T/B with Agent

[<Steve> 82]

Ok, I've got a showing with a potential tenant/buyer today, but she wants to do a straight purchase, seems I am having straight buyers coming around more these days. Well, this buyer looked at the house a few weeks before and now she has pulled in a real estate agent. I hate when they do that. So, the realtor calls asking if I can cover her commission. Yes I said, but I don't have room to lower the price. So, I called the tenant/buyer to let her know the issue of price and commission and that if she could ditch the real estate agent I can lower the price. It looks like she is comparing my house to another house in the subdivision that is lower priced to compare features. She says she has not signed anything with the real estate agent.

 

So I will need to be-friend the agent so she doesn’t pull my potential buyer away to buy the other house, and at the same time let the buyer know she can get a better deal and a better house. Will see how it goes. . .

[speedingpenguin 19]

Ick, good luck with that! Doesn't sound like a particularly fun situation to deal with....

[MichaelC 160]

The ol' surprise Agent pop-up. Been there, done that, hate it. The Agent wants her commission? For what? Walking through the kitchen with her client who had already seen the house?

[<Steve> 82]

Well the showing is done and they where 25 minutes late, but everything else was as expected.

 

The tenant/buyer was stary eyed, different attitude than when we first met. I think she realized she had a VA loan in her back pocket and could really purchase a house. The agent just gave me a snarled look. The buyer seemed to not even be able to think for herself without the agent making a decision for her. And the agent didn’t like it much with me asking her questions.

 

Anyway, they looked at the house everything went fairly smooth and they were off to look at the other house across the street to compare.

 

I think what burns me the most is that I have been working with this t/b for last few weeks. Helping her with lenders and getting the ball rolling with a VA loan. Maybe she'll buy, and hopefully with out the agent.

[spleano 0]

So, the realtor calls asking if I can cover her commission. Yes I said, but I don't have room to lower the price.

Why would you pay the agent anything? If the agent is representing the buyer; the buyer needs to pay any commissions. I don't know where you are, but in Pennsylvania, the agent needs to have a buyer agency contract signed in order to show buyers houses that they don't have a listing contract on. It clearly reads that the buyer will pay any discrepancies in commissions. If the agent wants a commission they need to collect it from the buyer that they've been schlepping around. If the agent doesn't have an agreement with the buyer (many don't), too bad. When buyers I work with show up with a surprise agent, I immediately ask the agent if they have an agreement with the buyer. If they don't; I make sure they know that I'm not paying their commission so, they can go snarl at someone that doesn't know any better.

 

X Agent

Dino

[<Steve> 82]

Interesting Dino, I guess I "assume" the realtor(s) get paid from the proceeds of the sale at close on the seller's side. It is possible that it may look like I am a real estate agent to the buyer's agent too. Moving forward I will keep your info. in mind. I will keep the need to have a buyer's agreement to be able to show the house in my pocket should I need to play it, and will also confirm that in my state.

 

I try to play a good guy at the inset because the buyer's agent has control over the buyer and can and will pull the buyer to another deal. This is why I hate when t/bs bring in an agent. It mucks up the water, and can make things more complicated.

"To many cooks in the kitchen"

[speedingpenguin 19]

here in MA the "Exclusive right to buy" agreement that an agent and a buyer go in to says that the agent will receive x% or $y if the buyer buys a property within certain boundaries written in the agreement. The buyer has to check off that they want their agent to "try" to negotiate their commission from the seller, but it's not mandatory. If they don't have an agreement in writing, or even if they do, you're not obligated to pay the agent ANYTHING. The agent can try and collect their commission from you but the buyer would have agreed to pay their commission otherwise if it's in writing :-P

 

This would be the same if the listing agent was offering 2.5% commission to the buyers agent but the buyers agent and the buyer had an agreement for 3%, the last .5% would be the responsibility of the buyer unless the agent could negotiate it from the seller/sellers agent

[spleano 0]

I guess I "assume" the realtor(s) get paid from the proceeds of the sale at close on the seller's side.

They do when the house is listed. When they are showing buyers houses that aren't listed, they are representing the buyer and no one is representing the seller. The agent collects a commission from the person they are representing. When a property is listed, the listing agent/agency pays a commission to the buyer's agent/agency from the proceeds of the sale at closing. And like Chris_MA said

This would be the same if the listing agent was offering 2.5% commission to the buyers agent but the buyers agent and the buyer had an agreement for 3%, the last .5% would be the responsibility of the buyer

 

I try to play a good guy at the inset because the buyer's agent has control over the buyer and can and will pull the buyer to another deal.

If the agent has that much control over the buyer let the buyer go buy the house that they don't prefer because the agent told them to do so. If you "contracted" a great house correctly (Thank you, Doug Pretorius. He buys gorgeous houses in great neighborhoods.), you shouldn't have any trouble finding another buyer. I know that my style might be a little gruff and not for you, but I am definitively not agreeing to pay an agent in an attempt to "play a good guy." I want the agent to know, upfront, in a nice but firm way, that I don't give a rat's *ss about their opinions or commissions. I'm not a good guy or a bad guy. I'm a real estate professional with a desirable house available for purchase. Whoever can do whatever they want with that information. If I have an agreement with the agent to bring buyers, that's a different story.

This is why I hate when t/bs bring in an agent. It mucks up the water, and can make things more complicated. "To many cooks in the kitchen."

I agree with that. I try not to be rude to agents, but I want them to understand that I'm running the show on my houses and couldn't care less about what they and their buyer choose. IMO the agents that you would want to "be-friend" will already understand how they get paid. Allow your confidence to go through the roof by only structuring attractive deals on houses that are extremely marketable.

 

X Agent

Dino

[OX6603 0]

Another thing to consider, again, in PA at least. Even with a buyer agency contract in place, the agent is only entitled to a commision on properties that they introduce the seller to and/or assist in closing on. I know when I was an agent some agents even said the buyer owes on anything they buy, but the law and their own contracts said differently.

[<Steve> 82]

Good stuff! Thanks for the replies and clarification.

 

Reminds me why I don't get licensed. To much regulation and rules. As an investor I can work the deal anyway I want and not have to conform to what an agent has with the buyer.

[speedingpenguin 19]

Yep. Being licensed has it's perks (MLS access), but it's certainly got it's share of downsides as well!

I think if you can find an agent or broker with MLS access that's willing to work with you or let you help yourself with their MLS (probably not the most legal thing), there's no reason to get licensed. But, a good, investor friendly real estate agent isn't easy to come by, so really either way you've got down sides and benefits