Comments on: A Disgruntled Developer Tries to Get Back Commissions Already Paid to Agents http://www.biggerpockets.com/renewsblog/2008/02/04/a-disgruntled-developer-tries-to-get-back-commissions-already-paid-to-agents/ Learn, Network, Invest Wed, 08 Oct 2008 01:32:41 +0000 http://wordpress.org/?v=2.6.1 By: Paul Bazzo http://www.biggerpockets.com/renewsblog/2008/02/04/a-disgruntled-developer-tries-to-get-back-commissions-already-paid-to-agents/#comment-54407 Paul Bazzo Thu, 07 Feb 2008 19:58:46 +0000 http://www.biggerpockets.com/renewsblog/2008/02/04/a-disgruntled-developer-tries-to-get-back-commissions-already-paid-to-agents/#comment-54407 A clarification about commissions to those who think it's ridiculous that anything was advanced: Realtors were pitched these pre-construction projects back in 2003-2004-2005 and asked to bring prospective buyers. Buyers had to put 20% down and wait for three years for the project to be completed. At the time, Related paid the realtors a fraction of the commission (usually 25% with the first 10% deposit at signing, another 25% with the 2nd 10% deposit about three months later, and would disburse the remaining 50% at closing, which they have not paid). The brokers being sued by Related right now dedicated a considerable amount of time and effort into getting these buyers, who at the time (three years back) were interested in buying. Related didn't advance commissions without getting something substantial in return (20% deposit). Moreover, they are keeping the deposits of those who right now are unable or unwilling to close, which makes up several times for the commissions disbursed. The lawsuit is ridiculous and will backfire. Brokers did their part of the job and got Related millions of dollars which allowed it to undertake the projects. They already paid taxed on the money and spent it. They also were not paid 100% of the agreed commission, but typically only about half. Related should be content with not having to disburse the remaining half. But boy are they greedy... A clarification about commissions to those who think it’s ridiculous that anything was advanced:

Realtors were pitched these pre-construction projects back in 2003-2004-2005 and asked to bring prospective buyers. Buyers had to put 20% down and wait for three years for the project to be completed. At the time, Related paid the realtors a fraction of the commission (usually 25% with the first 10% deposit at signing, another 25% with the 2nd 10% deposit about three months later, and would disburse the remaining 50% at closing, which they have not paid).

The brokers being sued by Related right now dedicated a considerable amount of time and effort into getting these buyers, who at the time (three years back) were interested in buying.

Related didn’t advance commissions without getting something substantial in return (20% deposit). Moreover, they are keeping the deposits of those who right now are unable or unwilling to close, which makes up several times for the commissions disbursed.

The lawsuit is ridiculous and will backfire. Brokers did their part of the job and got Related millions of dollars which allowed it to undertake the projects. They already paid taxed on the money and spent it. They also were not paid 100% of the agreed commission, but typically only about half. Related should be content with not having to disburse the remaining half. But boy are they greedy…

]]> By: Nadine http://www.biggerpockets.com/renewsblog/2008/02/04/a-disgruntled-developer-tries-to-get-back-commissions-already-paid-to-agents/#comment-54368 Nadine Wed, 06 Feb 2008 15:21:11 +0000 http://www.biggerpockets.com/renewsblog/2008/02/04/a-disgruntled-developer-tries-to-get-back-commissions-already-paid-to-agents/#comment-54368 Very nice reading and it works me well. Thanks for it. Very nice reading and it works me well. Thanks for it.

]]> By: Steven Boorstein http://www.biggerpockets.com/renewsblog/2008/02/04/a-disgruntled-developer-tries-to-get-back-commissions-already-paid-to-agents/#comment-54358 Steven Boorstein Wed, 06 Feb 2008 05:04:34 +0000 http://www.biggerpockets.com/renewsblog/2008/02/04/a-disgruntled-developer-tries-to-get-back-commissions-already-paid-to-agents/#comment-54358 Very interesting. Lots of problems arising from this down real estate cycle, huh? It appears you have a builder that was trying to provide an incentive to agents by offering "early" commissions. Not a bad thing, but very risky. Then you have agents who accept this, but arent't willing to pay it back when their buyer doesn't close. Why? Because they're hurting, too. But it would seem to me that the agent is then unethical, no? I know of other industries where the salesman is fronted the monies, but is then debited the commission if the deal doesn't go to completion. Why would this be any different? Not that I am on the side of the builder, but you would think that these agents are the unethical ones here. Steven Boorstein Very interesting. Lots of problems arising from this down real estate cycle, huh? It appears you have a builder that was trying to provide an incentive to agents by offering “early” commissions. Not a bad thing, but very risky. Then you have agents who accept this, but arent’t willing to pay it back when their buyer doesn’t close. Why? Because they’re hurting, too. But it would seem to me that the agent is then unethical, no? I know of other industries where the salesman is fronted the monies, but is then debited the commission if the deal doesn’t go to completion. Why would this be any different? Not that I am on the side of the builder, but you would think that these agents are the unethical ones here.

Steven Boorstein

]]> By: Lake Michigan Beach Builders http://www.biggerpockets.com/renewsblog/2008/02/04/a-disgruntled-developer-tries-to-get-back-commissions-already-paid-to-agents/#comment-54355 Lake Michigan Beach Builders Wed, 06 Feb 2008 04:36:57 +0000 http://www.biggerpockets.com/renewsblog/2008/02/04/a-disgruntled-developer-tries-to-get-back-commissions-already-paid-to-agents/#comment-54355 Just when you think you have seen it all... Who pays the realtors before the deal closes? I will be double checking my listing agreements from now on to be sure! Just when you think you have seen it all… Who pays the realtors before the deal closes?

I will be double checking my listing agreements from now on to be sure!

]]> By: Bad Credit Loan http://www.biggerpockets.com/renewsblog/2008/02/04/a-disgruntled-developer-tries-to-get-back-commissions-already-paid-to-agents/#comment-54350 Bad Credit Loan Tue, 05 Feb 2008 23:45:44 +0000 http://www.biggerpockets.com/renewsblog/2008/02/04/a-disgruntled-developer-tries-to-get-back-commissions-already-paid-to-agents/#comment-54350 I wonder if this legal action going to do anything. In my personal opinion it will not since the charges are too low, comparing to company's profits. I wonder if this legal action going to do anything. In my personal opinion it will not since the charges are too low, comparing to company’s profits.

]]> By: Mattresses http://www.biggerpockets.com/renewsblog/2008/02/04/a-disgruntled-developer-tries-to-get-back-commissions-already-paid-to-agents/#comment-54337 Mattresses Tue, 05 Feb 2008 15:17:23 +0000 http://www.biggerpockets.com/renewsblog/2008/02/04/a-disgruntled-developer-tries-to-get-back-commissions-already-paid-to-agents/#comment-54337 this behavior is downright unethical. this behavior is downright unethical.

]]> By: Nikhil http://www.biggerpockets.com/renewsblog/2008/02/04/a-disgruntled-developer-tries-to-get-back-commissions-already-paid-to-agents/#comment-54333 Nikhil Tue, 05 Feb 2008 11:11:01 +0000 http://www.biggerpockets.com/renewsblog/2008/02/04/a-disgruntled-developer-tries-to-get-back-commissions-already-paid-to-agents/#comment-54333 This is something which is not acceptable from a reputated builder/real estate developer the same goes for few of the real estate consultant's.Thats really bad from those real estate consultants .That's the reason why its always considered good to do the market survey first to find out the best of the best real estate consultant. This is something which is not acceptable from a reputated builder/real estate developer the same goes for few of the real estate consultant’s.Thats really bad from those real estate consultants .That’s the reason why its always considered good to do the market survey first to find out the best of the best real estate consultant.

]]>