Last Minute Agent Antics
So we’re all set to close tomorrow and the real estate agent who was not retained by the seller apparently thinks he is still owed a commission.
Unbelievable.
I presented this agent with a release form to sign (just to be safe) in order to get the 0.5% referral fee that my agent was willing to give him and he won’t sign the release form!
Do I really need him to sign a release form? No, since he has no contract and therefore no claim to any commission, but since I indemnified the seller in order to get the deal done, I want to make 100% sure this is all settled before this agent sees any money at all. If he still has thoughts of raising a stink, he can do so without my money.
What I ended up deciding to do is to close this deal tomorrow, as planned, and have escrow hold this other agent’s 0.5% in escrow until he signs the release. If he doesn’t sign within a couple of weeks, I will just have escrow pay my agent the full commission instead.
I’m not too worried about this situation at this point, but it’s annoying to even have to deal with it. I do like having the power to keep this money in escrow, but honestly, I wish I had the power to withhold all commission related to this deal if I needed to.
This is important: most people don’t realize that the buyer’s agent contract they sign usually specifies that the buyer will be responsible for paying a 3% commission to the buyer’s agent if the seller doesn’t pay it (which they usually do). I do not like this arrangement at all and I will be writing it out of my next contract. I was still going to pay my agent 3%, but I don’t like giving up the right not to under circumstances like an intra-office commission dispute. Another thing people should change about their contracts is the termination clause. My stock contract didn’t allow me to sign on with another agent until three months after I terminated my existing contract. I ended up changing this to 14 days, but I would go even further in retrospect. Probably one week.
View Live Cam
View Photo Gallery
Via RSS (Posts)
I might be misunderstanding you, but, I thought the seller pays the real estate commissions. The buyer doesn’t pay any commission. Is this different in Washington?
Chris: Yeah, see this is the part that is confusing to most people (including me) — It is customary for the seller to pay the commission, but real estate contracts can be written up any way the buyer and seller decide. They could even be written such that a third party somehow pays the commission. Because of this flexibility/ambiguity, generally buying agents write something into their contract with their client (me) that says something to the effect of:
Since it almost always is paid by the seller, the clause rarely triggers. It’s in there so the buyer and seller can’t come to an arrangement and then decide to simply not pay the buyer’s agent. It’s also in there for cases where a seller puts his property on the market and declares in advance that he is not paying the full 3% commission to any buyer’s agent.
This was one thing I noticed as well when I read over the contract. I had some words with my real estate agent and we agreed that if by some chance the seller didn’t pay, that I didn’t have to either.
But you are right, most people do not realize this is in there.
Mike I’m just starting into your journal of your house that Ive stumbled upon, truly stumbled cause I live in Indianapolis. Nonetheless I am a recently licensed Real Estate Salesperson and the insight on your process has already been great, especially with regard to your opinion on the current salesperson/buyer relationship.
So after all of that, the hunt, your agent looking, you over looking a listing on the internet, and contract changes because you chose to “do it yourself,” you still have a disregard for the Real Estate Profession.
You talking to the seller can be good or bad. I’ve done it and it turned out good, there again I’ve done when it turned out bad.
That’s why we have an agent. I have a license, but also use agents, the deals go better with me using an agent.
You do web design, the internet is your business so of course “shopping” for property should be just as easy as buying a pair of shoes, or travel tickets, or ETRade?
You spent months or was it years spinning your wheels, by yourself, and the internet. Then you had an agent work for you, then you had him give up .5% of his commission to make you happy.
I mean I appreciate your site, and the numbers, but in my opinion you did your agent some dirt here, and you should be promoting him, or her, the same as you did Build LLC. It seems to me your agent did a good job.
David: I think you are misunderstanding exactly what happened. I didn’t make my agent give up any commission. My agent and the other agent work in the same office so in order to keep up relations, my agent offered it to him. I paid every penny of the commission that I agreed to pay in the original contract: 3%. The fact that the other agent never got the seller to retain him as a seller’s agent was his fault. If I was the seller, I wouldn’t have hired him either, as he was a bit of a jerk.
You are right about one thing though: I should promote my agent, who is a friend of mine and I’ve been very happy with. In fact, I’m currently listing my condo with him. His name is Russell Katz and I highly recommend him. I will add him to the partners section in the sidebar as well.
Well sure Russel’s a good kid, and in my opinion of seeing your site, and know Russel slightly, I kinda think you may have taken a little bit of an advantage of him.
You owe him the .5%, or maybe you can trade him some work.
Sure the other agent may be a jerk, as you say, there are a lot of jerks in the business, but that wasn’t Russel’s fault. He may have heard something, he may have been directed to the property, you don’t know, you took a chance, you win, he loses? Naw!
Cut the carp, Russel is the kind of blood the Real Estate profession needs.
I don’t have much of a taste for carp, but Russell is not a kid, Russell made a ton of money getting me this land, and Russell doesn’t think he is owed more than what was in the contract. And hey, you know what? He’s listing my condo right now too. You need to learn a bit about what relationships mean in this business.
Really?
Now you have a condo that you want to sell.
I hope you price it well so Russel can make another ton of money. Because the feeling I’m getting is you are going to want top dollar for that condo, and you’re going to want Russel to earn every penney of those commission dollars.
Then the buyer’s agent better watch out, because that commission may be up for grabs also. Maybe you can make a side deal with the buyer.
Oh wait! How stupid am I! That’s right Russel better do a very, very, good job because you have Internet Options.
Russel deserves a lot more from you than a link. That’s my opinion, my very strong opinion, and as you know every one has one.
David: When you’re in a hole, stop digging.
I really don’t know what that means, but it is quippy.
Real Estate is a profession, kind of like web design. So you sold some company for millions dollars? It’s in here somewhere, I’m sure there were contracts involved.
So your time, effort, energy, your trade, is much more valuable than the excellent work of Russel Katz, who has also learned a craft?
You say he isn’t complaining, because you’ve got your condo deal you’re going to give him as his next prize.
What I’m saying is that I hope this next experience he has with you goes better than what you have described.
Sigh.