer's big idea. But let's get real here. Few buyers are sophisticated enough to have that idea... unless their buyer agent put that thought into their heads as a way to circumvent what was offered as compensation in MLS.

So if you don't like the fee being offered by the listing firm, you have 3 choices: call the listing firm and ask if you can be paid more and get their agreement before you ever show the property;  OR discuss with your buyer if the buyer will make up the difference; OR don't show the property.

Win

**********************
Win Singleton, CRB, e-PRO
Associate Broker
Northern Virginia Real Estate, Inc.
1018 Shipman Lane, Suite 200 
McLean, VA 22101
(703) 536-7631
wins@winsingleton.com
Licensed in Virginia
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