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Buyer’s Broker

Home Mortgages and Home Buying Buyer’s Broker

  • Lordosis Lordosis 
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    Status: Physician
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    I never thought I would hear so much crying about the difficulties of realtors.

    “Never let your sense of morals prevent you from doing what is right.”

    #219899 Reply
    Liked by octopus85
    Avatar CREGuy 
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    Joined: 01/16/2018

    Lol @creguy

    ” I think some nominal offer of compensation for services rendered so far would be a fair gesture.”

    Do you flip the car salesman a $100 after you take a test drive but buy something else, too.

    Click to expand…

    Not at all the same situation.

     

    If the agent had simply emailed a couple of listings to the OP, that would be one thing.  OP engaging the agent to take them on a tour of multiple properties, and arranging for them to get OP’s parents through another house they were interested in is a bit more involved than that.  Ultimately OP happened to stumble into a situation where the house that they wanted to proceed with was through a friend of a friend.  Per the OP, this resulted in a significantly reduced price on the purchase.  Again, I’m not advocating that they pay them 3% of the purchase price out of their pocket, but hell even a small amount of compensation or even a gift card to a nice restaurant wouldn’t be outrageous.  OP clearly engaged their services even if they didn’t ultimately consummate the deal.  Perhaps I’m an outlier in this little forum where I have an appreciation for the value of others’ time and I don’t think it’s crazy to offer up nominal compensation for using a pretty significant amount of someone’s time (who OP obviously saw value in doing or they wouldn’t have engaged them).  Is there some sort of legal obligation?  Of course not.  Is it something OP has to do?  Nope.  Just offering a differing opinion, and I’m not surprised others here don’t agree… To each their own…

    Click to expand…

     

    I disagree here.  If the realtors want to put a value on their time, they certainly can, by introducing an hourly rate fee structure or a flat fee structure that includes a certain basket of services.  They don’t.  They hold on to the commission model.  One argument they make for commissions being so high is that sometimes their work results in no payment at all, such as in the OPs case.

    When I bought my house, I used a buyers agent.  I was an easy client by any definition.  I did a lot of the leg work, saw only a few houses and had an easy controversy free transaction.  If I calculate commission/hours spent with me, my realtor was earning well over $1000/hour, and I did not buy a very expensive house.  If someone else used her time and then didn’t buy, well, my commission more than made up for it.

    We are currently looking for a house, without a buyers agent.  My wife is a real estate attorney who also has an active real estate license.  Although she works on commercial projects for national firms, not residential, we are more than capable of handling a house purchase.  Every time we have looked at a house with a sellers agent there, even knowing my wife’s background, they still give us the pitch to become our buyers agent.  The pitch is the same, every time, from every realtor.  “My services are free.  In this state, the seller pays all the commissions.  It costs you nothing to use me.  Why wouldn’t you hire a buyers agent?”

    Realtors can’t market their services as free, protect a fee structure that results in outsized commissions compared to the time spent, and still expect something when their services are used in a way that does not result in a commission.

    The buyers agent gets nothing.  That is the cost of doing business.  I often get paid nothing for my work with uninsured ER patients.  I don’t expect non-paying ER patients to give me a gift card.  Part of choosing to work as a doctor means that I do fine at the end of the year, even if compensation for individual encounters is widely disparate.  Same rule applies to realtors.

     

     

    Click to expand…

    That’s fine.  OP doesn’t really mention how they chose/met the buyer’s agent, so I won’t speculate on that matter. Personally I believe that if I engage someone’s services, and let’s be clear, OP engaged the services of the buyer’s agent, I believe I should be prepared to compensate them for their time if I decide to go another route after the fact, even if I’m not legally obligated to do so.  If you don’t think it’s necessary that’s fine too, but those responding who are acting as if the buyer’s agent hasn’t done anything because the didn’t find the exact house that the OP eventually found right before it went to market through a friend, are wrong.  Buying a house is a process and that process starts well before you select a house and start negotiations.

    As you stated, if you’re willing to do the leg work yourself and are capable of finding a house and completing the transaction on your own, then go for it.  Absolutely nothing wrong with that.  Engaging someone to work on your behalf to do just that is a completely different set of circumstances.

    The car salesman analogy is woefully off base.  A car salesman is contracted (hired) by a third party (the dealer) to sell vehicles to potential buyers.  By walking into a dealership and taking a test drive then deciding not to buy the car, you’re not obligated to anything.  That’s part of the job that he or she was hired to do by the dealer.  If OP had searched for the homes, contacted the listing agents directly, and then decided not to buy that house, and then asking if they have an obligation to that listing agent, it would be an apt comparison.  That is not the case.  There is no arguing whether or not OP engaged the services of a buyer’s agent, nor whether said agent spent a significant amount of time working on finding a home for the OP.  There is obviously no legal requirement for compensation as the OP didn’t sign any agreement that would be binding, so all that’s left to debate is whether there is a moral/ethical obligation to compensate someone if you engaged their services even if the circumstances change and you no longer need their services moving forward.  If OP doesn’t feel they have any obligation to compensate in that matter, then that’s fine (and I wouldn’t disparage them) but personally I would do something to compensate them for their time and efforts to this point.  I would speculate that the OP may feel the same way given the fact that they are here asking the question.

    #219904 Reply
    Avatar CREGuy 
    Participant
    Status: Other Professional, Spouse
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    Joined: 01/16/2018

    I never thought I would hear so much crying about the difficulties of realtors.

    Click to expand…

    It’s certainly not crying about the difficulties of anyone.  I probably dislike residential realtors more than anyone on this board.  However, I personally feel that if I engage the services of someone (ANYONE even a realtor), then I should be prepared to compensate them for their time.  Whether I have a legal obligation, or whether someone else feels differently, is irrelevant to me.  In this case the agent obviously isn’t needed going forward and isn’t doing the entire scope of work, so I wouldn’t feel obligated to compensate them 3% of the purchase price (or close to it) but I would certainly do something for them.  To each their own, I just don’t see this as a “legally you don’t have to use them or pay them so you should just save your money” type of question.

    #219907 Reply
    Liked by DCdoc
    Avatar RollieStrummer 
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    Status: Physician
    Posts: 17
    Joined: 11/07/2018
    Earnest refinancing bonus

    I never thought I would hear so much crying about the difficulties of realtors.

    Click to expand…

    It’s certainly not crying about the difficulties of anyone.  I probably dislike residential realtors more than anyone on this board.  However, I personally feel that if I engage the services of someone (ANYONE even a realtor), then I should be prepared to compensate them for their time.  Whether I have a legal obligation, or whether someone else feels differently, is irrelevant to me.  In this case the agent obviously isn’t needed going forward and isn’t doing the entire scope of work, so I wouldn’t feel obligated to compensate them 3% of the purchase price (or close to it) but I would certainly do something for them.  To each their own, I just don’t see this as a “legally you don’t have to use them or pay them so you should just save your money” type of question.

    Click to expand…

    Ha.  I may dispute that.

    I might feel differently in another situation, but with realtors, they have set up the rules of the game, and they vigorously protect their commission fee structure with one of the biggest lobbies in DC.  If someone operates within the contract that the realtor themselves sets up and promotes, I don’t feel any further moral obligation if the encounter does not result in a commission.  I totally respect that you feel differently.

    #219921 Reply
    Avatar ZZZ 
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    Status: Spouse
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    “The car salesman analogy is woefully off base. A car salesman is contracted (hired) by a third party (the dealer) to sell vehicles to potential buyers. ”

    A realtor works for a 3rd party

    #219945 Reply
    Liked by octopus85
    Avatar CREGuy 
    Participant
    Status: Other Professional, Spouse
    Posts: 67
    Joined: 01/16/2018

    “The car salesman analogy is woefully off base. A car salesman is contracted (hired) by a third party (the dealer) to sell vehicles to potential buyers. ”

    A realtor works for a 3rd party

    Click to expand…

    Not a buyer’s agent which is what this thread is about.  As I mentioned earlier, if the OP had simply contacted a listing agent directly (the person who has been hired by the seller to sell their house), then decided to not buy THAT house, your analogy would fit.  The OP engaged the services of an agent to help find a house to buy and assist with the buying process.

    #219952 Reply
    Avatar octopus85 
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    Status: Resident
    Posts: 222
    Joined: 08/13/2017

     

    Click to expand…

    Not a buyer’s agent which is what this thread is about.  As I mentioned earlier, if the OP had simply contacted a listing agent directly (the person who has been hired by the seller to sell their house), then decided to not buy THAT house, your analogy would fit.  The OP engaged the services of an agent to help find a house to buy and assist with the buying process.

    Click to expand…

    Dude (?), you have some weird perspectives…

    Yes, the OP engaged the services of an agent to help find a house to buy and assist with the buying process – by the OPs account, the agent did neither of those things for the house he ended up finding.

    Also, the buyer’s agent is almost certainly not a one-man-shop. He/she works for an agency.

     

    Car salesman:

    -gets paid by dealer for selling cars

    -doesn’t get paid if you spend a month test driving 30 different cars and calling with questions every day and eventually buy someplace else

     

    Real estate agent:

    -gets paid by the agency for transacting house sales

    -doesn’t get paid if you spend a month looking at 30 different houses and find something on your own to buy (assuming you didn’t sign an agreement otherwise)

     

    It’s the same thing.

    #219976 Reply
    Liked by ZZZ
    Avatar octopus85 
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      If OP doesn’t feel they have any obligation to compensate in that matter, then that’s fine (and I wouldn’t disparage them) but personally I would do something to compensate them for their time and efforts to this point.

    Click to expand…

    I would also add that is seems very paternalistic that you feel the need to question the agent’s compensation model. Agent and buyer willingly agreed that agent gets paid a large sum of money in a certain circumstance. That circumstance didn’t happen. Agent knew that was a likely outcome, but agreed to the deal anyways. What’s the problem, here? It’s almost insulting to presume you need to “make right” a situation that the agent agreed to and is an integral element of the business model.

    #219977 Reply
    Liked by ZZZ
    ENT Doc ENT Doc 
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    Status: Physician
    Posts: 3453
    Joined: 01/14/2017

      If OP doesn’t feel they have any obligation to compensate in that matter, then that’s fine (and I wouldn’t disparage them) but personally I would do something to compensate them for their time and efforts to this point.

    Click to expand…

    I would also add that is seems very paternalistic that you feel the need to question the agent’s compensation model. Agent and buyer willingly agreed that agent gets paid a large sum of money in a certain circumstance. That circumstance didn’t happen. Agent knew that was a likely outcome, but agreed to the deal anyways. What’s the problem, here? It’s almost insulting haughty to presume you need to “make right” a situation that the agent agreed to and is an integral element of the business model.

    Click to expand…

    I don’t think CREGuy is being haughty here – just proposing that a small gift might be nice in order to lubricate the wheels of life in that community.  Working nice and playing well with others kind of thing.  If I were in a similar position, having used the realtor we did, I would almost assuredly get them some small gift.  They’ve been around a while, know a lot of people, live down the street, and it’s probably not the best way to start off life in a new community.  But again, that’s just me.  And I wouldn’t disparage someone either if they didn’t.  I don’t think there’s any shaming or arrogance going on here – just a “here’s another approach that I would do” sort of thing.  Another example:  I’m under zero obligation to tip movers – I paid them for a service already.  But me tipping them isn’t taking a paternalistic approach to their compensation model.  I’m just trying to make sure that they give my (wife’s) stuff “extra attention”.

    #219980 Reply
    Avatar octopus85 
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    Joined: 08/13/2017
    Click to expand…

    I don’t think CREGuy is being haughty here – just proposing that a small gift might be nice in order to lubricate the wheels of life in that community.  Working nice and playing well with others kind of thing.  If I were in a similar position, having used the realtor we did, I would almost assuredly get them some small gift.  They’ve been around a while, know a lot of people, live down the street, and it’s probably not the best way to start off life in a new community.  But again, that’s just me.  And I wouldn’t disparage someone either if they didn’t.  I don’t think there’s any shaming or arrogance going on here – just a “here’s another approach that I would do” sort of thing.  Another example:  I’m under zero obligation to tip movers – I paid them for a service already.  But me tipping them isn’t taking a paternalistic approach to their compensation model.  I’m just trying to make sure that they give my (wife’s) stuff “extra attention”.

    Click to expand…

    That seems reasonable, and yes, I tip movers.

    If you hired an attorney on contingency, and they lost the case, would you think it appropriate to slip them some cash under the table? Personally, I would view that as perhaps well-intentioned, but professionally insulting.

    #219984 Reply
    Avatar Tim 
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    Status: Accountant
    Posts: 2849
    Joined: 09/18/2018

    “The OP engaged the services of an agent to help find a house to buy and assist with the buying process.”

    Hmm, don’t me to parse words here. Not an attorney. Buyer realtor offered to show a house or 20. Very very nice of her. No terms and conditions were discussed nor agreed to. Listing agent and selling agent, there was no buyers agent. Without a signed contract, BOTH have fiduciary responsibility ONLY to the seller.
    IF the buyer wants her to represent him, her legal relationship changes substantially. I believe a written Buyer’s agreement is required, engaging in conversation, showing etc. has no bearing on her legal relationship. In the absence of a buyer’s contract, she is working and paid for by the seller 100%.

    #219992 Reply
    Avatar orthodoc2018 
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    Status: Physician
    Posts: 74
    Joined: 07/18/2018

    Thank you everyone for the input. Turned into a much more interesting discussion than I intended!

    I think we going to go it alone. I spoke to our realtor and she was clear that we never signed anything and don’t owe her anything. She was content to know that we’ll likely refer to her in the future since she treated us well.

    That said, it is a small community and everyone knows everyone so although I don’t really feel like she did a lot of work on our behalf, we’re likely going to send her a small gift (basket or gift card).

    #220052 Reply

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