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I am working with an agent to buy a house. The contract says the agent commission will be ??% of the purchase price based on the MLS listing. I've just come across a house whose listing expired two months ago. The owner is considering the possibility of selling his house without a realtor. If I buy the house directly from the buyer without it being listed again, how should my agent be compensated? If there is no new listing, there will be no buyer's agent commission % per MLS. The agent has not done much for me anyway. I've found all houses online I want to see by myself. He just made appointments to visit them and drove me around.
If the house isn't listed and you found it yourself and make a deal directly with the seller (perhaps using your real estate attorney services), what professional service has your "buyers agent" performed for you which entitles them to an earned comission in this deal?
Doesn't sound like you have a very professional "agent" working for you, more like somebody seeking "found money" when you find a house you're interested in. IMO, a buyer's agent should be out there finding appropriate houses on the market for you to tour and setting the stage for your successful closed purchase to earn their fee.
Also, it seems strange that the buyers agent contract com % is tied to a MLS listed price as opposed to an actual contract price ... which means you could be paying a com on a number that has little relationship to your actual deal.
If the house isn't listed and you found it yourself and make a deal directly with the seller (perhaps using your real estate attorney services), what professional service has your "buyers agent" performed for you which entitles them to an earned comission in this deal?
Doesn't sound like you have a very professional "agent" working for you, more like somebody seeking "found money" when you find a house you're interested in. IMO, a buyer's agent should be out there finding appropriate houses on the market for you to tour and setting the stage for your successful closed purchase to earn their fee.
Also, it seems strange that the buyers agent contract com % is tied to a MLS listed price as opposed to an actual contract price ... which means you could be paying a com on a number that has little relationship to your actual deal.
No. The commission will be MLS listed % of the actual purchase price, not the listed price.
It might not be my agent's fault not to have done more for me. Any listings interesting me are equally accessible to him and me. So he has no more info regarding listings than I do.
In short, if the house is not to be listed again, based on the commission statement on the agency contract, you don't think I am obligated to pay my agent. Of course, I am more than willing to pay a certain amount as a token of appreciation for what he's done.
I am working with an agent to buy a house. The contract says the agent commission will be ??% (based on the MLS listing) of the purchase price. I've just come across on my own a house whose listing expired two months ago. The owner is considering the possibility of selling his house without a realtor. If I buy the house directly from the buyer without it being listed again, how should my agent be compensated? If this house is not to be relisted, there will be no buyer's agent commission % per MLS. The agent has not done much for me anyway. I've found all houses online I want to see by myself. He just made appointments to visit them and drove me around.
You may want to talk to your agent about the house you found and see how he/she can represent you in the purchase. There can still be negotiating done and you still need someone to put together a contract, get you through the home inspection, and get the transaction closed. Most sellers are willing to work with a buyer's agent and pay them some type of commission for handling the transaction. A good buyers agent does more than just find a house for a client. There are many steps to get through once a suitable home is found until it transfers into your name.
Take a closer look at your contract with your buyers agent. If you have signed a contract with your buyers agent it most likely addresses this issue. We just bought a home here in NC and the "Exclusive Right to Represent the Buyer" contract we signed with our agent spelled out how this would be handled. If you have a signed contract with your agent, he/she will be entitle to a commission regardless of who found the house or whether or not it was listed on the MLS. It doesn't matter if the seller plans to sell without the use of a sellers agent.
Take a closer look at your contract with your buyers agent. If you have signed a contract with your buyers agent it most likely addresses this issue. We just bought a home here in NC and the "Exclusive Right to Represent the Buyer" contract we signed with our agent spelled out how this would be handled. If you have a signed contract with your agent, he/she will be entitle to a commission regardless of who found the house or whether or not it was listed on the MLS. It doesn't matter if the seller plans to sell without the use of a sellers agent.
Of course, the contract intends to spell out every possible situation. It says if the buyer directly buys a house from an FSBO seller, the buyer may have to pay the full amount of the compensation to the buyers agent. However, since the commission will be based on MLS specified %, if the house is not be be listed, there will be no specific commission %. Then it will come down to my discussion with my agent how much he should get paid. The key point here is that the commission is not a flat % of the purchase price. It's solely dependent on the MLS figure. Any differen idea?
Yup...read the contract carefully. They do vary but the standard one provides the commission on any sale. There is often a clause that says they will take the MLS but there is generally a clause for when no MLS.
If you are correct you may lead to a rewrite of the Buyers Agent Contract. In that case you might both consider offering the agent 1.5% to do the transaction.
Sounds like a poorly written Buyers Broker Agreement. It really should have specified a $ amount should you purchase a FSBO. That being said, though, I'd like to bring up a couple of other issues touched on in some of the other posts, and that's what you should expect the agent you've hired to do for you.
First off, showing you houses that fit your criteria is his first obligation. I don't know how long you've been working with this agent, but I'm sure he wanted to show you the homes you picked out first so that he could better understand what you are looking for.
Second, there's probably a reason the home you're interested in expired. Chances are it was overpriced. A buyer's agent should be running comps for you on any property you're considering making an offer on. He should be helping you get the best deal possible. That starts with knowing what the correct price should be on a house and then negotiating the contract to get you that price or better.
Third, the buyer's agent will be helping coordinate inspections, appraisals, and possibly negotiating needed repairs, as well as keeping everything on track so that the deal closes on time.
So, I guess if you don't want the services listed in items 2 and 3 (which to me are the most important services a buyer's broker brings to the table), then I would think the money owed this buyer's agent would be minimal. However, you might actually save yourself money by remaining in the contract with your buyer's agent and letting him get you a good deal and watching your backside for you.
Sounds like a poorly written Buyers Broker Agreement. It really should have specified a $ amount should you purchase a FSBO. That being said, though, I'd like to bring up a couple of other issues touched on in some of the other posts, and that's what you should expect the agent you've hired to do for you.
First off, showing you houses that fit your criteria is his first obligation. I don't know how long you've been working with this agent, but I'm sure he wanted to show you the homes you picked out first so that he could better understand what you are looking for.
Second, there's probably a reason the home you're interested in expired. Chances are it was overpriced. A buyer's agent should be running comps for you on any property you're considering making an offer on. He should be helping you get the best deal possible. That starts with knowing what the correct price should be on a house and then negotiating the contract to get you that price or better.
Third, the buyer's agent will be helping coordinate inspections, appraisals, and possibly negotiating needed repairs, as well as keeping everything on track so that the deal closes on time.
So, I guess if you don't want the services listed in items 2 and 3 (which to me are the most important services a buyer's broker brings to the table), then I would think the money owed this buyer's agent would be minimal. However, you might actually save yourself money by remaining in the contract with your buyer's agent and letting him get you a good deal and watching your backside for you.
Actually, service items 2 and 3 are the major reason I decided to have an agent. But I don't really trust his recommendations or CMAs. He just used foundation size, finished square feet and property tax to come up with recommended offers before I asked him to do adjustements for valuable features like decks, floors, etc. For a house I planned to make an offer on, his suggested offer price was actually much higher than the reduced asking price (the asking price was reduced after a short time). Before I signed my offer, that house got sold. Although he and the sellers agent work for the same realty company, he was not unable to or simiply didn't try to track the status of that house (I told him to prepare the offer before the house got two offers). Otherwise, we could have rushed our offer. In his views, many of houses we've seen are bargains, although they've sitted on the market for a long time. I feel he wants me to rush to a purchase so that he can get his commission quickly without considering whether the price is fair to me.
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Buyers Agent Commission for a House Not Listed
