question about realtor commission, should this bother me?

OP

Member since 2022 · 11 posts · 4 votes

4y

Thank you Dustin, sure appreciate your input, goes a ways in calming my nerves. I knew they didn't "owe it" to me but it just seems they should be willing to negotiate a small discount in light of the circumstances. I'll have to remember to negotiate such a possibility ahead of time. Honestly this experience will make me want to consider a discount broker next time. Thanks again.

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Will BarnardPro Member

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Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes

4y

As you have now learned, you should negotiate into your listing agreement such discount to the total commission if the list agent reps both sides. In this case, you actually didn't, just because the son is at your same brokerage is irrelevant.

That said, for them to state that their broker does not allow it sounds suspect. I do know that some brokerages do not want to give the appearance or impression of being one of the "discount brokerages" but to think that a regular full service brokerage would not allow an agent to provide a client with a discount for multiple listings or other circumstances which could warrant a discount would not be good as many agents would likely not be willing to hang their license there if that was actually the case. Sounds more like good cop bad cop with the agent blaming the brokerage to not give a discount.

4 Reply

Dustin Allen

Real Estate Agent · South Lake Tahoe, CA · Member since 2016 · 680 posts · 644 votes

4y

@Joanne Green

Two questions:

1) Do you think a discount broker would have provided the same level of service and achieved the same or better result?

2) Would you want the agent to try to negotiate a higher commission if they had brought you an offer significantly over your asking price?

It sounds like you got a great offer in a good amount of time and are going to have a successful sale. Negotiate a variable rate commission next time and go for the higher level of service.

OP

Member since 2022 · 11 posts · 4 votes

4y

Thank you Will. That was precisely my feeling when she told me her brokerage didn't allow it, that she was not wanting to take responsibility herself for denying me. Really gave me a bad feeling. It never occurred to me to negotiate this type scenario prior to signing the contract, but I definitely will in the future. The inspection is upcoming and I will be very interested to see how they handle when repairs are requested.

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Russell BrazilBusiness Member

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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes

4y

That type of discount should have been negotiated when you entered into the listing agreement, not after a contract to sell the house was purchased. Imagine it like any other profession.....you have a contract to buy a car, and want to renegotiate a price to a lower number after you already signed the contract. Imagine your buyer of the house wants to negotiate a lower sales price 2 weeks from now after the contract is signed.

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Dwayne Poster

Investor · Van Isle · Member since 2021 · 455 posts · 226 votes

4y

you missed the opportunity on the listing agreement. Yes, when someone catches you on it may bother you, but it was your lack, not theirs. Take it for what it is, an opportunity to learn.

Sonny Vu

Flipper/Rehabber · Saratoga, CA · Member since 2015 · 49 posts · 16 votes

4y

@Joanne Green. I am sorry you went through this and I can feel the angst in your post. I am sure that all realtors strive to keep their clients happy and want to avoid anything that would cause what you are feeling now. All the responses posted previously are 100percent accurate, but it sounds like a failure on your agent’s part to explain the possibility of dual agency when they obtained the listing from you. That should have been made clear to you when you signed the listing agreement and a discussion regarding variable commission should have taken place during the listing presentation.

That being said, Will is right in that it’s irrelevant that the son gained a client from showing your home. That’s part of the real estate marketing process and many agents acquire new clients from open houses. There’s a lot of prep time and time behind the scenes that they put in to market your home. Hopefully you are happy with everything else that was done on your behalf in the process and I hope you end up happy at closing. Good luck and congratulations!

-Sonny

Alan Ouellette

Member since 2021 · 44 posts · 27 votes

4y

@Joanne Green Wow, there is sooo much conflict of interest. I agree, it feels like you should get a discount at a minimum. Also, it might be worth looking into the codes of conduct for realtors in your state to make sure things are above the board on this. Or at least make contact with the brokerage directly to confirm the policy. Bad energy with this one. Good luck and let us know how it goes.

3 Reply

Sonny Vu

Flipper/Rehabber · Saratoga, CA · Member since 2015 · 49 posts · 16 votes

4y

@Alan Ouellette. CA is one of the states that allow dual agency. There are many others that do not. I am a realtor and personally, not a fan of dual agency. But if the agent stays professional and maintains their fiduciary responsibility to their client, it can be done ethically. But I agree, Joanne should have been able to get a discount, if she negotiated it in her listing agreement. Unfortunately, that is not her current situation and hopefully her agents can make her feel better by getting her the best offer out there.

3 Reply

OP

Member since 2022 · 11 posts · 4 votes

4y

Thank you Dustin. Very good points. Honestly I can't answer question #1 but I think I would be tempted to see, if I could save $40k+ in the process. And that's the crappy thing about this experience... I'm no longer a true believer in the "full service" model after this experience.

OP

Member since 2022 · 11 posts · 4 votes

4y

Quote from @Russell Brazil:

That type of discount should have been negotiated when you entered into the listing agreement, not after a contract to sell the house was purchased.

Definitely concede this point but I must say it never occurred to me to discuss this possibility prior to signing the contract. I will next time. In all fairness, I'd be shocked if many realtors actually discuss this with clients prior to signing a contract. I don't have a whole lot of experience but it sure has never happened to me before.

OP

Member since 2022 · 11 posts · 4 votes

4y

Quote from @Sonny Vu:

@Joanne Green. I am sorry you went through this and I can feel the angst in your post. I am sure that all realtors strive to keep their clients happy and want to avoid anything that would cause what you are feeling now. All the responses posted previously are 100percent accurate, but it sounds like a failure on your agent’s part to explain the possibility of dual agency when they obtained the listing from you. That should have been made clear to you when you signed the listing agreement and a discussion regarding variable commission should have taken place during the listing presentation.

That being said, Will is right in that it’s irrelevant that the son gained a client from showing your home. That’s part of the real estate marketing process and many agents acquire new clients from open houses. There’s a lot of prep time and time behind the scenes that they put in to market your home. Hopefully you are happy with everything else that was done on your behalf in the process and I hope you end up happy at closing. Good luck and congratulations!

-Sonny

Thank you for your comments Sonny. I know its irrelevant from a legal standpoint, and I don't discount the agent's own hard work in gaining those contacts, my only point in bringing it up is that my listing has had a uniquely profitable outcome for them... double the commission on my house as well as directly gaining two other commissions, and under those circumstances perhaps "rebating" a bit of the commission to me would have been a show of good faith. As it is, it feels very money-grubbing on their part, and makes me wonder if all else has been above board, e.g., did they turn down any showings? Did they discourage any other potential buyers in any way? I'll never know for sure and honestly to some extent (perhaps unfairly) they have lost my trust.

Wilson Phu Bang

Realtor · Los Angeles County / Orange County · Member since 2021 · 26 posts · 17 votes

4y

Hi @Joanne Green

Agreed with other's assessment that this should be done upfront during the listing agreement. Typically when I meet with clients for the listing agreement I will go over different scenarios to understand how the offers may come in and this is one of the ones that we talk about during that process. In some cases there can be terms written for dual-agency. When situations arise with offers in place from multiple buyers including ones who are not represented, I always let the seller decide based on my advisement and leave it up to them to pick the best offer that will meet their needs. Ultimately just focus on getting the escrow closed and ensuring you are fairly represented from your agent and they are protecting your best interest.

Zion Bar

Member since 2018 · 13 posts · 7 votes

4y

so they did what you hired them to do, and after they've done their job, you want a discount because you feel like you deserve it?

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Jared HottleBusiness Member

Real Estate Agent · Cedar falls IA Waterloo, IA · Member since 2020 · 902 posts · 549 votes

4y

In Iowa you have to consent to dual agency meaning consent to the brokerage having both the buyer and seller in a transaction as a broker and salesperson have fiduciary responsibility to the their client and when they are helping 2 clients on the same transaction there can be perceived or possible real conflict of interests. Obviously when you aren't selling a-lot of houses there are many things you don't know that you don't know as a seller. In my opinion, it is best to talk about these things up front before any documents are signed. So maybe for the next transaction say I did not like when I did not get a discount rate when you brought the buyer, I would like a discount rate if you bring the buyer this time. Or if you really did not like the dual agency tell them you do not consent to dual agency. I think both of these have negative consequences potentially to marketability of the home but if it helps you feel better about the sale it is worth it.

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OP

Member since 2022 · 11 posts · 4 votes

4y

Quote from @Zion Bar:

so they did what you hired them to do, and after they've done their job, you want a discount because you feel like you deserve it?

Exactly what I said. Lol.

OP

Member since 2022 · 11 posts · 4 votes

4y

Thank you all (or most of you) for your good advice and information. I'm definitely calming down. Really appreciate it.

Jessica A Keeney

Real Estate Agent · Anaheim, CA · Member since 2020 · 8 posts · 15 votes

4y

Did you have multiple offers and if so, was that the best one?

Matt M.

Specialist · Easton, PA · Member since 2018 · 1k+ posts · 2k+ votes

4y

What is the difference if you agreed to 5% and they ended up listing and selling the house? You are still paying 5% and your house is getting sold. End of story.

Jimmy O'Connor

Real Estate Agent · Philadelphia, PA · Member since 2018 · 428 posts · 484 votes

4y

@Joanne Green I’d be happy about that set up. With it, you’re more likely to get complete transparency and communication between your agents to get the transaction to the closing table. Not worth dipping into their pockets, especially since it’s two separate people, not the same person getting the “full” commission (I use quotations because brokerages take absurd fees from agents).

And making a brokerage policy to not change their commission agreement doesn’t seem suspect, it seems like a good practice so clients don’t walk over agents, something that happens all the time

Marcus Auerbach

Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes

4y

@Joanne Green - I can see how this rubs you the wrong way, but here is another way to look at it.

If the son would not have built rapport quickly with a walk in buyer (not an easy task) you would have not gotten the offer you have! He literally sold the house for you, that's why the buyers agent is referred to the as the "selling agent".

If he would not have done that, you would have signed the 2nd best offer you had (I assume you had more than one). It would have been much easier for the son to capture the contact and then say, hey I'll show you 5 other houses. That is actually the safer way for the agent to build rapport and trust with a walk in...

The irony is most seller's will pick a listing agent they feel confiednt in their ability to "sell the house" and when they actually pull that off then the seller wants a discount?

I also don't think they are playing god cop bad cop with you: The listing contract is between the brokerage and you, the agent does not have authority to change it without a signature from the broker. If you read your listing contract it even says that (at least in Wisconsin).

This setup really increases the odds of getting the contract across the finish line. If you are happy with the offer you have accepted, the next thing that you want is to actually get the deal closed and it sounds like you are well on your way.

Theresa HarrisPro Member

Member since 2019 · 15k+ posts · 11k+ votes

4y

You agreed to the commission, both still have to do that same amount of work.

OP

Member since 2022 · 11 posts · 4 votes

4y

Quote from @Jimmy O'Connor:

@Joanne Green I’d be happy about that set up. With it, you’re more likely to get complete transparency and communication between your agents to get the transaction to the closing table. Not worth dipping into their pockets, especially since it’s two separate people, not the same person getting the “full” commission (I use quotations because brokerages take absurd fees from agents).

And making a brokerage policy to not change their commission agreement doesn’t seem suspect, it seems like a good practice so clients don’t walk over agents, something that happens all the time

Thank you for this Jimmy. This is very helpful.

OP

Member since 2022 · 11 posts · 4 votes

4y

Quote from @Marcus Auerbach:

@Joanne Green - I can see how this rubs you the wrong way, but here is another way to look at it.

If the son would not have built rapport quickly with a walk in buyer (not an easy task) you would have not gotten the offer you have! He literally sold the house for you, that's why the buyers agent is referred to the as the "selling agent".

If he would not have done that, you would have signed the 2nd best offer you had (I assume you had more than one). It would have been much easier for the son to capture the contact and then say, hey I'll show you 5 other houses. That is actually the safer way for the agent to build rapport and trust with a walk in...

The irony is most seller's will pick a listing agent they feel confiednt in their ability to "sell the house" and when they actually pull that off then the seller wants a discount?

I also don't think they are playing god cop bad cop with you: The listing contract is between the brokerage and you, the agent does not have authority to change it without a signature from the broker. If you read your listing contract it even says that (at least in Wisconsin).

This setup really increases the odds of getting the contract across the finish line. If you are happy with the offer you have accepted, the next thing that you want is to actually get the deal closed and it sounds like you are well on your way.

Marcus this is a very helpful perspective & I actually am starting to feel some relief. Thank you for taking the time to write it.