REO listing agent is paying the buyer's agent for $1...

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REO listing agent is paying the buyer's agent for $1...

Haiyang A.
Cincinnati, OH · Member since 2015 · 69 posts · 6 votes

Hi, I am looking at a bank REO, with the help of a buyer's agent (following some of the advice here on BP on the importance of not using dual agency). Now our buyer's agent is saying that the listing agent promise to pay our buyer's agent for $1. I'm not sure what to do in this situation. Should I pay my buyer's agent from out of our own pocket then? If so, what's the typical amount? If not, how can my buyer's agent get paid for his work?

Any comments would be appreciated!

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Wayne Brooks
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
10y

Something is  a miss.  Banks wouldn't allow their listing agents to do this.  Do you mean 1%?  Home search auctions do that.

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  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    10y

    Something is  a miss.  Banks wouldn't allow their listing agents to do this.  Do you mean 1%?  Home search auctions do that.

    1Reply
  • William Hochstedler
    Broker · Logan, UT · Member since 2013 · 1k+ posts · 1k+ votes
    10y

    @Haiyang A.

    Also, in the contract you signed with the buyer's agent it should address compensation if there is nothing coming from the seller side.

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  • Mindy JensenPro Member
    BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
    10y

    @Haiyang A., You could sign an agreement with your agent requiring you to be responsible for the commission if the seller does not pay. This allows your agent to include language in the contract that states the seller will pay your agent whatever commission you have agreed upon. Your agent cannot insert this language unless you have signed the first document which obligates you to pay. Your agent is not a party to the contract, and if you are not obligated to pay the commission, it is not in your interest to insert the language into the contract. The agent would be trying to insert the language to benefit themselves, which is not allowed.

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  • Haiyang A.
    OP
    Cincinnati, OH · Member since 2015 · 69 posts · 6 votes
    10y

    Thanks @William Hochstedler and @Mindy Jensen. Our agent just told us that he will be paid the standard 3% commission. Not sure how he managed to do so, but the issue has been resolved.

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  • William Hochstedler
    Broker · Logan, UT · Member since 2013 · 1k+ posts · 1k+ votes
    10y

    @Haiyang A.

    Glad to hear it.  As @Wayne Brooks said, it's unlikely that a bank would allow a listing agent to not pay a buyer side commission.

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  • Phil Z.
    Real Estate Broker · Orange, CT · Member since 2013 · 951 posts · 218 votes
    10y

    - Almost all REOs are 3% to the buyer side.

    - Some people sell Short Sales with a listed $1 commission and verbiage that its subject to banks 

    discretion.  

    - For some reason the agent was unsure about the commission and didn't want to commit to a number.

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