Hello fellow agents!
Wanted to share a story with you that just happened to me, hopefully this never happens to you..
An acquaintance (let's call him John) reached out to me in July and told me he want me to help him find a residential home for his family. I said, sure why not. We started looking at houses in the weekends. John would locate the houses he was interested in, and I would pull the comps for him prior to showing him the houses. We saw about 10 houses and he still had not decided, as a matter of fact, he was looking at houses worth $320k but was willing to offer $270k, and these houses didn't even need ANY tender loving care at all! These were all very nice houses in great neighborhoods. All this while, I would tell him that don't worry about me, you are not paying me, the seller will be paying my commission.
After two months of showing him houses and spending many hours consulting him on good areas in Houston, he decided to go and talk to builders. He talked with two builders about newly built homes. The builder told him that if he uses the builder's realtor, then the realtor would take a flat fee of $2000, the rest would go back to John towards his closing costs.
John approached me by telling me all of this, and that he also had talked to another friend of his who had told John that he knows a realtor who can do it for $2000 as well. John said, "Naeem, you can either do it for a flat fee of $2000 or I will use the other realtor. Because we don't have any agreement between you and I". This is when I regretted not having a signed agreement between John and I. I was obviously not happy with this, but decided that since I had already spent two months showing John houses, I might as well get paid $2000.
After I agreed to the $2000 flat fee, John talked with three other builders, signed a contract with one of them, backed out of it, and then signed another contract with another builder.
The house was listed at $309,888, including many upgrades. I negotiated it down to $305,000 including the upgrades, builder pays closing costs and loan origination fees, plus the builder agreed to a BTSA of $5000. John signed the contract two days ago, and is expecting me to give him the BTSA of $5000 as well. So my potential payday went from $9000 (3% commission) + $5000 (BTSA), to only $2000.
I understand that Realtors might give parts of their commission to the buyer, buy is it commons to give away the BTSA as well?
If any experienced Realtors have any feedback about if there is any way I can get the BTSA into my pocket, that would be great. Regardless, I just wanted to share this story with you all, so that you can avoid this happening to you!
I appreciate you reading all the way through, and would love to get some constructive feedback.
