Agent hasn't rent out our duplex 3 weeks after closing

[Shirley X.]

Our buyer’s agent offered to list our duplex for rental with the commission paid by tenants. However, it has been 3 weeks after closing but there has been no deal despite activities of showing and open houses. We are seeking advice on how we should handle this situation.

More details:

The rental was not listed until several days prior to closing as our agent indicated that he didn’t want it to span too long, and it was not convenient to show the property as he had to call/text the seller each time. However, our friends who are also buying rental properties said their agent always started renting activities early on and usually had a lease in place at the time of closing. We were contacted by other agents who offered to lease the property, but we turned them all down as we thought our buyer’s agent has the better access and knowledge than others.

To help with getting the property rented, we listed the property at some other places by ourselves and were directly contacted by many potential tenants contacted us. We told our agent that we were doing this and the plan was we would eventually refer the candidates to him. Most often, when we told the candidates that the lease must be done through an agent and commission needs to be paid to the agent, they shied away.

An Exclusive Rental Listing Agreement has been signed for one of the two units, with a term ending in September 30.

We believe that our agent made efforts on protecting us from bad tenants. An example is that a group of people didn’t bring cashier’s check for upfront payment as they agreed, so he didn’t give keys to them and requested cashier’s check. Those people never came back.

The period for graduate school students' rental has been missed given we are at mid-September. We could have better grasped these opportunities as the P&S was signed in mid-July.

Rent has been reduced by $200 during these 3 weeks.

The first mortgage payment of about $3000 is due on Oct 1.

Some thoughts:

We have to do something to prevent further loss. We now are considering trying to make deals by ourselves without involving the agent. The property will be obvious more attractive without additional fee charged to tenants. My husband wants this to be done in a courteous way without irrigating our agent, but we don’t know how.

Are we obligated to pay some gratuities to him for his efforts in renting? If so, what would be an appropriate amount? (He had received over 10 grands commission acting the buyer’s agent though.)

Though there are improvement could be done to the property (install an additional bathroom, update kitchens, add compressor for A/C), given we bought it at a retail price, probably it’s not an option to make these updates and sell it.

Any advice would be greatly appreciated!

[Melissa Kirchhoff]

@Shirley X. - I hate to say this, but 9 times out of 10, it's not the agent. Now, this may be an exception, but likely it's not. Usually it's something to do with the place, location, etc. However, your agent should be sharing this with you. (i.e. kitchen too small or busy street or too dated, etc)

Speaking from personal experience, when I have a residential rental, I get emails, calls, and leads up the ***. Like really, you can't even imagine it. However, contacting those back, like 95% don't even get back to me! Of the ones that do, another 95% don't fit the criteria (think: very very unqualified tenants, pets when it clearly says no pets, etc). Then, of the ones you do show it to, most you never hear from again (even ones that say they will rent asap!) It's honestly a really crazy thing!

Now, moving on, I don't understand the making the tenant pay thing, I've never heard of it. In our market (and to my knowledge every market) the seller is responsible for commissions and here it's typically 1 month's rent divided between the 2 agents (him, the listing agent, and the other one that brings it it. So more motivation for him to find the renter). So my thought on this, is he planning on "charging" the tenant that extra amount? That could surely be turning potential renters away! I would ask about this. Also, check the comps, are you competitively priced for what you offer? It might be too much in general and that's what people realize and turn away.

Another few tips, when you guys personally get leads, either explain it better to them (say it's no cost to you, if it isn't, which it shouldn't be!) or just tell them he's your guy who takes care of that department and leave it at that. Most renters are used to that set up, you have to speak their language. They still maybe never to heard from, and that could just be the nature like I explained above, or it could be him. I assume if you're using him and liked him when you worked on buy side it would be the same (unless he just doesn't think he's making enough money off it and it's not worth any work). I think that answer is more personal.

Which is my final point. There should be no commission unless he finds a tenant, per contract. So you can cancel at any time if you think he's not doing what he should. I would strongly recommend you try to discern that first or communicate these concerns you shared with us with him, and give him a timeline. Again, take in to account this may not be his fault and try to treat him like a human being =) You'd be surprised how many times people take their frustrations out on agents when it's their decisions on pricing or not fixing/updating! So I feel pretty biased in this and feel obligated to say check all the other potential issues off the list before blaming the agent! =)