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Please! Don't be THAT guy!

By
Real Estate Agent with Residential, Investment properties, rehab projects, property management, luxury homes, new construction!

Sick agentsRight now, I'm feeling a little ill.  Why?  Because I'm seeing things in the real estate world that I've never seen before.  It's happened a LOT since I left my former brokerage and it's like blinders are off.

My team is dealing with an agent, well let's not say where this agent is from but suffice it to say that it is someone that many agents, including myself have looked up to in the past.

 

 

SO as we are negotiating out this deal, some things come up that might be sticking points (but should NEVER be a sticking point).

The main one has to do with co-broker commission.  This property was taken with a 2.5% co-broke on it and it is listed in the MLS as such.  Now personally, I have never let the co-broke offering influence if I show a property or not.  It just isn't ethically allowed to happen, right?

 

So this agent submits an offer and asks for 3%.  Nothing wrong with asking...he/she is told that the co-broke is 2.5% and that it is listed that way in the MLS.

This particular agent is known for consulting or teaching other agents that you NEVER discount your listing comission and that he has a standard comission that he charges.  Remember, this is an agent that a lot of newer agents have been taught by and they look up to.

So the email comes in a little while ago that this agent understands the "lowered commission" and that he/she built his/her business on the 4% listing agreement, always offering at least 3% to the buyer's agent.  That came as a bit of a shock to hear that admittal...but the rest of it just blew my doors off.

He/She goes on to say, "could we increase the counter offer by $450 and then have you offer a $450 bonus to me to make up for the loss of the extra 0.5%?"

 

Shocked

 

Did that agent just really say to stick it to his buyers, not tell them, so that he/she could make more money on the deal?

Doesn't the Code Of Ethics govern this type of Behavior!??????!

C'mon folks...don't be THAT GUY/GIRL!

Ron Tarvin
Residential, Investment properties, rehab projects, property management, luxury homes, new construction! - Katy, TX
Broker, Katy, Houston, Cypress 77450,77494,77095

James--very sad indeed!  If there is one thing that I would change about this career field it would be to more closely police the ethics in the business. 

 

UPDATE:  This agent just left a voicemail that if he/she can't get the BTSA, and he/she doesn't know what the the big deal is because his buyer is ultimately paying for it anyway, then he will take them on to another house.  OMG!  The deal is pretty much worked out for the buyer and the seller, it's only about the COMMISSION!

 

Jan 27, 2009 05:29 AM
Diane Ocenasek
ReMax of Higgins Lake - Higgins Lake, MI

It is not about the commission as much as $450!!  That is unbelievable that someone in this market can afford to move on it is a waste of time which is a waste of money!

Jan 27, 2009 05:44 AM
Michael Fontana
Round Rock Home Stager Austin Home Staging - Round Rock, TX
@ The Stage Coach

hi, Ron:
All of the above comments confirm one of my business mottos:  "There's always one Jack@ss!" Don't let them influence you and your professional standards.

If the seller and the buyer are at the table, what could he possibly tell the buyer that would not be either a lie, or fraudulent?  Not sure what this Yahoo's thinking.

Keep us posted!

The Stage Coach Austin Home Stager

Jan 27, 2009 06:11 AM
Angela Pernisco
Knipe Realty NW - West Linn, OR

My goodness, what ever happened to take care of your buyer and they will take care of you through referrals!  Even if they don't know directly that he was wanting to stick it to them, most people can figure it out intuitively!

Jan 27, 2009 06:36 AM
Ken Tracy
Coldwell Banker Residential - Naperville, IL
Helping clients buy and sell since 2005

Hi Ron.  I love the picture of the jaw dropped guy.

Hard to imagine an agent asking for this.

Thanks for writing,

Ken

Jan 27, 2009 06:36 AM
Mott Marvin Kornicki
Waterway Realtors® • Notary Public & Apostille - Sunny Isles, FL
Miami Notary & Apostille 786-229-7999

Ron~

I see this all the time here. I had a very valuable experience many years ago. The listing agent tried to buy the property under her fathers name and turn around and sell it to my buyer. The price her father was buying for was 80K below the list price and 150K above my buyer price. Basically a windfall of about 100K on a 250K condo. In the end, she wanted to cut MY commission to 1%- the MLS listing called for 3%. So, people can make money in this business! U_N_E_T_H_I_C_A_L .

Mott Kornicki // Real Estate In Miami // Associate | Broker

Aventura-The Waterways // Bal Harbour // Sunny Isles Beach • Florida

Jan 27, 2009 06:39 AM
Rich Mielke
REMAX Results, Frederick MD - Frederick, MD
REALTOR, Frederick Maryland Real Estate

When working with buyers, I have them sign a buyer agency agreement. This allows me to exclusively represent them and it sets a minimum compensation that my broker will be paid on a transaction. If the co-op offered on a property is less than the agreed upon amount in my buyer agreement, the agreement spells out how the difference will be made up. Why would I go to the selling agent and ask his client to pay me more?

Jan 27, 2009 07:02 AM
Kay Van Kampen
RE/MAX Broker, RE/MAX - Springfield, MO
Realtor®, Springfield Mo Real Estate

Well, I know who he's working for.  Would I go back to my clients and ask for $450 more.....I don't think so!  Guess it can never hurt to ask.

Jan 27, 2009 07:40 AM
Kent Simpson
Realty One Group Mountain Desert - Tucson, AZ
Real Estate Is About People

Sounds like 3 calls need to be made:  1.  To your local ethics committee  2.  To the state licensing authority and 3.  To anyone that hires this slimy piranha to teach others about how to practice real estate.

Hang 'em high!

Jan 27, 2009 11:43 AM
Barbara S. Duncan
RE/MAX Advantage - Searcy, AR
GRI, e-PRO, Executive Broker, Searcy AR

I loved the illustrations.  I also loved Rich Mielke's solution to this problem.  If that were done for all transactions, it would be beautiful.  This agent that you're dealing with sounds like a bad egg...and selfish.

Jan 27, 2009 01:17 PM
Ron Tarvin
Residential, Investment properties, rehab projects, property management, luxury homes, new construction! - Katy, TX
Broker, Katy, Houston, Cypress 77450,77494,77095

Diane--Personally, I wouldn't care if it was $450 or $1450 (although you might understand motivation a little better), sticking it to your client that you have a buyer's rep with is illegal and unethical!

Michael--agreed...he'd be lying to their face or to their contract that he is "representing" them.

Angela--I don't know what happened to that...it should be a natural course of action to take care of your buyers (or sellers) because you have COMMITTED to doing so.

Jan 27, 2009 11:10 PM
Ron Tarvin
Residential, Investment properties, rehab projects, property management, luxury homes, new construction! - Katy, TX
Broker, Katy, Houston, Cypress 77450,77494,77095

Ken-yeah, I'm shocked just like the guy in the picture!

Mott--Wow...that would really tick me off!  That's unbelieveable...and I would think HAVE to be disclosed!

Rich--That is probably the case here too, Rich.  They have signed an agreement like that but the agent doesn't want the headache of trying to collect that from the buyer.  Either that, or he wants to look like the hero by "sacrificing" a 1/2 percent!?  Who knows!

 

Jan 27, 2009 11:13 PM
Ron Tarvin
Residential, Investment properties, rehab projects, property management, luxury homes, new construction! - Katy, TX
Broker, Katy, Houston, Cypress 77450,77494,77095

Kay--It doesn't hurt to ask, but when you are told the compensation, then that's the end of it.  You shouldn't try to end around your buyers through the listing agent and final sales price!  The buyer's MAY have been obligated (by their rep agreement) or may have willingly allowed this, but he didn't even ASK!

Kent- You're a black and white guy like me...I agree.  This gets reported to his broker, the real estate commission and ultimately, to get the word out that classes taught by this individual are BUNK! However, on the other side of things (as my wife likes to remind me) there are repercussions for making this kind of noise with the state board.  Just have to determine how important it is!

Barbara--never thought he was a bad egg. Always thought he was a good guy.  As I said, blinders are off now and I see things I never saw (or never wanted to see) before.

Jan 27, 2009 11:18 PM
Caren Wallace
Premier Property Group LLC - Tualatin, OR
Portland Caren Real Estate

I think that the listing commission should be the end all be all unless the seller tries to need legitimate assistance.

Jan 28, 2009 01:58 AM
Ron Tarvin
Residential, Investment properties, rehab projects, property management, luxury homes, new construction! - Katy, TX
Broker, Katy, Houston, Cypress 77450,77494,77095

Caren-- the offered cobroke commission SHOULD be what the agent accepts.  In our MLS this amount is NOT negotiable and is defined by the listing agreement.

Jan 28, 2009 10:09 AM
Jim Frimmer
HomeSmart Realty West - San Diego, CA
Realtor & CDPE, Mission Valley specialist

In my book that would be a kickback, a definite no-no and possibly even a federal violation of RESPA. Just unbelievable what people will do for a few hundred dollars, but then again, if he's doing this on many transactions each year, it could become lucrative. Perhaps he's in the wrong profession. Sounds like he should be a politician, perhaps Governor of Illinois since it looks like they need a new one to follow in the footsteps of the past four or five unethical governors, some of whom are or have been in jail/prison.

Jan 29, 2009 03:35 AM
Mark Organek
And the United States of America - Mesa, AZ
It's not a game, it's your life.

Ron, I'm sorry that you have to experience that.  If he had a standard commission that he charges listings and he wants the same on a buy side transaction, he should've disclosed this up front.  Not behind his customer's back.

Jan 30, 2009 02:50 AM
Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth

Ron, I hate it when agents don't know what the word Ethics means.

Jan 31, 2009 07:30 AM
Susan Gonzalez Faux painting murals atlanta
Marietta Mural & Decorative Design - Atlanta, GA

Desperate times turn people desperate, I guess. What comes around goes around......

Feb 01, 2009 02:10 PM
Ron Tarvin
Residential, Investment properties, rehab projects, property management, luxury homes, new construction! - Katy, TX
Broker, Katy, Houston, Cypress 77450,77494,77095

JIM--Yeah, that's the ticket! 

Mark--if you have a buyer rep in TEXAS you buyers are responsible fo rthe fee you charge but most of the time that is covered by the seller's co-op!

Gary-- and yet an ethics update is required to renew a license.  Go figure!

Susan--I guess that's true...but makes me wonder if this person has been this way the entire time I've known him/her and I just never saw it!

 

Feb 02, 2009 04:03 AM