realtor lets negotiation period expire

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realtor lets negotiation period expire

Leland S.
Developer · LA, Nashville TN · Member since 2015 · 295 posts · 75 votes

I had my house on Zillow as FSBO and this snakey agent had a buyer but all along the way would say disingenuous things to get the best deal and take advantage of me the whole way. We ended up under contract and during the inspection negotiations the buyer requested a bunch of silly things to do that I didn't want to pay for, some were a few knobs we tightened with a screw driver. So I declined and offered only to do them if we take the buy price up to the full value ask price I had come down by 10k from. I stayed firm in my response but the guy kept harassing me texting and emailing non stop telling me how the contract would be void and I'd lose my earnest money (not even 1%) etc etc. All the way up til midnight of the 3 day deadline where if negotiations couldn't resolve the contract becomes void. He emails me "5 minutes...", then exactly at midnight, past the 3 day mark he emails me a signed notice from the buyers from 10:41pm that night that they accept the house AS IS. This realtor tried to continue to strong arm me with threats of lawsuits and the contract expiring all the way until midnight. But he was 1 minute late on sending me the notice the buyers already agreed to an hour 20 min before then! I brought up to him that he was 1 minute late and according to the contract that means it is expired. He then sent off a firestorm of messages to me and a phone message agreeing it was expired, but he would send me an extension. I didn't sign the extension and now I signed releasing them from the contract.

I wonder if he broke any rules of conduct since he didn't take his buyer's agreement to save the house deal. He didn't represent their interests. I'm confused about his strange behavior, but I'm also glad to let him go and I hope his buyers find a way to let him go. Sad thing is that they really loved and wanted the house for a variety of reasons. I'm tempted to email the buyers and apologize on behalf of the realtor and make sure they understand he broke the contract, I'd imagine he's found a way to say that I broke it. 

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Charlie MacPherson
China, ME · Member since 2014 · 3k+ posts · 4k+ votes
9y

@Leland S.

These are the cases where FSBOs get hurt because they're so focused on not paying a commission.

If I were representing you, I'd never let a buyer's agent get away with strong-arming you.  In fact, in a seller's market like this, I'd be strong-arming HIM!  I'd do my best to stoke up a bidding war and let him tell me what concessions his side is prepared to make.

From what I'm reading it sounds like you were in a routine negotiation and you seem to have taken offense that the other side wanted a better deal.  

Please forgive me for saying so, but this is the mark of an untrained negotiator - a rookie.  In these cases, a trained negotiator will walk all over you.  

For example, I just sold a Boston-area home for another BP'er.  I laid out a plan to create a bidding war.  We had about 65 people through the open house and had 7 offers the next day.  I negotiated the high bidder up an additional $3,000 and got them to drop the home inspection.  We are at $49,600 over asking price.

Sure, he could have saved the $20,000+/- commission by going FSBO, but I think he's pretty darn happy that he had me on his side.

At this point, my recommendation would be for you to contact that agent and tell him that you will accept a full price offer, as-is - with no further concessions and get those terms in writing.

PS - even if the buyers later purchase your home without this agent, he will have a strong claim for commissions as he is what is called the "procuring cause" of the sale.

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  • Leland S.
    OP
    Developer · LA, Nashville TN · Member since 2015 · 295 posts · 75 votes
    9y

    @Dan Bernstein Under normal circumstances, I understand that. In this case, Zillow kindly referred MY post that I listed to some random realtor.. the people found it on Zillow. So this realtor got a lead because of me. In that case, I think it's right to negotiate down commission to pay for their services in helping close. When listed on the MLS, you definitely want standard commission to have realtors spend the time lining up buyers with your property and showing it. In this case the buyers came and said - I want to see this.

    0Reply
  • Brian Pulaski
    Flipper/Rehabber · Montgomery, NY · Member since 2016 · 2k+ posts · 1k+ votes
    9y

    @Leland S. What did you offer for a commission? Buyers finding their own homes yet still using a realtor is how a lot of this happens now-a-days. I found my current home and sent it to my realtor. It was sold. I found it again later (after the sale fell through) only because there was an open house listing. I wouldn't expect a reduced commission for my realtor, because I found the house and said I want to see it.

    0Reply
  • Riley Bishop
    Real Estate Agent · Scottsdale, AZ · Member since 2017 · 8 posts · 1 vote
    9y
    Negotiation of commission in the sales contract in theory makes the agents/brokers a party to the transaction, rather than just paid facilitators. legal HEADACHE.
    0Reply
  • Charlie MacPherson
    China, ME · Member since 2014 · 3k+ posts · 4k+ votes
    9y

    Here in MA, the courts have ruled that contracts can be formed by emails and text messages, so be careful about what you say in them.

    Many agents will have a disclaimer in their email signatures like this: "Nothing in this email is intended to form a contract..."

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  • Leland S.
    OP
    Developer · LA, Nashville TN · Member since 2015 · 295 posts · 75 votes
    9y

    @Brian Pulaski I actually already had negotiated him to 2.8% initially, but I heard many people saying I should've just offerred him a few thousand dollars. Seems like different opinions on this. In my verbal reply for a new contract, I stated 2% commission. 

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  • Charlie MacPherson
    China, ME · Member since 2014 · 3k+ posts · 4k+ votes
    9y

    @Leland S.  A good agent will have a minimum commission.  I certainly have mine. 

    You're more likely to pressure an agent that we call "Part-Time Patty" into giving away her income, but you'll get what you pay for.

    Patty (not a real person) has blond hair, blue eyes, 2 1/2 kids and a puppy.  She spends her time running around in her minivan to soccer games, PTA meetings and play groups - and walking the puppy.  She hopes she'll trip over a few deals per year.  

    She treats real estate more as a hobby than as a serious business - and she is the bane of our industry.  There are thousands of them - and for the record, the last one I dealt with was male.  His full time job was serving as a waiter at an ice cream shop, and he made our deal miserable - or should I say, a Rocky Road.

    Part-Time Patty will drop her drawers on commission because she's a weak negotiator - and she's the very last person you want representing you.

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  • Brian Pulaski
    Flipper/Rehabber · Montgomery, NY · Member since 2016 · 2k+ posts · 1k+ votes
    9y

    @Charlie MacPherson would you have done the deal for 2.8%? What about the 2%?

    In my previous area real estate commission was 5-6%. I never found anyone less or more (never negotiated less, so I'm not sure). Using that logic, I went with 2.5% figuring that's ballpark where they want/expect to be. I have heard/read that some realtors require 3% on their split and if the seller offers less, the buyer has to pay. Is this true, or internet lore?

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  • Charlie MacPherson
    China, ME · Member since 2014 · 3k+ posts · 4k+ votes
    9y

    @Brian Pulaski Both for seller negotiations and anti-trust reasons, I don't publicly discuss my commissions.

    I will say that I have a hard threshold, below which I'll refer a client out to someone else.

    I don't know about NY, but here in MA the buyer's agent is obligated by MLS rules to accept whatever commission is stated in the listing.

    They cannot request more from the seller, though they can from the buyer. Of course, that has to be properly disclosed in a contract with the buyer.

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  • Brian Pulaski
    Flipper/Rehabber · Montgomery, NY · Member since 2016 · 2k+ posts · 1k+ votes
    9y

    Thanks for the info/feedback @Charlie MacPherson. I have just never experienced a realtor trying to negotiate.

    0Reply
  • Leland S.
    OP
    Developer · LA, Nashville TN · Member since 2015 · 295 posts · 75 votes
    9y

    @Brian Pulaski The realtor that contacted me from my fsbo add flatly said, "are you ok with the standard 3%". I foolishly agreed immediately. Later due to something I said, he gave back .2% to me and signed a separate addendum. 

    Currently I'm working with a professional for 4% commission, 1.5% seller side. I've had 4 realtors (professionals and experienced) accept lower commissions. Why? Because in the area the inventory is so low, realtors can't even find homes to sell. I believe also this gives incentive to find a buyer rather than just drop on the MLS and host a few open houses then sit back for offers.

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  • Brian Pulaski
    Flipper/Rehabber · Montgomery, NY · Member since 2016 · 2k+ posts · 1k+ votes
    9y

    @Leland S. sounds like this is very area dependent. In your situation getting a realtor going to bat for you is probably the right move. You only listed it FSBO correct? Did you use a direct MLS access company or simply put it on Zillow and the like? When I did direct MLS listings they require me to indicate the buyer should agent commission I will pay.

    0Reply
  • Jacob Bindler
    Investor · Hastings On Hudson, NY · Member since 2016 · 107 posts · 20 votes
    9y

    I reply to Leland pm, but this is a part of it: 

    About 4% broker. Here is my personal experience with such things. Your broker will take an assignment, but will try to take all the commission himself since the seller's part is really too small for him to do any meaningful work. He will not market it at all but will try to find a buyer without an agent. The chances are you will either lose time or money or both. You centrally will not get the highest price because your pool of potential buyers will be small. If I were to go this route I would separate the responsibilities: hire 1% guy to do the MLS, answer the calls and do the showings, but also promise a separate 3% commission to a buyer's agent. I would not take any buyers from my listing agent and market the property myself or with the help of vendors. It will be a bit more cost or work for you, but you will be in control and expand the number of buyers. Competition is the only way to bid up the price.

    0Reply
  • Malcolm Lawson
    Annapolis, MD · Member since 2015 · 132 posts · 52 votes
    9y

    I don't think the agent was necessarily "strong arming" you, they were just being aggressive for their clients which is what they are supposed to do. If you had an agent in your corner who was just as aggressive perhaps they could have negotiated the deal at the full asking price for you and saved you allot of headaches.  

    Also, if the clients signed the paperwork just an hour and twenty minutes before the deadline then the agent might not have just been sitting on it like you are assuming.  Maybe the clients did not email it back right away, maybe the agent just did not see the email as soon as it came in especially at 11:00 pm.  Frankly, I have to give the agent props for staying up until midnight to try and make the deal go through.  As an agent, I typically stop working at 7 pm to feed, bathe and put my kids to bed.

    So if they accepted your offer to buy the house as-is which is what you wanted, why did you not just accept it?

    0Reply
  • Leland S.
    OP
    Developer · LA, Nashville TN · Member since 2015 · 295 posts · 75 votes
    9y

    @Brian Pulaski @Jacob Bindler I first started using a flat fee MLS service and did get several showings, but I had it listed at an unreasonable price. I did offer 3% to the buyer realtor. After the first 2 weeks I had nothing, I didn't do any other advertising so i dropped the price to what it actually appraised at, then decided to take it off cause my HOA wasn't fixing my sewer.

    From there I ran FSBO on zillow and let it sit then dropped the price and the random buyers found it.

    I think this realtor is doing a bang up job even with reduced commission. 30 people showed up to the first open house.

    0Reply
  • Leland S.
    OP
    Developer · LA, Nashville TN · Member since 2015 · 295 posts · 75 votes
    9y

    @Malcolm Lawson It was a digital signature, so he gets the notifications. Believe me he knew... he was blowing up my phone all the way til midnight then exactly at midnight sent the official notification with the signed form from earlier. The problem (for his buyers) is that his tactics ended up shafting his execution and he failed his buyers. I actually do feel really bad he was so negligent for his buyers over a few hundred dollars in negotiations. I'd imagine he failed to meet some sort of realtor code of ethics. 

    I was find to keep the deal, but my business partners wanted out after all this guy's antics so I opted to go that route. 

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