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

Judith Clausen Licensed Real Estate Broker, Denver, CO

Date: December 15, 2007

The Buyer Broker agreement is best. It spells out everything BEFORE you look at the home.
But, if you don't get the agreement and come across a compensation that just will not be enough for you, let the buyer know BEFORE seeing it, that they will be required to make up the difference if they want to purchase the house. Then, when filling out the contract, attach a Buyer Agent compensation agreement that will GO TO TITLE, not to the the seller. The seller has stated what he will pay, so it is none of his business what the buyer has agreed to pay.

If this buyer refuses to make up the difference BEFORE seeing the home, let them know that you must pass on this one, but they may arrange to see it with someone else who will work for such low compensation. You have explained the rules to this buyer. If they refuse to pay the difference, you gave them an opportunity to see the property, but they declined. No ethics breached.

DeeDee, why on earth wouldn't you put in the BA agreement the same clause that's in our Colorado BA agreement, which says:

Listing Brokerage Firm or Seller May Pay. Buyer IS Obligated to Pay. Broker is
authorized and instructed to request payment of the Brokerage Firm's fee from the listing brokerage firm
or seller. Buyer shall be obligated to pay any portion of Brokerage Firm's fee as described above in
subsection 8a which is not paid by the listing brokerage firm or seller.

I've never had a client who thought that was unreasonable, and I spell out what it means, that if a FSBO doesn't want to pay the fee, which has never happened, or if the compensation offered is less than my standard fee, they'll be asked to make up the difference. They do agree to this, and prior to showing a home with a lower offer of compensation I tell them that and I'm guided by their wishes. Some don't want to see the property, but others are willing to pay the difference and do. Not a problem. I recommend you think about using a clause like this. Then you never have problems with ethics or not being paid.

Judith Clausen, ePRO®
Broker/Owner
Exclusive Buyer's Agent
Buyers Advantage Real Estate of Metro Denver
www.Buyers-Advantage.net
303-587-3509 Local Direct
877-570-3471 Internet Fax

To Top

Quote

Reply

Melina Tomson Licensed Real Estate Broker, OR

Date: December 16, 2007

I have a clause like that, and I also have a checkbox on my BA that states whether they want me to search for non-MLS homes (ie FSBO's or pocket listings) and whether or not they want me to search for homes under my acceptable commission. I have found it to be 75/25 with clients. About 75% agree to pay the difference and the rest just want to see what's available without having to pony up the difference.

I just signed a BA today with a client, and he doesn't even want to see anything brought to him for less than my acceptable commission. The important thing is to have the conversation, so that it is the buyer's choice to exclude listings or pay the difference. They understand the economics of business. I've never had a buyer not get it, and it is such a non-issue for my clients. Either way is okay with me.

Melina Tomson, MS
ABR, e-PRO
melina@tomsonburnham.com
www.TomsonBurnham.com
ph: 503-371-6515
fax: 503-588-1628

To Top

Quote

Reply

Hugo Loaiza Licensed Real Estate Broker, Mission Hills, CA

Date: December 17, 2007

The Buyer Broker agreement is best. It spells out everything BEFORE you look at the home.
But, if you don't get the agreement and come across a compensation that just will not be enough for you, let the buyer know BEFORE seeing it, that they will be required to make up the difference if they want to purchase the house. Then, when filling out the contract, attach a Buyer Agent compensation agreement that will GO TO TITLE, not to the the seller. The seller has stated what he will pay, so it is none of his business what the buyer has agreed to pay.
-----------------

Judy

I fully agree. Here in Los Angeles I've done it with FSBO. We should keep in mind

that not all buyers will be agreeing to it, the same that all sellers don't pay X% commission.

Hugo Loaiza

Hugo Loaiza, GRI & e-PRO. Mobile Real Estate Practice

Broker Owner @ Cents Realty Inc. Lic. # 01088026 Since 1989

Our Goal, "$ave You Time & Money". 1.9% Commission to sell your home

P.O. Box 8652 Mission Hills Ca. 91346 Toll FREE 866 749-7336, Fax 818 435-2194

E mail to : mailto:Hugo@HugoLoaiza.com

Blog at : http://www.realtown.com/LocalHikes/blog

Never miss a thing. Make Yahoo your homepage.

To Top

Quote

Reply

Mike Smith Licensed Real Estate Broker, Lakeville, NY

Date: December 17, 2007

I may be off-base here, but in my state the license law echoes Art. 7 of the
Code of Ethics and says that you cannot receive compensation from both
parties without full disclosure and I believe that "full disclosure" would
include "how much and to whom". I practice in NY, but your state law may
vary.

Previous post said:
"I will do whatever I can LEGALLY do to be sure that I am paid what I want
to be paid for representing the buyer in the purchase of a property. One
percent is absolutely OUT OF THE QUESTION in today's market. I absolutely
CAN'T afford to represent this buyer for so little. So, what to do, what to
do???? I LONG ago stopped allowing other entities (Ass'n of Realtors, Dept
of Real Estate, or another agent) to dictate what I MUST be paid for my
services. They can insist all day long that I am ethically "bound" to show
all available properties and get paid whatever is offered. But, there are
LEGAL ways to avoid these STUPID rules.
The Buyer Broker agreement is best. It spells out everything BEFORE you
look at the home.
But, if you don't get the agreement and come across a compensation that just
will not be enough for you, let the buyer know BEFORE seeing it, that they
will be required to make up the difference if they want to purchase the
house. Then, when filling out the contract, attach a Buyer Agent
compensation agreement that will GO TO TITLE, not to the the seller. The
seller has stated what he will pay, so it is none of his business what the
buyer has agreed to pay.
If this buyer refuses to make up the difference BEFORE seeing the home, let
them know that you must pass on this one, but they may arrange to see it
with someone else who will work for such low compensation. You have
explained the rules to this buyer. If they refuse to pay the difference,
you gave them an opportunity to see the property, but they declined. No
ethics breached.

--
Deede Wockenfuss
Marketing Manager
Assist 2 Sell, Buyers and Sellers Best Choice
480-558-0555

To Top

Quote

Reply

Hugo Loaiza Licensed Real Estate Broker, Mission Hills, CA

Date: December 17, 2007

The Buyer Broker agreement is best. It spells out everything BEFORE you look at the home.
But, if you don't get the agreement and come across a compensation that just will not be enough for you, let the buyer know BEFORE seeing it, that they will be required to make up the difference if they want to purchase the house. Then, when filling out the contract, attach a Buyer Agent compensation agreement that will GO TO TITLE, not to the the seller. The seller has stated what he will pay, so it is none of his business what the buyer has agreed to pay.
-----------------

Judy

I fully agree. Here in Los Angeles I've done it with FSBO. We should keep in mind

that not all buyers will be agreeing to it, the same that all sellers don't pay 7% commission.

Hugo Loaiza

Hugo Loaiza, GRI & e-PRO. Mobile Real Estate Practice

Broker Owner @ Cents Realty Inc. Lic. # 01088026 Since 1989

Our Goal, "$ave You Time & Money". 1.9% Commission to sell your home

P.O. Box 8652 Mission Hills Ca. 91346 Toll FREE 866 749-7336, Fax 818 435-2194

E mail to : mailto:Hugo@HugoLoaiza.com

Blog at : http://www.realtown.com/LocalHikes/blog

Be a better friend, newshound, and know-it-all with Yahoo! Mobile. Try it now.

To Top

Quote

Reply

Robert King Licensed Real Estate Broker, Saint Petersburg, FL

Date: December 18, 2007

Wow Deede so brave! You would actually say this line to a prospective target when the compensation from the selling agent is inadequate?

"but they may arrange to see it with someone else who will work for such low compensation"

If I were a buyer and you fed me that line, I would ask you if you would be so generous as to give me the listing agents phone number thank you very much! First of all if you were worth your salt you would not need to say such nonsense as, "go find another sucker who's willing to work for paltry wages". It's not necessary, IF you have an EBA agreement already signed by the buyer! Why are we turning this business in amateur night? However if you are not obligated to show the property then who really gives a rip. Because the COE doesn't require for ALL listed properties to be shown especially if it's not in the interest of the buyer! So who makes that determination? The agent or the buyer? If the buyer wants to see the house and you have an EBA agreement you don't have to tell the buyer that the seller's contribution is inadequate. Because with an EBA agreement it's already understood what the compensation is going to be for the buyer's agent. However, if you got a "get off the hook" clause in your EBA agreement you ain't got squat anyway! Deede you are either brave or foolhardy. Compensation is what compensation is! If you don't like it take it up with whoever you are working for regardless of whether it's a buyer or a seller or whether you are representing them or not. Where does it say we have to represent anybody? We don't! The problem arises when we MISREPRESENT somebody. Up tell that point all's fair in love & war and Real Estate Transactions.

Robert King

Broker/Consultant

Charles Rutenberg, Realtors

Clearwater, Florida

To Top

Quote

Reply

Username
Password
Login to:
Remember Me

RealTown's RealTalk

Reply to Discussion: