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Let me ask you guys a question, we are currently dealing with a terrible buyers agent who kicks back a large portion of her commission to the buyer. Instead of doing this after closing she wants to reduce the price of the home and sign an agreement between brokers that supersedes the MLS agreement that lowers her commission by the amount.
I hate to see her handle her payment to the buyer this way, would this violate your MLS agreement ? Do you see anything that could come back to bite us ?
I don't know of anything that would violate our MLS rules by doing that, but I think an attorney or your MLS head should be able to provide better MLS. I've had one of those guys too. I've done all the work, I feel like that joker shouldn't even be paid. Terrible experience.
Not a problem here. My brokerage has a special commission reduction form for title company instructions where we can reduce broker commission to be paid out and assign difference to either the buyer's closing costs, or a reduction in purchase price. Does not involve the MLS at all.
Yes, this would seem to counter our local MLS agreement, in the offer of compensation to the selling agent. It's been a point of contention in short sales and REO's that the listing agent offers, the bank doesn't agree, too bad.
Did you mis-speak when you suggested that she should do "this after closing"? In Virginia, it's accounted for *at* closing on the HUD-1 either as a selling broker's credit to closing costs, or a seller's credit (new construction).
She may be a terrible buyer's agent ... please don't confuse that with an agent who rebates commission. And you didn't define large .. care to?
Quote:
Originally Posted by Rakin
Let me ask you guys a question, we are currently dealing with a terrible buyers agent who kicks back a large portion of her commission to the buyer. Instead of doing this after closing she wants to reduce the price of the home and sign an agreement between brokers that supersedes the MLS agreement that lowers her commission by the amount.
I hate to see her handle her payment to the buyer this way, would this violate your MLS agreement ? Do you see anything that could come back to bite us ?
Not a problem here. My brokerage has a special commission reduction form for title company instructions where we can reduce broker commission to be paid out and assign difference to either the buyer's closing costs, or a reduction in purchase price. Does not involve the MLS at all.
Yes, we have a standard NCAR agreement form that could be used for this.
Not all states allow for "rebates" at the closing table. This may be why the buyer's agent is requesting this. Or, she may just want to help her buyer close with a lower loan amount that is more likely to appraise.
Rakin, There's nothing wrong with it at all. I've done this with referral fees many times. As long as it's on page 8 and reiterated in special provisions, all parties are covered. Granted, commissions shouldn't be brought up in special provisions, but each time it's come up, that's where the "brokers" wanted it stipulated so full disclosure between buyer and seller were made.
Plus, some seller expenses go down like title policy and commissions to you, unless you stipulate that the seller will pay your commissions based on the original agreed upon sales price.
Rakin, There's nothing wrong with it at all. I've done this with referral fees many times. As long as it's on page 8 and reiterated in special provisions, all parties are covered. Granted, commissions shouldn't be brought up in special provisions, but each time it's come up, that's where the "brokers" wanted it stipulated so full disclosure between buyer and seller were made.
Plus, some seller expenses go down like title policy and commissions to you, unless you stipulate that the seller will pay your commissions based on the original agreed upon sales price.
I hear what you are saying & thanks to all for your feedback. We recently took a class by one of the lawyers on the Lawyer Broker Committee and she indicated that the agent can pursue a claim after closing for the full amount of the commission.
A contract between two parties cannot agree to a 3rd or 4th party doing something.
The irritating part of this is the agent is so poor she does not call or take care of business. They have set minimum standards for listing agents but discount buyers agents can just put their name on the contract to collect the fee. We have requested her client stop communicating with us directly and go through their agent.
One of the negatives is this hurts sold comps which are already hard to come by and does not reflect the true sales price in a community.
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