Realtor related Questions (sales, insurance, broker)

[Joe0109]

I have a realtor that I have been working with to buy a home. He also looked at our house to determine what we may need to do to sell it. For selling my exisiting home, I have not really done much.

At this point we have not signed any paper but he did exchange some e-mails to show us the homes to buy.

I have three questions.

(1) For the home we want to purchase, it it the seller's responsibility to pay the commision to my realtor. In this case the seller is a home builder. Is that correct? Typically how much my realtor will get paid?
(2) Though at one point I did verbally talk to my realtor about selling my home but due to family circumstances I have decided not to sell it for now. Am I under any obligation to my realtor. He saw the house once but after that we have not taken any actions. We have not signed any papers.
(3) Is there any official paper work we are supposed to do to keep the line of responsibility clear?

Thanks.

[ROY DUBOSE]

1) any commission is negotiable -- the typical "side" of a transaction is 3% of the sales price -- some builders offer additional commission to build interest/traffic. also, some builders add additional bonus payments to realtors for multiple sales during a given time period -- ultimately,you probably won't know the realtor's commission until closing
2) not being an attorney, i cannot speak to obligations other than what i've experienced. it has been my experience and understanding that, in Texas, verbal agreements are not binding --a seller that has signed a listing agreement may withdraw the listing at any time
3) as far as formal documents, i believe it wise to sign a "buyers representation agreement" that offically recognizes an agent as your representative -- also, your prospective agent should have already presented and explained this information which is covered by a document known as "information about brokerage service"

[Joe0109]

Am I obligated to sell my existing home with the realtor if I have not signed the agreement?

3% of sales price seems to be large sum of money. I understand that this comes from the seller (home builder). But can it be negotiated where may be 1.5% is given to me and 1.5% to the realtor?

[Jennibc]

Originally Posted by Joe0109

Am I obligated to sell my existing home with the realtor if I have not signed the agreement?

3% of sales price seems to be large sum of money. I understand that this comes from the seller (home builder). But can it be negotiated where may be 1.5% is given to me and 1.5% to the realtor?

You are not obligated to sell your existing home with this realtor if you have not signed a listing agreement.

ANYTHING is negotiable, but you will have to discuss that with your realtor before you sign an agreement with him to represent you as a buyers agent. He or she may not want to represent you if he is losing out on half his pay.

[proinspector]

Don't for get to have both homes professionally inspected. Most especially the one your buying.
G

[Joe0109]

Originally Posted by Jennibc

You are not obligated to sell your existing home with this realtor if you have not signed a listing agreement.

ANYTHING is negotiable, but you will have to discuss that with your realtor before you sign an agreement with him to represent you as a buyers agent. He or she may not want to represent you if he is losing out on half his pay.

- I agree that the realtor will get less money if I had 1.5% of the commission and he had 1.5% out of the 3%. But still that is an amount in thousands. I am trying to find out how much typically people negotiate out of the 3% of realtor commission - if not 1.5%.

Also what is the breakdown of 3%? Out of 3%, the realtor may need to pay some portion of it to the broker. It will be great if I can some understanding of it.

[ROY DUBOSE]

everything is negotiable with a builder (or any home seller) -- more than likely they will want to do "upgrades" instead of lowering the price or cutting the realtor's commission -- there are some legal issues on the builder's part that will need be taken into consideration on a final "deal" -- builders rarely take the buyer's "side" commission off when they sell a home to someone that just walks in without representation -- know too that the sales person at the development is going to get a "side" too -- they aren't paid a salary or an hourly rate to sit in a subdivision office and show folks around --

[Joe0109]

Originally Posted by ROY DUBOSE

builders rarely take the buyer's "side" commission off when they sell a home to someone that just walks in without representation --

That makes sense. I understand that I can not negotiate the commision with the builder but can I ask my realtor to split his commsion in half to me? So if he is getting 3% of the sales price then can he share a portion of it with me? If so how much is reasonable?

What is the breakdown of 3% commision? Who gets what?

[kiacook]

I don't understand why you think you should get any of the 3%. That's what your realtor normally gets paid. I don't think asking your realtor to share any amount of his/her normal salary is reasonable, unless you have some kind of reason behind it.

[ROY DUBOSE]

of course you can negotiate anything with your buyer's agent as well -- what can you get by with? dunno :P

i can understand your wanting to get the most for your money and some "icing on the cake" from a buyer's agent would give you a transaction to brag about but, if you don't mind me asking, how would you know that you weren't overpaying to begin with? -- how would you know if the builder was charging you closing costs they normally pay as a seller? -- who is going to manage the 15-20 people involved with the transaction after the contract's written? a buyer's agent has a fiduciary duty to you to protect your finanical intersts and you'd want him to do it for less than the "going" rate?

an agent is an independent contractor that has to pay the broker and uncle sam, has a huge and ongoing investment in education and certification, and, has to pay extra for insurance before they account for the time they invest in a transaction that isn't guaranteed to produce a single dime of income -- why would you want an agent to give up half (or any) of that commission? if you want to ask someone to give up the dough, have a professional buyer's agent make a case to the builder to give up some of their commission -- makes more sense -- i believe that's what you'd want a buyer's agent to do