Hello,

I am trying to settle a relationship with a real-estate agent I have
employed. I am buying a property that he (my agent) did not originally
show me. I am trying to decide what to pay him. Any advice or
perspective is appreciated, particularly if you or someone you know
has had experience dealing with a similar situation and you knew the
outcome of that scenario.

More details:

Let's see, where to start...

My real-estate agent wants 1.25% of commission (half of his typical
2.5%) on a $235,000 property in Chicago, IL, USA that I plan to buy
that he did not find for me (I found it on my own). This works out to
be $2937. This is significantly more then I expected to pay per our
"gentlemen's agreement" I detail below. I had an amount of $1000 or
less in my head. I'm sure that this agent would be very unhappy with
me if I paid him $1000 or less. Unfortunately, the agent and I never
discussed any numbers or percentages or set any other quantitative
expectations when we made our "gentlemen's agreement." I'm realizing
now that this was a key mistake on my part.

All my friends and real-estate experienced people I've talked to thus
far strongly feel that I should be paying this agent little if
anything. A few of my friends said that they have found properties
outside of what their agent had shown them and not paid their agent a
dime.

I am a 2nd-time buyer; I have previously purchased and sold a property
in downtown Chicago; this property sold for $250k back in spring of
2002. (I sold it back then because I moved to Colorado...and now I'm
back in Chicago and want to own a place again.)

Even more details:

I have been in the market, since early January, to buy a property for
myself to live in somewhere in Chicago. A friend of mine happened to
be selling his condo at the same time. He offered to sell me his place
prior to listing it with his agent, at a price less then what he would
list it if I didn't buy it. The place met all my requirements, and the
price seemed somewhat reasonable, but I wasn't sure.

I decided to employ an agent to see what else was available on the
market. The agent and I orally made a "gentlemen's" agreement wherein
I would pay him (the agent) standard commission (2.5% of the sale) if
I bought a property that he introduced to me, and something
substantially less then that if I bought the original property owned
by my friend. I took my agent to visit the property being sold by my
friend to have him evaluate its worth and to show him what I liked. (I
also wrote a substantial document outlining my real-estate goals and
preferences and requirements.) Since this agent also has an
appraiser's license, I gave him the offer, if he agreed that my deal
on my friend's property was good enough, to do a formal appraisal
right there on the spot and start the process of my friend and I
cutting a deal...and I would pay this agent the same amount I would
for an appraiser's fee (even if that wouldn't be the last formal
appraisal done).

My agent advised me to look at other properties. After a significant
search that involved approximately 10-12 property visits spread over 2
different showing days, my agent and I decided that the original
property being sold by my friend was the best property available for
me and my requirements. We also agreed that the $235k asking price my
friend had was competitive and reasonable.

I have decided to not seek any help from my agent for any further work
with my purchase of my property (the original property I found myself
through my friend). I am arranging all the lawyer, inspector, etc work
to close the sale myself.

I am not comfortable paying the $2900 my agent seeks. Furthermore, it
may be difficult or impossible for me to drive this expense into my
mortgage loan, because my seller is not that interested in doing it.
This makes for a considerable out-of-pocket expense for me. All in
all, I'm fairly unhappy.

On the flip side, I am quite sensitive to honoring my agreement with
this agent. He seems good, and I was considering having a long-term
relationship with this gentlemen. I have to admit that I'm not yet
certain that I am as interested in a long-term bond with agent after
these discussions have been as uncomfortable for me as they have been
thus far.

Any advice or perspective would be greatly appreciated.
Thanks very much for any help,
-Matt
--
Remove the obvious text (including the dash) to email me.

It seems "Matt" wrote in misc.consumers:
I am trying to settle a relationship with a real-estate agent I have
employed. I am buying a property that he (my agent) did not originally
show me. I am trying to decide what to pay him. Any advice or
perspective is appreciated, particularly if you or someone you know
has had experience dealing with a similar situation and you knew the
outcome of that scenario.

What does your contract say?

--
Stan Brown, Oak Road Systems, Cortland County, New York, USA
http://OakRoadSystems.com
"An expense does not have to be required to be considered
necessary." -- IRS Form 1040 line 23 instructions

On Sun, 01 Feb 2004 02:50:43 GMT, Matt
wrote:

My real-estate agent wants 1.25% of commission (half of his typical
2.5%) on a $235,000 property in Chicago, IL, USA that I plan to buy
that he did not find for me (I found it on my own). This works out to
be $2937. This is significantly more then I expected to pay per our
"gentlemen's agreement" I detail below.

You sure don't know how to sort out relevant facts. What you did two
years ago or what friends told you or what the price was then or is now,
etc have nothing to do with your question. Get to the issues man.

What did you sign? In real estate the only pertinent conditions are those
in writing and signed by both parties. So what did you agree to do in
writing?

M Any advice or perspective would be greatly appreciated.
M Thanks very much for any help,

I don't see why you are so shy to tell the agent what you feel is fair
amount. The agreement was oral; there's nothing in writing; he feels it
should be 50% of the normal commission; you feel differently. Why not to sit
down and settle on some middle ground. His position is no better than yours,
as far as there was no written agreement.

I'm also surprised that you make that arrangement at all. In Illinois the
buyer usually does not pay the agent anything, it's the seller who does
(through his agent, sho shares the commission). When I was buying a property
one year ago, I worked with several agents, each showed me several
properties, but eventually I bought just one, and only one agent got his
commission - from the seller; not a penny from me. It's their normal way of
work, and they are prepared for the fact that not every perspective buyer
becomes a real one. I'm sure that if tomorrow I want to buy another
property, they all will be happy to work with me again. With this in mind,
the arrangement that you pay him even if you indeed buy the property he
found, looks unfair (most likely, he would get the money from the seller as
well); but the arrangement to pay him for the property he did not even find,
looks like a complete nonsense.


regards

"bat" wrote in news:cm2Tb.200170$xy6.1027463@attbi_s02:

M Any advice or perspective would be greatly appreciated.
M Thanks very much for any help,

I don't see why you are so shy to tell the agent what you feel is fair
amount. The agreement was oral; there's nothing in writing; he feels
it should be 50% of the normal commission; you feel differently. Why
not to sit down and settle on some middle ground. His position is no
better than yours, as far as there was no written agreement.

I'm also surprised that you make that arrangement at all. In Illinois
the buyer usually does not pay the agent anything, it's the seller who
does (through his agent, sho shares the commission). When I was buying
a property one year ago, I worked with several agents, each showed me
several properties, but eventually I bought just one, and only one
agent got his commission - from the seller; not a penny from me. It's
their normal way of work, and they are prepared for the fact that not
every perspective buyer becomes a real one. I'm sure that if tomorrow
I want to buy another property, they all will be happy to work with me
again. With this in mind, the arrangement that you pay him even if you
indeed buy the property he found, looks unfair (most likely, he would
get the money from the seller as well); but the arrangement to pay him
for the property he did not even find, looks like a complete nonsense.

Did the agent do anything to help you with the purchase of the house? If
not, I wouldn't think you'd owe anything. Several times in the past, I've
used multiple agents from different offices to help find a home to purchase
(I had a limited amount of time to look while relocating for work).
Different agents covered different areas, or days when another agent wasn't
available. None of them were particularly happy about the situation, but
then, the process isn't about making the RE agents happy :-)

In the end, the agent who showed me the house I bought got the commission,
and the others got nothing. That's the way the business works, and a RE
agent is never guaranteed to make a sale with any particular buyer,
regardless of how much time and effort they spend with/for the buyer.

On Sun, 01 Feb 2004 02:50:43 GMT, someone wrote:

I am trying to settle a relationship with a real-estate agent I have
employed....

IMHO you really really muddied the waters badly by "employing" this
agent in any way involving your friend's house. People do not
normally "employ" brokers in that way.

The house that the broker did not find, the broker should never have
set foot in or been asked an opinion about, or involved in offer or
appraisal of. I believe you should indeed pay something because you
did bring the broker into the transaction.

But what, indeed. I say $1500 as full satisfaction, send it on those
conditions and see if he accepts it or has the nuts to send it back.

-v.

In article ,
Matt wrote:

Hello,

I am trying to settle a relationship with a real-estate agent I have
employed. I am buying a property that he (my agent) did not originally
show me. I am trying to decide what to pay him. Any advice or
perspective is appreciated, particularly if you or someone you know
has had experience dealing with a similar situation and you knew the
outcome of that scenario.

More details:

Let's see, where to start...

My real-estate agent wants 1.25% of commission (half of his typical
2.5%) on a $235,000 property in Chicago, IL, USA that I plan to buy
that he did not find for me (I found it on my own).

Did you sign an agreement with the agent? What's the agreement say?
I suspect you have no legal obligation to pay your real estate agent one
dime if you have found a house to buy without the agent's help.

On Sat, 31 Jan 2004 22:11:27 -0500, Stan Brown
wrote:
What does your contract say?

There is no written contract. Sorry I did not make that more clear
earlier.

-Matt
--
Remove the obvious text (including the dash) to email me.

The issue you may be seeking is that there is no written agreement;
I'm sorrry I did not clarify that earlier (but it is what I meant when
I wrote that we had only an "oral, gentlemen's agreement."

I think the property's selling price does seem to be pertinent.

-Matt

On Sun, 01 Feb 2004 04:48:19 GMT, doubter
wrote:
You sure don't know how to sort out relevant facts. What you did two
years ago or what friends told you or what the price was then or is now,
etc have nothing to do with your question. Get to the issues man.

What did you sign? In real estate the only pertinent conditions are those
in writing and signed by both parties. So what did you agree to do in
writing?

--
Remove the obvious text (including the dash) to email me.

On Sun, 01 Feb 2004 08:00:08 GMT, "bat" wrote:
M Any advice or perspective would be greatly appreciated.
M Thanks very much for any help,

I don't see why you are so shy to tell the agent what you feel is fair
amount. The agreement was oral; there's nothing in writing; he feels it
should be 50% of the normal commission; you feel differently. Why not to sit
down and settle on some middle ground. His position is no better than yours,
as far as there was no written agreement.

Well put. This usenet thread is part of my work/research in advance
of a sit-down-and-settle discussion to reach an agreement. I'm trying
to gather all potential objective facts and relevant subjective
perspectives, and so far I'm quite pleased with all the responses I'm
getting. This is just the kind of stuff I sought. In the end, I'm
trying to educate myself to make an informed counter-proposal to my
agent.

I don't see why you are so shy to tell the agent what you feel is fair
amount.

Part of this is that I'm extremely sensitive when it comes to honoring
any sort of agreement. I suppose it's a morality/karma thing.
Additionally, this agent is also an agent for some friends of mine,
and I don't care to be spreading around a bad reputation; however, I
probably should realize that many of things are beyond my control,
particularly if people are not willing to evaluate the facts of the
situation.

In the end, I suspect the most-powerful approach to this negotiation
will be to empathize with my agent as well as possible. ie, sit down
and talk with him and state what it seems to be like coming from his
position. Basically, take his side and truly try to understand where
he is coming from. Argue the "devil's advocate" and use debate-club
tactics, if you will. This probably get's me at least 2 things: 1) a
better understanding of his perspective, and 2) more trust from the
agent if he truly believes I understand his perspective.

When/if I have achieved this, I suspect that he will be much more
willing to listen to my side of the story (not to say that he isn't
now--I haven't presented much, and am waiting to do so only to gather
more info...hence this thread.)

Alas, I suppose the above description applies to most any negotiation.

-Matt
--
Remove the obvious text (including the dash) to email me.

On Sun, 01 Feb 2004 09:22:06 -0500, Andrew White
wrote:

Too many details, I quit reading 1/3 of the way through.

Hence why I broke it up into a summary and successive add-on detailed
sections so folks like yourself didn't have to read it all if they
chose not to.

Here's my
take: if the agent has shown you ANY properties and if the agent is
HELPING you with this purchase, such as writing/reviewing contracts,
helping arrange inspections, providing advice, being present at
inspections, closings, etc., then this agent is entitled to a FULL
commission that is customary in your area. It makes ZERO difference
whether you found the property or not.

Ok. For what it's worth, the agent did help show me 10-12 properties,
and provided minimal advice on the property I'm buying. Other then
that, I am doing the rest of the work, including contracts,
inspection, closing, etc. This may or may not make any difference in
your analysis, but I thought I would mention it.

Do I hear correct that if the agent spent 1 minute or more of effort
related to my purchase he should receive 2.5% of the sale? If so, I'm
having trouble with that argument.


If you didn't make a different arrangement, and if he's willing to
reduce the commission in half, you're a very lucky person. But you're
obviously a very greedy and dishonest person, because you're trying to
cheat your agent out of his hard-earned money.

Ouch. That cuts pretty deep. But if I want to be fair, I must take a
hard look at this perspective nonetheless. Probably more so, if I
truly am being so decrepit and immoral, particularly if I'm deceiving
myself.

-Matt
--
Remove the obvious text (including the dash) to email me.

On Sun, 01 Feb 2004 16:44:56 GMT, (v) wrote:
IMHO you really really muddied the waters badly by "employing" this
agent in any way involving your friend's house. People do not
normally "employ" brokers in that way.
The house that the broker did not find, the broker should never have
set foot in or been asked an opinion about, or involved in offer or
appraisal of. I believe you should indeed pay something because you
did bring the broker into the transaction.

Wow, these seem to be great points.

IMHO you really really muddied the waters badly by "employing" this
agent in any way involving your friend's house.

Yes, I think I'm coming to this conclusion. I believe I made a big
mistake on this one. I guess I would have hoped that an experienced
agent would also be aware enough to help me/us avoid such a mistake,
too. I chalk one up for learning the hard way. Doubly so because
there was no written agreement.

But what, indeed. I say $1500 as full satisfaction, send it on those
conditions and see if he accepts it or has the nuts to send it back.

Ok. I've been working on numbers in my head ranging from $500-$1500.
It's interesting that you also came up with $1500. If you can share
how you came up with this number, I'd be very appreciative...but alas,
you all aren't getting paid by me to do this analysis, either.

Something to note he Part of my "intent" (for whatever that's
worth) was to allow this agent to evaluate the initial property (the
one I'm planning to buy) so that he might apply his knowledge and
experience to help me decide on the spot of it's a good enough
situation to do the deal on the spot. I'm partly disappointed that he
decided to direct me to look at other places only to come to come to
the conclusion, along with me, that the original place was indeed the
best for me. We could have saved each other a lot of time. But alas,
it might have been a hard decision to make for either of us without
better knowledge of the market. Furthermore, I guess I can't blame
the agent for seeking other properties for me in order to get more
money in is pocket by getting a full commission if he were to find me
a place that I bought through him. It's the way he gets rewarded, so
I can't argue with that.

-Matt
--
Remove the obvious text (including the dash) to email me.

On Sun, 01 Feb 2004 02:50:43 GMT,
I wrote:
I am trying to settle a relationship with a real-estate agent I have
employed....

Here is an excerpt from an email that my agent sent me on Jan 27,
2004. I do this for fairness purposes and I hope that I am not
violating any privacy issues:

[START QUOTE]
When you first contacted me, I told you that I could come out and see
the unit and appraise it for $300. I aslo said that I could negotiate
a contract for you at that time for $1000. Since then i have helped
you learn the market values of smilar units in the area and what is
needed to best position yourself for resale purposes. I have set up
the MLS search for you, set up appointments, accompanied you on
showings, and offered you my professional advice. Helping you through
the contract and getting you a highly qualified inspector, attorney
and any trades men in the future is also included. If you feel that
that doen't justify 1/2 of what I typically earn for this service, I
would like to know what you do feel it is worth.
[END QUOTE]

Note that I have declined all offers for him to help me with contract
negotiations, inspector acquisition, attorney acquisition, and trades
men acquisitoin. A formal appraisal also was not done for the initial
property (the one I plan to buy).

This stuff he has done is summarized by:

[START QUOTE]
I have set up the MLS search for you, set up appointments,
accompanied you on showings, and offered you my professional advice.
[END QUOTE]

....which is an excerpt from the above quote.

-Matt
--
Remove the obvious text (including the dash) to email me.

It seems "Matt" wrote in misc.consumers:
On Sat, 31 Jan 2004 22:11:27 -0500, Stan Brown
wrote:
What does your contract say?

There is no written contract. Sorry I did not make that more clear
earlier.

Then you need to consult a local lawyer. The real estate agent is
claiming thousands of dollars in commissions, right? A letter from a
lawyer should put an end to that relatively cheaply, or if in fact
you do owe money your lawyer will tell you how much and provide a
release form for the agent to sign.

--
Stan Brown, Oak Road Systems, Cortland County, New York, USA
http://OakRoadSystems.com
"An expense does not have to be required to be considered
necessary." -- IRS Form 1040 line 23 instructions

"Matt" wrote in message
...
Hello,

snip

You don't pay the agent anything. All commissions come from the seller.
Since you did not sign an agreement for the agent to represent you, I doubt
if the selling agent will give your agent anything. In any case, it's up to
the sellers agent to work things out with your agent. You don't pay anything
out of your pocket.

Now if your agent sent you listings on a regular basis, and one of those
listings was the property that you are buying, then your agent's broker is
entitled to 1/2 of the commission (or whatever the seller's contract
specified as the commission).

Agents love to sign you up for e-mail notification of new listings, since
this lets them claim that they provided you with the information on the
property.

On Sun, 01 Feb 2004 02:50:43 GMT, Matt wrote:

Hello,

I am trying to settle a relationship with a real-estate agent I have
employed. I am buying a property that he (my agent) did not originally
show me. I am trying to decide what to pay him. Any advice or
perspective is appreciated, particularly if you or someone you know
has had experience dealing with a similar situation and you knew the
outcome of that scenario.

More details:

Let's see, where to start...

My real-estate agent wants 1.25% of commission (half of his typical
2.5%) on a $235,000 property in Chicago, IL, USA that I plan to buy
that he did not find for me (I found it on my own). This works out to
be $2937. This is significantly more then I expected to pay per our
"gentlemen's agreement" I detail below. I had an amount of $1000 or
less in my head. I'm sure that this agent would be very unhappy with
me if I paid him $1000 or less. Unfortunately, the agent and I never
discussed any numbers or percentages or set any other quantitative
expectations when we made our "gentlemen's agreement." I'm realizing
now that this was a key mistake on my part.

All my friends and real-estate experienced people I've talked to thus
far strongly feel that I should be paying this agent little if
anything. A few of my friends said that they have found properties
outside of what their agent had shown them and not paid their agent a
dime.

I am a 2nd-time buyer; I have previously purchased and sold a property
in downtown Chicago; this property sold for $250k back in spring of
2002. (I sold it back then because I moved to Colorado...and now I'm
back in Chicago and want to own a place again.)

Even more details:

I have been in the market, since early January, to buy a property for
myself to live in somewhere in Chicago. A friend of mine happened to
be selling his condo at the same time. He offered to sell me his place
prior to listing it with his agent, at a price less then what he would
list it if I didn't buy it. The place met all my requirements, and the
price seemed somewhat reasonable, but I wasn't sure.

I decided to employ an agent to see what else was available on the
market. The agent and I orally made a "gentlemen's" agreement wherein
I would pay him (the agent) standard commission (2.5% of the sale) if
I bought a property that he introduced to me, and something
substantially less then that if I bought the original property owned
by my friend. I took my agent to visit the property being sold by my
friend to have him evaluate its worth and to show him what I liked. (I
also wrote a substantial document outlining my real-estate goals and
preferences and requirements.) Since this agent also has an
appraiser's license, I gave him the offer, if he agreed that my deal
on my friend's property was good enough, to do a formal appraisal
right there on the spot and start the process of my friend and I
cutting a deal...and I would pay this agent the same amount I would
for an appraiser's fee (even if that wouldn't be the last formal
appraisal done).

My agent advised me to look at other properties. After a significant
search that involved approximately 10-12 property visits spread over 2
different showing days, my agent and I decided that the original
property being sold by my friend was the best property available for
me and my requirements. We also agreed that the $235k asking price my
friend had was competitive and reasonable.

I have decided to not seek any help from my agent for any further work
with my purchase of my property (the original property I found myself
through my friend). I am arranging all the lawyer, inspector, etc work
to close the sale myself.

I am not comfortable paying the $2900 my agent seeks. Furthermore, it
may be difficult or impossible for me to drive this expense into my
mortgage loan, because my seller is not that interested in doing it.
This makes for a considerable out-of-pocket expense for me. All in
all, I'm fairly unhappy.

On the flip side, I am quite sensitive to honoring my agreement with
this agent. He seems good, and I was considering having a long-term
relationship with this gentlemen. I have to admit that I'm not yet
certain that I am as interested in a long-term bond with agent after
these discussions have been as uncomfortable for me as they have been
thus far.

Any advice or perspective would be greatly appreciated.
Thanks very much for any help,
-Matt


Unless it's in writing, I don't think you have to pay him anything tho
you both agree he should be paid. In my mind, his suggestion of half
his normal commission (regardless what the dollar amount turns out to
be) is reasonable. But since I don't think he can prove his case with
evidence in a court of law, I think your wishes will prevail.

Also, I somehow I think you are being too diplomatic. My gut instinct
is that this fellow isn't going to want to sit down with you to
re-negotiate his fee. He already tried to explain his fee in writing.
He may feel that sitting down with you is wasting more of his time???

My real-estate agent wants 1.25% of commission (half of his typical
2.5%) on a $235,000 property in Chicago, IL, USA that I plan to buy
that he did not find for me (I found it on my own). This works out to
be $2937. This is significantly more then I expected to pay per our
"gentlemen's agreement" I detail below. I had an amount of $1000 or
less in my head. I'm sure that this agent would be very unhappy with
me if I paid him $1000 or less. Unfortunately, the agent and I never
discussed any numbers or percentages or set any other quantitative
expectations when we made our "gentlemen's agreement." I'm realizing
now that this was a key mistake on my part.

Yes indeed. My understanding is that in general, contracts related to real
estate must be in writing or they have no force. However, you'd have to
check with a lawyer to know for sure.

I decided to employ an agent to see what else was available on the
market. The agent and I orally made a "gentlemen's" agreement wherein
I would pay him (the agent) standard commission (2.5% of the sale) if
I bought a property that he introduced to me, and something
substantially less then that if I bought the original property owned
by my friend

But you didn't agree on an amount, and don't have anything in writing to
back up your claim. Right?

I took my agent to visit the property being sold by my
friend to have him evaluate its worth and to show him what I liked. (I
also wrote a substantial document outlining my real-estate goals and
preferences and requirements.) Since this agent also has an
appraiser's license, I gave him the offer, if he agreed that my deal
on my friend's property was good enough, to do a formal appraisal
right there on the spot and start the process of my friend and I
cutting a deal...and I would pay this agent the same amount I would
for an appraiser's fee (even if that wouldn't be the last formal
appraisal done).

What would be the normal appraiser's fee?

My agent advised me to look at other properties. After a significant
search that involved approximately 10-12 property visits spread over 2
different showing days, my agent and I decided that the original
property being sold by my friend was the best property available for
me and my requirements. We also agreed that the $235k asking price my
friend had was competitive and reasonable.

I have decided to not seek any help from my agent for any further work
with my purchase of my property (the original property I found myself
through my friend). I am arranging all the lawyer, inspector, etc work
to close the sale myself.

I am not comfortable paying the $2900 my agent seeks. Furthermore, it
may be difficult or impossible for me to drive this expense into my
mortgage loan, because my seller is not that interested in doing it.
This makes for a considerable out-of-pocket expense for me. All in
all, I'm fairly unhappy.

Putting that expense into the mortgage loan would have exactly the same
effect as reducing your down payment by a corresponding amount.

On the flip side, I am quite sensitive to honoring my agreement with
this agent. He seems good, and I was considering having a long-term
relationship with this gentlemen. I have to admit that I'm not yet
certain that I am as interested in a long-term bond with agent after
these discussions have been as uncomfortable for me as they have been
thus far.

But apparently you and he do not agree on what the agreement is, even if we
ignore the lack of a written agreement.

Here's my take on the situation:

1) You have no written agreement, so you don't owe the agent anything.
That is, if you decide to give him nothing, he has no legal recourse.

2) On the other hand, you want to do the right thing, whatever that
might be.

3) On the other other hand, you and the agent don't agree on what the
right thing is. Moreover, you haven't told us what you think the right
thing is, or why; you've just told us that the agent thinks the right thing
is to ignore the part of the agreement that says that you will pay
substantially less if you buy your friend's property?

So what do you think is right, and why? In particular, does the agent agree
with you that your deal was for you to pay substantially less if you bought
your friend's property?

Matt wrote in message . ..

I decided to employ an agent to see what else was available on the
market. The agent and I orally made a "gentlemen's" agreement wherein
I would pay him (the agent) standard commission (2.5% of the sale) if
I bought a property that he introduced to me, and something
substantially less then that if I bought the original property owned
by my friend. I took my agent to visit the property being sold by my
friend to have him evaluate its worth and to show him what I liked. (I
also wrote a substantial document outlining my real-estate goals and
preferences and requirements.) Since this agent also has an
appraiser's license, I gave him the offer, if he agreed that my deal
on my friend's property was good enough, to do a formal appraisal
right there on the spot and start the process of my friend and I
cutting a deal...and I would pay this agent the same amount I would
for an appraiser's fee (even if that wouldn't be the last formal
appraisal done).

My agent advised me to look at other properties. After a significant
search that involved approximately 10-12 property visits spread over 2
different showing days, my agent and I decided that the original
property being sold by my friend was the best property available for
me and my requirements. We also agreed that the $235k asking price my
friend had was competitive and reasonable.

I have decided to not seek any help from my agent for any further work
with my purchase of my property (the original property I found myself
through my friend). I am arranging all the lawyer, inspector, etc work
to close the sale myself.

I am not comfortable paying the $2900 my agent seeks. Furthermore, it
may be difficult or impossible for me to drive this expense into my
mortgage loan, because my seller is not that interested in doing it.
This makes for a considerable out-of-pocket expense for me. All in
all, I'm fairly unhappy.

On the flip side, I am quite sensitive to honoring my agreement with
this agent. He seems good, and I was considering having a long-term
relationship with this gentlemen. I have to admit that I'm not yet
certain that I am as interested in a long-term bond with agent after
these discussions have been as uncomfortable for me as they have been
thus far.

Any advice or perspective would be greatly appreciated.
Thanks very much for any help,
-Matt

I can't comment on what the law would say, but I feel bad for your RE
agent.

Who's to say you would have purchased your friends' house if the agent
had not taken you around to see several competitive houses? Sounds to
me like you were uncertain enough that, without the agent's
involvement -- on whatever level -- you may never have purchased it.
Sounds to me like you needed time and a professional's opinion to help
you reach that decision, no? Even if all that you needed was a
*sounding board* to listen to you work out the decision in your own
mind. If nothing else, bringing in the agent showed your friend you
were seriously contemplating the purchase, and gave him reason to hold
off listing it through a broker. If he had done this, then you
would've been out of luck or had to meet a higher listing price.
Right?

Since it's an FSBO, the agent essentially benefited both you *and*
your friend, IMHO, and frankly I think he deserves at least 2.5%. Of
course without a written agreement, he has no legal grounds.

If it were me, I'd go to the seller and suggest that you split the
2.5% and pay him together. Then to get my full money's worth, I'd go
ahead and use the agent to finish the deal... one agent to represent
both seller and buyer.

jen

"Matt" wrote in message
...

[START QUOTE]
I have set up the MLS search for you, set up appointments,
accompanied you on showings, and offered you my professional advice.
[END QUOTE]

Since you are trying to do the fair thing (for which I commend you) one
relevant fact might be how much time the agent has spent and what, if
any, out of pocket expenses he has incurred. You should be able to
estimate how much time he spent showing you properties which doubtless
will be the bulk of his time spent.

One approach to coming to a fair amount might then be to multiply his
hours spent by some reasonable hourly fee, add on any out of pocket
expenses, and round up to the nearest $100.

Rich

On Sun, 01 Feb 2004 09:25:05 -0500, Andrew White wrote:

"bat" wrote:

I'm also surprised that you make that arrangement at all. In Illinois the
buyer usually does not pay the agent anything, it's the seller who does
(through his agent, sho shares the commission).

You misunderstand him. He feels he's entitled to getting the buyer's
agent's comission himself. When I find a property and do ALL of the
buying work myself, I can ask one of my friends who has a real estate
license to "serve" as my agent. All they do in this case is collect
the agent's comission and pass it entirely on to me. I then take them
to a very nice dinner.


You should do better than that considering he has to report it as
income on HIS tax return.

It's not clear what you are actually looking for.

If this agent is looking to appear as your selling agent, and to receive his
usual commission and then keep 50% and pass the rest to you; and that's what
you indeed negotiated with him when you contacted him, only without the
numbers; then, I would say, what he says makes sense, and from the ethical
standpoint, you indeed have to sit down and negotiate with him.

But if he is expecting something out of your pocket, not being your buyer's
agent, then I wouldn't pay him a dime. He did the usual RE agent's job; what
you finally chose was not from him; tough luck, but nothing unusual for a RE
agent. Even the fact that you indeed worked with him, does not mean much:
during that very work, you easily might get disappointed in him. If there
were no obligations, then there are no obligations. If he is trying to
pretend that he did what he did not, and that you are obligated to pay for
it, feel free to send a letter of complaint to the entity where he gets his
license -http://www.obre.state.il.us/CONSUMER/FORMS/cnrffrm.htm, plus any RE
associations he is a member of, like realtor.org and http://www.nsbar.org/nsbar-elinear/public.htm.
I don't think their interest in maintaining the ethics of their members goes
far beyond the attempts to sell courses and brochures about the ethics to
those members (though I may be wrong), but at least the agent will have to
write some lies in response, and be somewhat scared - which is important to
you regarding the rumors you are afraid of.


regards

Matt wrote:
[snip]
My real-estate agent wants 1.25% of commission (half of his typical
2.5%) on a $235,000 property in Chicago, IL, USA that I plan to buy
that he did not find for me (I found it on my own). This works out to
be $2937. This is significantly more then I expected to pay per our
"gentlemen's agreement" I detail below. I had an amount of $1000 or
less in my head. I'm sure that this agent would be very unhappy with
me if I paid him $1000 or less.
[snip]
I decided to employ an agent to see what else was available on the
market. The agent and I orally made a "gentlemen's" agreement wherein
I would pay him (the agent) standard commission (2.5% of the sale) if
I bought a property that he introduced to me, and something
substantially less then that if I bought the original property owned
by my friend.
[snip]
My agent advised me to look at other properties. After a significant
search that involved approximately 10-12 property visits spread over 2
different showing days, my agent and I decided that the original
property being sold by my friend was the best property available for
me and my requirements. We also agreed that the $235k asking price my
friend had was competitive and reasonable.

I have decided to not seek any help from my agent for any further work
with my purchase of my property (the original property I found myself
through my friend). I am arranging all the lawyer, inspector, etc work
to close the sale myself.
[snip]

The problem is that "substantially less" is indefinite. I would guess
you have an "agreement to agree in the future", which legally isn't a
contract at all. I think the agent is tryhing to take advantage of
you, but the agent did provide some services for which you should
morally pay.

Let's get down to basics. If you had bought one of the other
properties the agent showed you, he would have gotten half of the
commission, probably 3%. He would have also helped you with all the
paperwork, making the written offer to buy, letters of instruction to
the escrow company, etc. But you didn't buy any of the properties he
showed you, and you didn't make use of those "closing" services.
Technically you bought a FSBO (for sale by owner), and there was
no commission to split.

Now that's just the luck of the draw. When an agent shows a buyer
araound, there is no guarantee that the buyer will buy one of the
properties the agent shows. In fact, the buyer may decide not to buy
anything at all. In that case, the agent gets nothing for his time
and trouble. But that's a risk that all real estate agents take every
time they show a property. It's just part of the real estate
business, and unless you have an agreement to the property you would
owe him nothing.

But you do have an agreement to pay him "something", "substantially
less" than his half of the commission. If he wanted half of his usual
commission, he should have said so at the outset when you made your
"gentleman's agreement". As it is, he can either take whatever you
offer, or try to get a court to award him a higher payment.

And he did provide you with a valuable service (other than showing you
properties you didn't buy). He did a full appraisal on the property
you ended up buying. A real appraisal is more work than just the
typical real estate agent's "list of comparable sales", and there is
some potential liability if he gets it wrong.

As I understand it, the usual going rate for an appraisal these days
is around $400-$500. At least, that's what lenders are asking
for(*). So I think your $1000 offer is generous.

If it were me I would probably offer him $1000 and see if he takes
it(+). If he threatens to go to court over it, you'll have to decide
how much the risk (of losing in court) is worth to you vs. the $1937
difference between what he's asking and what you think his services
are worth. Then you can decide whether to sweeten your offer or not.

If he's completely adamant, you could go see a real-estate lawyer for
further advice, but that will probably cost you $200-$300 so it's
better if you can settle without getting lawyers involved.

(*) This is often inflated. Many lenders will do a "computer
appraisal" costing around $50 and then charge the borrower for a full
in-person appraisal. But that's not relevant to this case where OP
did, in fact, receive a full appraisal.

(+) And point out that the usual fee for an appraisal is $500 or less,
and the other services he provided are part of the normal risks of
doing business as a real-estate agent.
--
I pledge allegiance to the Constitution of the United States of America, and
to the republic which it established, one nation from many peoples, promising
liberty and justice for all.

Andrew White wrote:
Too many details, I quit reading 1/3 of the way through. Here's my
take: if the agent has shown you ANY properties and if the agent is
HELPING you with this purchase, such as writing/reviewing contracts,
helping arrange inspections, providing advice, being present at
inspections, closings, etc., then this agent is entitled to a FULL
commission that is customary in your area. It makes ZERO difference
whether you found the property or not.

If you didn't make a different arrangement, and if he's willing to
reduce the commission in half, you're a very lucky person. But you're
obviously a very greedy and dishonest person, because you're trying to
cheat your agent out of his hard-earned money.

Too bad you didn't read the rest of the details. Sometimes it's the
details that make the difference. If you had read further you would
have discovered that OP _didn't_ use the agent's services for writing
contracts, inspections, etc. Now it's possible that he would be
better off if he _did_ use them, but he's not legally or morally
obliged to use them.

And an agent who helps a buyer find a property is usually compensated
by the _seller_. If the seller isn't willing to pay at least part of
the normal commission, the agent is out of luck unless he has a
contract with the buyer. That's why most agents won't show "FSBO"
properties unless the add contains wording like "broker cooperation"
(which means the seller will pay the buyer's agent's half of the
usual commission in the area).

I think OP's plan to offer the agent $1000 is fair, perhaps even a
little generous.
--
I pledge allegiance to the Constitution of the United States of America, and
to the republic which it established, one nation from many peoples, promising
liberty and justice for all.

Matt wrote:
[much snipped]
[START QUOTE]
I have set up the MLS search for you, set up appointments,
accompanied you on showings, and offered you my professional advice.
[END QUOTE]

All of which is worth exactly $0 if you didn't buy any of the
properties he sold you. The only service he provided that is
worth something is the appraisal on the original, FSBO property.
And if all he did was provide the usual "comparative analysis", that
too is worth $0. Agents give that service for free as a means of
attracting business.

I'll repeat. I think your $1000 figure is more than fair.
--
I pledge allegiance to the Constitution of the United States of America, and
to the republic which it established, one nation from many peoples, promising
liberty and justice for all.

Hello,

I am trying to settle a relationship with a real-estate agent I have
employed. I am buying a property that he (my agent) did not originally
show me. I am trying to decide what to pay him. Any advice or
perspective is appreciated, particularly if you or someone you know
has had experience dealing with a similar situation and you knew the
outcome of that scenario.

There are some articles that might help at:
http://www.real-estate-supply.com/re...e-articles.htm

Jo Ellen

You hired a Buyers agent.
He was representing you and not the seller.

If the agent did any work to help with the sale, he is entitled to the commision you agreed to.
If he did no work than he is not entitled to a commission.

PJ

So your realtor did show you 10-12 properties? That's quite a few and I
would think he deserves to be compensated. He is already cutting you a deal
by offering you half the usual rate (which I might add is 1/2 point less
then then usual rate in nevada). I don't know how Illinois works but in
Nevada the realtor typically splits the comissions 50/50 with a broker they
work under, making their profit considerably less.

On top of that, there are plenty of fees and costs involved with being a
realtor such as MLS membership. If you decided you wanted to buy a home on
your own then you should have done that before working with this person.
Even if you didn't use all of his services they were available and provided
a good safety net if you did need it. Do you think you should get a refund
of your auto insurance premiums if you never use them?

The fact that he is already trying to give you a break and you're still
contesting it I find a little rediculous.

-Jeff

"Matt" wrote in message
...
Hello,

I am trying to settle a relationship with a real-estate agent I have
employed. I am buying a property that he (my agent) did not originally
show me. I am trying to decide what to pay him. Any advice or
perspective is appreciated, particularly if you or someone you know
has had experience dealing with a similar situation and you knew the
outcome of that scenario.

More details:

Let's see, where to start...

My real-estate agent wants 1.25% of commission (half of his typical
2.5%) on a $235,000 property in Chicago, IL, USA that I plan to buy
that he did not find for me (I found it on my own). This works out to
be $2937. This is significantly more then I expected to pay per our
"gentlemen's agreement" I detail below. I had an amount of $1000 or
less in my head. I'm sure that this agent would be very unhappy with
me if I paid him $1000 or less. Unfortunately, the agent and I never
discussed any numbers or percentages or set any other quantitative
expectations when we made our "gentlemen's agreement." I'm realizing
now that this was a key mistake on my part.

All my friends and real-estate experienced people I've talked to thus
far strongly feel that I should be paying this agent little if
anything. A few of my friends said that they have found properties
outside of what their agent had shown them and not paid their agent a
dime.

I am a 2nd-time buyer; I have previously purchased and sold a property
in downtown Chicago; this property sold for $250k back in spring of
2002. (I sold it back then because I moved to Colorado...and now I'm
back in Chicago and want to own a place again.)

Even more details:

I have been in the market, since early January, to buy a property for
myself to live in somewhere in Chicago. A friend of mine happened to
be selling his condo at the same time. He offered to sell me his place
prior to listing it with his agent, at a price less then what he would
list it if I didn't buy it. The place met all my requirements, and the
price seemed somewhat reasonable, but I wasn't sure.

I decided to employ an agent to see what else was available on the
market. The agent and I orally made a "gentlemen's" agreement wherein
I would pay him (the agent) standard commission (2.5% of the sale) if
I bought a property that he introduced to me, and something
substantially less then that if I bought the original property owned
by my friend. I took my agent to visit the property being sold by my
friend to have him evaluate its worth and to show him what I liked. (I
also wrote a substantial document outlining my real-estate goals and
preferences and requirements.) Since this agent also has an
appraiser's license, I gave him the offer, if he agreed that my deal
on my friend's property was good enough, to do a formal appraisal
right there on the spot and start the process of my friend and I
cutting a deal...and I would pay this agent the same amount I would
for an appraiser's fee (even if that wouldn't be the last formal
appraisal done).

My agent advised me to look at other properties. After a significant
search that involved approximately 10-12 property visits spread over 2
different showing days, my agent and I decided that the original
property being sold by my friend was the best property available for
me and my requirements. We also agreed that the $235k asking price my
friend had was competitive and reasonable.

I have decided to not seek any help from my agent for any further work
with my purchase of my property (the original property I found myself
through my friend). I am arranging all the lawyer, inspector, etc work
to close the sale myself.

I am not comfortable paying the $2900 my agent seeks. Furthermore, it
may be difficult or impossible for me to drive this expense into my
mortgage loan, because my seller is not that interested in doing it.
This makes for a considerable out-of-pocket expense for me. All in
all, I'm fairly unhappy.

On the flip side, I am quite sensitive to honoring my agreement with
this agent. He seems good, and I was considering having a long-term
relationship with this gentlemen. I have to admit that I'm not yet
certain that I am as interested in a long-term bond with agent after
these discussions have been as uncomfortable for me as they have been
thus far.

Any advice or perspective would be greatly appreciated.
Thanks very much for any help,
-Matt
--
Remove the obvious text (including the dash) to email me.

"Jeff Smith" wrote


So your realtor did show you 10-12 properties? That's quite a few and I
would think he deserves to be compensated. He is already cutting you a deal


Oh Please!!!!!!!!! The agent failed to find the buyer an acceptable
property. You agents swear that the seller pays all commisions, you
can't have it both ways!

Give the agent $300 as an act of pure charity and if he isn't happy as
punch take the $300 check and rip it up, the agent is entitled to
nothing, zilch, sero.

Paying welfare checks to agent only keeps them hanging around stinking
up the neighborhood ... everyone in the free world hates brokers,
please just make them ago away!