Agent wants 2% for not selling a house

[Marc Pfleger]

I have a rehab property that was close to completion when a cash buyer walked up to the property with offer and a bank statement in hand showing he had the funds to purchase. My business partner and I decided to accept his offer. I informed the agent that helped me purchase the property and he was understandably upset and wants 2% which roughly equals $3600. I have worked with this agent in the past on several other deals and there was a general understanding that we would use him to list all properties that he helped us buy. My business partner and I prepared all the paperwork and went through the negotiations ourselves. There is no written agreement between us and the agent for this property. If I do not hand over the 2%, the agent inferred that I would be off of his "list", at the moment he calls me at least twice week to look at houses. My partner and I would like to live up to our word and pay the agent something. The buyer brought in an agent to help him with the paperwork and the buyer paid the agent $1,200. I thought paying $1,200 to my agent would be more than fair. He did get paid on the acquisition and told me he maybe spent 4 hours on this property. My agent does do some research and previews properties for me without me telling him to do so, he feels that I am devaluing him by cutting him out of the deal. I feel that it is a little ridiculous for him to feel that he deserves 2% for selling a property that he did not sell. I have a sneaking suspicion that even if we do pay him the $1,200, the effect would be the same as if we did not pay him at all, that effect being he won't be calling and looking for properties on my behalf. I hate to lose his local knowledge and maybe I am being too loyal, as this agent has been with me since the beginning (approx. 13 months) when most agents would not even give me the time of day. I recently earned my license so I have access to the same inventory he does. I have reached out to other brokers I have dealt with before and explained the situation and the general consensus seems to be that I am crazy for even considering giving him anything. Any and all input welcome! Thanks.

[Ned Carey]

The red flag is that he "demanded" 2%.  Knowing he had nothing to do with the sale, and asking if you could throw him a bone, I wouldn't hold against him. The fact he asked in a way that implies he is absolutely entitled to it would concern me. 

I would have been tempted to give him something (perhaps the $1200 you suggested) even if he didn't ask. Now I would be tempted to say, "I was going to give this to you any way but since you don't appreciate it I am taking my business elsewhere."  That is known as the Takeaway in negotiating. If he apologizes you can continue and grow you relationship. If he acts like a jerk then you know you made the right decision. 

As far as him telling other agents I would not be the least concerned as long as you have been fair to him. If he is a true jerk no one will listen to him anyway.  If you do things right and honorably then others will see that over time.