question for realtors (buyer's agent, commision, commission, agreement)

[sandycat]

question: Does an agent have to disclose if there is a bonus to buyer's agent? The reason I'm asking is that we just found out that our agent will receive a bonus for selling the house we bought. Had we known there was a bonus for her, we feel like we could have had more negotiating power. Am I right? This seems weird to us and the papers are signed. She claimed that she didn't know about the bonus until now and it wasn't on the MLS. yes, no, maybe so?

[sls76]

We offered a bonus and then changed the buyer's agent's commission to 4%when we sold in FL. I'm sure the RE laws are different, but I asked our agent if the buyer's agent would disclose this. She seemed to say they should, but I don't think they were legally bound to. Our realtor in NC really pushed one house which made me wonder what she was getting out of it over and above standard commission. I didn't ask though. I highly doubt your realtor was unaware of the bonus, but you never know.

[Brandon Hoffman]

I doubt you would have had more negotiating ability. Commissions are different than sales price. Your agent probably should have disclosed that up front, but it is possible that it was oversight. I actually had a similar situation once where I didn't notice a bonus being offered until later on.

[Eric Young]

Sandycat -

The ethics of disclosing have been well covered elsewhere in this forum. The consensus here is that it should be disclosed. Most agents also felt that buyers are only entitled to the "extra" money if there was a written agreement about agent compensation. Obviously, if your agent had no guarantee of X commission and the home you purchased offered less than that, you probably woudn't take too kindly to him asking you to make up the difference.

Agents expressed less agreement when commissions were significantly higher than average. A majority here felt that a 10% commission should yield a tangible benefit to the buyer.

State law will dictate whether there is a requirement to disclose the commission. If your agent cannot adress the issue to your satisfaction, contact his broker.

[Mike1306]

I never disclose what the commission split is or if there is a bonus.
I show homes that suit the needs of my buyer and takes the co-op that is offered.
Does the buyer feel that they paid more than the house is worth?
If so, why did you offer that?
Sometimes we make 2%, sometimes we make 3%, sometimes we make more.
If you did not have an agreement with the agent before looking at homes then they get what they get.
If you had decided not to buy anything were you willing to pay the agent for their time?

[PDXmom]

Sandycat, I see that the agents that answered your question are not from NC. I found many real estate laws here to be different than in my previous state. If Mike or Leigh don't see this, I would PM them.

My only thougth is since your agent says he/ or she wasn't aware of it, express your concern, see what they say. If you still feel you could have gotten a better deal ask the agent to sign over a % of the extra bonus to you for closing cost. Of course, you may have no legal recourse.

Good luck. I hope this doesn't spoil your new house experience!!

[vq1]

Originally Posted by sandycat

question: Does an agent have to disclose if there is a bonus to buyer's agent? The reason I'm asking is that we just found out that our agent will receive a bonus for selling the house we bought. Had we known there was a bonus for her, we feel like we could have had more negotiating power. Am I right? This seems weird to us and the papers are signed. She claimed that she didn't know about the bonus until now and it wasn't on the MLS. yes, no, maybe so?

Since you originally posted this on the Triangle forum, I am going to assume that you are in North Carolina.

The Charlotte Observer recently reported on these types of activities. To the best of my memory, the NC Real Estate Commission stated that Agent Bonuses were required to be disclosed to the Buyer prior to the offering of the Purchase Offer.

As you say, you were not informed of the bonus until after the Offer. Therefore, it follows that you were not notified by your Agent as required.

Your statement that if you had known of the bonus, it may have influenced your Offer is very understandable.

The best advice would be to suggest that you call the NC Real Estate Commission in Raleigh (919-875-3700) and ask them their thoughts as to your specific situation.

Good luck!

[jimj]

Originally Posted by Mike Peterson

I never disclose what the commission split is or if there is a bonus.I show homes that suit the needs of my buyer and takes the co-op that is offered.
Does the buyer feel that they paid more than the house is worth?
If so, why did you offer that?
Sometimes we make 2%, sometimes we make 3%, sometimes we make more.
If you did not have an agreement with the agent before looking at homes then they get what they get.
If you had decided not to buy anything were you willing to pay the agent for their time?

And people wonder why some distrust RA's..... I could be reading this totally wrong and if so I apologize in advance, but it sounds very self serving and not in the best interest of the one who contracted the service to begin with. Can anyone say duty to the client or, is it just to self?

[MikeJaquish]

Sandy,
I don't like advising other agents' clients, so I would say, "Read your agency agreement."

As I read them:
If you signed the "Exclusive Right to Represent Buyer," bonuses are mentioned, and you agreed to allow your agent to accept them in Section 4 on the first page.
If you used a non-exclusive agreement, that is a different form, with fewer contractual protections for either party.

Bottom line, read the agency agreement, and see what it tells you.

[jdhall1]

I disclose if the commision rate is higher that what my buyers agreement is signed for and if there is a bonus. It hasn't bothered any of my clients at all.