RealTown's RealTalk

Thread: “To the first point...  I'm neither representing my client or my wallet, I'm representing the 'business standards' I've set for how I choose to conduct my business.  Attorneys, Doctors, Accountants and nearly every professional I know has set pricing.  Its not set by the parties they work with.  I know what my time is worth and I choose to only work for a client if I'm properly compensated for that time.” Re: getting offered 1% by the seller

As an instructor who teaches both ABR and SRS, I can tell you that I always tell my students: what you get paid is between you and your client, and no other agent or seller can limit your compensation. The easiest fix is that if a buyer wants to buy a house where the compensation offered is not equal to the contractually agreed upon compensation between the agent and the buyer (notice I said contractually—if you are working without an exclusive buyer agency agreement, shame on you!), then the contract is written with a seller’s assist for buyer’s closing costs. Your fee is a legitimate closing cost. It goes on the HUD, you get paid and you are all happy. This is one of the things you can do—there are others. A good buyer’s agent will probably save his/her client 3-5% in sales price through negotiation skills.

Regards,

Melanie J. McLane, ABR, CRB, CRS, ePRO,GRI, RAA, SRS, SRES Real Estate Trainer, Broker and Appraiser. Serving Central Pennsylvania's Real Estate needs since 1975. For information about listings and sales, contact me at FISH/GMAC Real Estate, 570-326-1561, or direct at 570-660-9671. For appraisals, contact me at 570-398-1201. For education and training, contact me at 570-398-1201 or 570-660-9671. Offering training and consulting to the real estate industry. Visit my website at: www.TheMelanieGroup.com and check out my blog at www.RealTown.com.  

To the first point...  I'm neither representing my client or my wallet, I'm representing the 'business standards' I've set for how I choose to conduct my business.  Attorneys, Doctors, Accountants and nearly every professional I know has set pricing.  Its not set by the parties they work with.  I know what my time is worth and I choose to only work for a client if I'm properly compensated for that time.

Hi all,

I agree with Tom Early…..

To the first point you stated earlier WITH A BUYER BROKER AGREEMENT YOU DO REPRESENT THE CLIENT!!! You may be committing an ethics violation and a legal one if you do not show that home! In your agreement, you agree to show ALL homes that fits your buyer’s parameters, NOT yours. A judge at a later time may have a field day with you if a buyer missed a home because of a commission you didn’t like!

I usually do not (not always) show a FSBO or a 1% commission home. It depends on the Buyer Broker agreement. I inform my buyer clients what commission I work for from the start, before we look at homes (if the seller refuses to pay my commission then the party I represent will pay the difference or we agree not to show the home). Now, it is the buyer that makes that agreement with me. An agreement is two or more parties AGREEING to a commitment. An attorney, doctor, or even an accountant and nearly every professional with very little business may “agree” to set a lower price for what they charge in order to increase business (SALE items or services).

As a Buyer’s REPRESENTATIVE (NOT BUSINESS STANDARDS, NOR WALLET REPRESENTATIVE) you commit to show all homes that fit their needs (including the commission that was set). If not, then consider yourself a Business Standard Representative (BSR), and let your client know that. The buyer client is usually under the understanding and impression that they will have seen every home that fits their needs until they have been satisfied (hopefully made a purchase offer).

What if you received a contract on a listing that stated the buyer’s agent wanted a higher commission than your seller is offering, are you NOT going to tell the seller of the offer? Or from a buyer that wants to pay a certain price with a 1% commission for the listing agent. No! You will show that offer and perhaps both you and your seller can laugh. But, you have to present ALL offers.

As an agent, I state from the beginning how much I desire for a commission from the buyer or seller. If they agree, we move on, if not we move in different directions. I had a buyer on more than one occasion put an offer on a FSBO or 2% commission and make up the difference! That is the agreement.

Our Buyer Broker Agreement  for our area (Excerpts)

1. Exclusive Agency. Buyer retains Broker to be Buyer's exclusive agent to assist Buyer in locating and acquiring certain as yet

unidentified real estate (the "Property") and to assist in negotiations for the purchase or lease of the Property on terms acceptable to

Buyer. 

6. Fee. At the time this Agreement is signed, Buyer has paid Broker a nonrefundable deposit of $_________________ (the

"Deposit"). If Buyer purchases or leases any Property during the term, Buyer shall pay Broker a cash fee (the "Fee") equal to:

________% of the purchase price or ______% of the total rent over the term of any lease for the Property; or $______________

……………………………………….

6d.  At Buyer's request, Broker will attempt to negotiate with the Owners or the listing firm to pay the Fee, but neither the

Owners nor the listing firm have any obligation to pay the Fee. Broker will give Buyer credit against the Fee for all amounts paid by

the Owner or listing firm. If the Owner and the listing firm refuse to pay the Fee, Buyer must pay the Fee to Broker if Buyer

acquires the Property. Buyer acknowledges that certain financing programs may prohibit or limit Buyer in paying the Fee, and

Buyer will not use these programs if the Owner and listing firm refuse to pay the Fee.

On your web site (Tal Kramer’s site)  http://www.marietta-dreamhomes.com/btips.html you state the following:

BUYER REPRESENTATION / BUYER AGENCY:  Did you know historically the agent showing you homes worked for the Seller?  This was true even when the seller had his or her own "Listing" agent.  Well times have changed and in most states, including Georgia, the Buyer can have the agent represent them and protect the Buyer's interests in the transaction.  The beauty of this is (in most states) there is NO COST for this service.  The commission, paid by the Seller, pays your agent too.  An additional benefit is a Buyer's Agent can show you ALL the available homes including those with other Brokers, For Sale By Owner or New Homes by Builders.  So begin your Realtor^â search by seeking out an agent who can and will represent you!

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Notice that on point 2 of your email post you conflict this with:

2)      If the seller only wants to pay 1% then they are not realistic about what is typical compensation.  Most likely the price they've set for their home isn't realistic either.  Most likely they won't be realistic during inspection negotiations either.  Its just like FSBO's (that I also don't show), the majority are not realistic and are overpriced, so I don't feel like I'm doing a disservice to my client by skipping some inventory.

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Regardless of your feeling, skipping inventory intentionally may even be considered Steering.

And finally, notice the last line of your site’s post and who it states you represent:

So begin your Realtor^â search by seeking out an agent who can and will represent you!

I am sure that your Buyer Agreements state what the commission or Fee will be and who will pay that. I am also a bit curious, can you please post what your current buyer agreement looks like so that we can better see what agreements look like in different parts of the country. It may in fact be different. I am no where near perfect and am always learning (things change over the years, for a great many years people thought the world was flat) I consider this board to be a great part of that learning; I believe it improves us all!

Take care and have a great week!