question about realtor commission, should this bother me?
Member since 2022 · 11 posts · 4 votes
I am selling my house and I have an accepted offer. My realtor team is mother/son and what happened was my buyer did not have a realtor so he is using the son-- who was on my team-- but is now also the buyer's agent. Commission paid was agreed to be 5%, sale of house is over 1 million. When I asked for a discount on the commission I was told that the brokerage (not my realtor but the brokerage she works for) does not allow it. Well this kind of bothered me because from what I can tell on the internet (I know, can't believe everything you read) its pretty common practice to provide a discount under these circumstances. And to add to this, it looks like now the son is going to represent my buyer in the sale of his home (reminder the son met my buyer through this transaction) and the son may also represent another buyer who had previously submitted an offer to buy my house, again having met her through this transaction. I really like my realtor but this is making me resentful. Is this how most realtors in Los Angeles would handle this?
As you have now learned, you should negotiate into your listing agreement such discount to the total commission if the list agent reps both sides. In this case, you actually didn't, just because the son is at your same brokerage is irrelevant.
That said, for them to state that their broker does not allow it sounds suspect. I do know that some brokerages do not want to give the appearance or impression of being one of the "discount brokerages" but to think that a regular full service brokerage would not allow an agent to provide a client with a discount for multiple listings or other circumstances which could warrant a discount would not be good as many agents would likely not be willing to hang their license there if that was actually the case. Sounds more like good cop bad cop with the agent blaming the brokerage to not give a discount.
Did you have multiple offers and if so, was that the best one?
There were not multiple offers. This was the second offer brought to me. The first offer also was brought to me by "my" agent who also became the seller's agent. I accepted that offer and that buyer decided to back out after the contract was signed but before she submitted the deposit. After the second offer came in & before I accepted, I asked many times to have additional showings, but that never happened. I know that sometimes that's just what happens but it added to my unease.
I am selling my house and I have an accepted offer. My realtor team is mother/son and what happened was my buyer did not have a realtor so he is using the son-- who was on my team-- but is now also the buyer's agent. Commission paid was agreed to be 5%, sale of house is over 1 million. When I asked for a discount on the commission I was told that the brokerage (not my realtor but the brokerage she works for) does not allow it. Well this kind of bothered me because from what I can tell on the internet (I know, can't believe everything you read) its pretty common practice to provide a discount under these circumstances. And to add to this, it looks like now the son is going to represent my buyer in the sale of his home (reminder the son met my buyer through this transaction) and the son may also represent another buyer who had previously submitted an offer to buy my house, again having met her through this transaction. I really like my realtor but this is making me resentful. Is this how most realtors in Los Angeles would handle this?
A lot going on here....
You should have signed an exclusive right to list with the brokerage, and had a designated agent (Mother/son team). In TN, this agreement lists the TOTAL commission that you will be paying as a whole. The agent then decides how much they are going to pay/split with the buyer's agent.
The listing agreement also describes what happens in this situation as well....at least in TN it does.
Since you are paying a total, pre-determined commission no matter who brings the buyer your commission to your listing agent is the same.
In terms of them saying their brokerage doesn't allow them to discount fees in this scenario, that may very well be true. My brokerage has its own rules similar to commissions/commission splits.
What you have to understand in this case, you were going to pay that set commission from the start and if the agent found your buyer and you got a price/terms that you wanted then that's really a win/win. Having the knowledge, trust, marketing to find a buyer is worth the compensation that your agent is getting.
I was in the SAME situation 2 years ago on an apt complex I sold via a commercial broker. $1.4m. He found the buyer and took the entire commission. I felt iffy about it, same way you do, but at the same time he got it under contract in a day for $200k more than I thought I could get. Taking that into consideration, I think it was well deserved if you have the knowledge and connections to be able to put the entire deal together.
On a side note, you need to talk to your agent regarding agency and conflict of interest. If the mother/son team is your agent, then they need to represent YOU and have your best interest in mind. It sounds like they are trying to default to a facilitator. I don't know....I don't have all the info, but I would ask them how they are representing the buyer, if they are representing you. Look over your agreement, and talk to your agent/s.
I’m not answering your question but I’m just curious: Do I understand correctly that the mother AND son were your listing agents and that the son subsequently dropped you and became a buyer’s agent or became a dual agent?
If the mom and son work as a team and were representing you contractually, then it is a breach of contract to have the son become a buyers agent, unless every party has signed and agreed to this change. If you do not have a contractual relationship with both the mom and son, but an "unspoken" contract, I would say that this is still bad business, or at least bad customer service/relations. I believe that my broker would have assigned a new agent to the buyer, or all parties would have been asked if there was interest in transactional representation, which usually includes a reduced commission fee. If all parties agreed to a transactional relationship, then in essence no one would have individualized representation and the mom/son duo would have been neutral agents, assisting both buyer and seller. The only thing I can say in their favor is that a 5% commission rate is fairly low. Also, I am not in CA, and although I lived most of my life there, I have only been trained in MO. My broker believes in the power of sticking by your word and a strong handshake. It is probably a different universe than LA. Regardless, I hope things smooth out and, if nothing else, you find a new realtor for the future.
Retract the accepted offer. Can't divide or multiply by 0
Drives me nuts when realtors do this. Contractually, they don't owe you a discount, but dual agency doesn't serve you at all in this situation. The son already knows all about you and your situation and could use that against you while representing this buyer. It feels icky and I totally get it. Sorry.
@Michael Deering You sir are a savage. That is the funniest comment in the whole thread.
@Joanne Green You are completely valid feeling "icky" about this. There is conflict of interest flying around everywhere. Regardless of the agents intentions this is unprofessional. The mother, like any mother would, is going to try her best to get her sons offer accepted. That is a breach of fiduciary responsibility because at that moment she does not only have your best interest but also her sons.
Did you have multiple offers and if so, was that the best one?
There were not multiple offers. This was the second offer brought to me. The first offer also was brought to me by "my" agent who also became the seller's agent. I accepted that offer and that buyer decided to back out after the contract was signed but before she submitted the deposit. After the second offer came in & before I accepted, I asked many times to have additional showings, but that never happened. I know that sometimes that's just what happens but it added to my unease.
Really? Was it listed in the MLS? That seems strange. Unless a home is overpriced/not turnkey, most are receiving many showings and multiple offers. According to what I'm reading, there were only 2 offers (the one that fell through and the current one that's under contract), the listing agent brought both offers, and the son is now representing both buyers that had made an offer on your property?
The broker cannot be a dual agent unless both parties (buyer & seller) agree. Did you agree?