Bonus commission from buyer to listing agent?

Buying & Selling Real Estate
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Bonus commission from buyer to listing agent?

Nat C.
Investor · Miami, FL · Member since 2013 · 807 posts · 475 votes

I went and saw a property today that came up on the MLS. I called the listing agent and said I want to submit an offer at list price. So we made plans to meet tomorrow.

Then she sends me a text and asks if I can do bonus commission. I had no idea what that was so I asked what she meant. She texted back that 'some buyers offer bonus commission to listing agent- its totally legal'.

To me it sounds like bribe money. 

I'm a direct buyer with no buyers agent so she'll already get a 6% commission as opposed to 3%. Does anyone have any thought about offering a further 'bonus commission'?

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Chadi D.
Real Estate Investor · West Palm Beach, FL · Member since 2013 · 74 posts · 14 votes
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Ya , I see . It is obvious that you don't need them .

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
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    @Nat C. 

     commission are negotiable you can indeed pay an agent more if you so desire but unless they have a buyers broker agreement with you your not obligated..

    I had an agent do that on my very highest flip I did it was a 5 million dollar flip.. she brought it he buyer and she sold me the property.. So I bought it for 2 mi. she doubled ended that so 120k... then I listed it for 5 mil as I am a broker.. she brought in the buyer for 3% or 150k and then wanted a bonus because of all that she had done.. NOw granted we made a deep into 7 figure profit but we also had the cash when no one else would step up and buy this type of home which is somewhat rare in our market place.

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  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
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    This must be in Miami.  While technically legal, not ethical, and I've never even heard of any one asking.  They must think you are clueless.  You would probably best be served by having a good buyer's agent.  An aggressive buyer agent can make sure the owner sees your offer, even when playing with the Cuban Mafia Agents (what I tell my Miami agent buddies they are members of).

    1Reply
  • Nat C.
    OP
    Investor · Miami, FL · Member since 2013 · 807 posts · 475 votes
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    Thanks for the info! So what would be a suitable bonus commission to offer?

    0Reply
  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
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    Zero!  It's just slimy asking for it as the listing agent.

    0Reply
  • Kirk R.
    Peoria, IL · Member since 2013 · 967 posts · 383 votes
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    She is already getting the 6% if it goes through?  If you go to another Realtor to represent you, her commission goes to 3%?  She has to present all offers to her seller I think.

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  • Dawn BrenengenBusiness Member
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    Real Estate Broker · Raleigh, NC · Member since 2014 · 2k+ posts · 1k+ votes
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    Wow! What cajones she has! 

    Please don't give her a "bonus".

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  • Nat C.
    OP
    Investor · Miami, FL · Member since 2013 · 807 posts · 475 votes
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    Originally posted by @Wayne Brooks:

    Zero!  It's just slimy asking for it as the listing agent.

     Yes I thought it was slimy. But there are A LOT of slimy people in real estate in Miami.

    0Reply
  • Joel OwensBusiness Member
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    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
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    MONEY MOTIVATES

    The broker/agent wants to make as much as possible and so do you off of your purchase ( buying a deal ).

    How expensive is this property?? If it's a 50,000 property then both sides is 6% for 3,000. The listing broker/agent could have also taken less of a fee from the seller and is now trying to make it up.

    I am not saying this is right or wrong. Just people need to deal in the real world of how deals get done.

    Now the broker/agent should be a fiduciary and put the clients interest ahead of their own. If they are acting only in ministerial acts as a transaction broker then it can change things as you can have a customer and not a client relationship.

    It's all about the details.   

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  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
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    Nat:  don't do it.  To get this deal done, sign the dual listing agreement and the agent will get her full 6 or 5% (whatever the seller is offering).  And then get yourself a buyer's agent for the future.  Those games are to be avoided in the future .  If you're a viable cash buyer, there are plenty of agents who will go to bat for you for 1/2 ( 3%) of the typical sales commission offered by the seller.

    2Reply
  • Nat C.
    OP
    Investor · Miami, FL · Member since 2013 · 807 posts · 475 votes
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    Originally posted by @Account Closed:

    Nat:  don't do it.  To get this deal done, sign the dual listing agreement and the agent will get her full 6 or 5% (whatever the seller is offering).  And then get yourself a buyer's agent for the future.  Those games are to be avoided in the future .  If you're a viable cash buyer, there are plenty of agents who will go to bat for you for 1/2 ( 3%) of the typical sales commission offered by the seller.

     I don't like buyers agents and I don't use them anymore. I find they just get in the way. I can get more information, negotiate better and get a better price going in directly. 

    Buyers agents were fine when I was young and green but now I'm better off without.

    1Reply
  • Chadi D.
    Real Estate Investor · West Palm Beach, FL · Member since 2013 · 74 posts · 14 votes
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    Ya , I see . It is obvious that you don't need them .

    5Reply
  • Jonna WeberPro Member
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    Investor · Boise, ID · Member since 2011 · 1k+ posts · 736 votes
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    I haven't heard of that happening in Idaho - not to say it doesn't.  

    Regarding this stance on buyer's agents:  

    "I don't like buyers agents and I don't use them anymore. I find they just get in the way. I can get more information, negotiate better and get a better price going in directly."

    I do have to beg to differ on that one.  I work extremely hard to negotiate the very best pricing and terms for my investor clients on the buy side - and can operate in total good faith knowing that I am working solely on behalf of him or her.  My brokerage does the same on/his her behalf.  Just like in a legal situation, my take is that it is the wise to have your own representation.  

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  • Sam Leon
    Investor · Fort Lauderdale, FL · Member since 2012 · 1k+ posts · 465 votes
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    I used to use a buyer agent and kept running into walls with every deal even paying all cash with no contingency.  It is even hard to get in to see the property.  Mist times it would be met with "keys not yet received from seller" to "seller shows on Saturdays only" or some other excuses.  Most of those are short sales.  Then suddenly the buyer agent finds out a contract has been executed and we didn't even get to the first base.

    I decided to go at it myself, and it made all the difference.  Doors are opened and I know at least my offers were presented.  I would prefer to have a buyer agent but it really made a difference after I started dealing with the lusting agent myself, this is afterall south florida the most corrupt real estate market there is.

    Bonus commission huh?  I would ask him/her straight up if paying a bonus commission would put you in a better position then other buyers, and which line in the HUD1 this bonus commission will go...

    2Reply
  • Darren SagerPro Member
    Investor · Tampa, FL · Member since 2013 · 2k+ posts · 1k+ votes
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    Wow, that's plain disgusting in my opinion. @Nat C.  I wouldn't pay her a penny and I would try to find another agent to represent me since she's now a dual agent and can't properly representing your best interests in the sale of this property.   She can't fight the fact you can bring in another agent because of the dual agency situation saying she deserves both sides.  She'd lose hands down.  Plus just the fact she asked proves she's only out for her own best interests and not yours. 

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  • Will Wu
    Rental Property Investor · West Palm Beach, FL · Member since 2014 · 81 posts · 50 votes
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    Originally posted by @Sam Leon:

    I used to use a buyer agent and kept running into walls with every deal even paying all cash with no contingency.  It is even hard to get in to see the property.  Mist times it would be met with "keys not yet received from seller" to "seller shows on Saturdays only" or some other excuses.  Most of those are short sales.  Then suddenly the buyer agent finds out a contract has been executed and we didn't even get to the first base.

    I decided to go at it myself, and it made all the difference.  Doors are opened and I know at least my offers were presented.  I would prefer to have a buyer agent but it really made a difference after I started dealing with the lusting agent myself, this is afterall south florida the most corrupt real estate market there is.

    Bonus commission huh?  I would ask him/her straight up if paying a bonus commission would put you in a better position then other buyers, and which line in the HUD1 this bonus commission will go...

     I completely agree with you. Nowadays is really easy to be a realtor and I've seem to many realtors that do not have any negotiation skills. I got much better results dealing directly with the seller or seller agent. The more people involved the more room for misunderstanding and sometimes conflict of interest that might not be your interest at all. Unless you have a realtor that you trust completely I will not want to use a realtor to negotiate for me especially when I can do it directly and sometimes have more room for discount as some seller realtors they are less greedy and are willing to cut their commission to 3% to make the deal happen. 

    0Reply
  • Account Closed
    Investor · San Antonio, TX · Member since 2014 · 142 posts · 104 votes
    11y

    When I'm buying a listed property, I generally go directly to the listing agent, I don't use a buyer's agent.  Since that is the case, I always try to get the listing agent to drop their commission since they will still only be representing one side...the seller.  Usually I do this in connection with an offer.  So I start by suggesting 3%.  It may end up that the listing agent refuses to lower at all.  Hey, nothing ventured nothing gained.  Sometimes they'll drop the commission modestly.  Alot is going to depend on just how good a deal it is.  For what it's worth, where I have seen bonuses used is a bonus paid by the listing agent to the buyer's agent.  A sort of incentive to show the property.

    2Reply
  • Kirk R.
    Peoria, IL · Member since 2013 · 967 posts · 383 votes
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    Realtors are more incentivized to get it done for more money than less.  And sometimes will lower the commission to make it happen.

    seems weird to try to get more commission when getting both sides but saying - never hurts to ask

    0Reply
  • Troy Fisher
    Specialist · Kirkland, WA · Member since 2013 · 1k+ posts · 817 votes
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    All I hear is Kevin O'leary saying: "You're dead to me."

    3Reply
  • Karen MargraveBusiness Member
    Moderator
    Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
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    @Nat C. Are you a licensed agent? If not, you have no obligation to even present an offer to her, but could theoretically present an offer directly to the seller. The seller would still be obligated to pay the broker, taking you out of the middle of the situation. 

    Another option is to call the broker of the listing agent, explain what has happened, and ask if that is the policy of the office. AGENTS are NOT paid commissions, the BROKER is, and their split is between them to negotiate, not you and the agent. 

    1Reply
  • Kirk R.
    Peoria, IL · Member since 2013 · 967 posts · 383 votes
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    @Troy Fisher love how blunt kevin o Leary is.

    0Reply
  • Account Closed
    Homeowner · Pittsburgh, PA · Member since 2014 · 854 posts · 511 votes
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    Originally posted by @Nat C.:
    Originally posted by @Account Closed:

    Nat:  don't do it.  To get this deal done, sign the dual listing agreement and the agent will get her full 6 or 5% (whatever the seller is offering).  And then get yourself a buyer's agent for the future.  Those games are to be avoided in the future .  If you're a viable cash buyer, there are plenty of agents who will go to bat for you for 1/2 ( 3%) of the typical sales commission offered by the seller.

     I don't like buyers agents and I don't use them anymore. I find they just get in the way. I can get more information, negotiate better and get a better price going in directly. 

    Buyers agents were fine when I was young and green but now I'm better off without.

    It is not my intention to be rude, but the mere fact that you created this thread tells me you would benefit from a buyers agent. 

    0Reply
  • Troy Fisher
    Specialist · Kirkland, WA · Member since 2013 · 1k+ posts · 817 votes
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    Originally posted by @Kirk R.:

    @Troy Fisher love how blunt kevin o Leary is.

     If an agent was going to be a dual agent, and then requested an extra commission on top of that?  I'd be blunt just like.  Nope.  And then I'd call a buyers agent and as an addendum I'd make the seller cover closing costs including the commission split.  Greed like this is disgusting.

    0Reply
  • Christopher Gilbert
    Investor · Pflugerville, TX · Member since 2014 · 152 posts · 93 votes
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    We used to see this quite a bit on shortsales where the selling broker would ask for an additional fee, usually in the several thousand dollar range that would be added onto the total that the buyer would have to pay.  Difference with these though is that it is disclosed up front regardless of who buys the properties. 

    I beleive those particular fees were to compensate the seller's agent for having to work with the banks while they sit on the property for a year or more while trying to decide whether to take an offer.  Since the banks will not pay it then they try to get it from the buyer.

    0Reply
  • Mark Del Grosso
    Rental Property Investor · Lockport, NY · Member since 2014 · 119 posts · 109 votes
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    " I started dealing with the lusting agent myself, this is afterall south florida the most corrupt real estate market there is."

    Hmmmm your wife know about this @Sam Leon Lol

    1Reply
  • Bill Gulley
    Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
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    Originally posted by @Nat C.:

    I went and saw a property today that came up on the MLS. I called the listing agent and said I want to submit an offer at list price. So we made plans to meet tomorrow.

    Then she sends me a text and asks if I can do bonus commission. I had no idea what that was so I asked what she meant. She texted back that 'some buyers offer bonus commission to listing agent- its totally legal'.

    To me it sounds like bribe money. 

    I'm a direct buyer with no buyers agent so she'll already get a 6% commission as opposed to 3%. Does anyone have any thought about offering a further 'bonus commission'?

    Interesting and unethical.

    Saying commissions are negotiable is true from the point of an agent representing another party, in this case you won't be represented. She works for the owner.

    I'd probably say yes and ask what she had in mind, I'd be keeping those text messages too.

    I can say yes, since I don't mind paying for a bit of a celebration, or giving tickets to a game.

    She must disclose all compensation to be received from any source in connection with an offer to her principle, be interesting to see if that is done or she wants some side money.

    In such cases, what is done here, folks call the RE Commission, they have local auditors in the area. They will instruct a party to continue under their guidance, bait the bad doer and move in on them or, they will have a "plant" buyer to make an offer or entice business and then nail them.

    I'd take that as  attempted extortion for a favorably presented contract, I'd report it and agree and do it. That's just crooked.

    It's totally different if someone makes an offer to a buyer with a bonus to the listing agent, that is disclosed and part of the offer, or offer to pay the commissions. If you offer more, the agent only gets the % of the increase, paying commission is better to the owner and it doesn't effect the property value or the LTV.

    She needs to be out of the business if your version is correct. :)   

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