Pay Up, Or You'll Be Sorry!

By
Real Estate Agent with Century 21 Moline Realty 40022101

 The phone rings, and you pick it up.  It's another agent from somewhere not immediately local, but still within driving range (in rural Minnesota, I'd say within 60 miles or so.).  You do what every agent would do.  (At least in Minnesota!)  You greet them cheerfully, and ask them how they are, how business is, and finally, what you can do for them.

The line is quiet for a few long seconds, and then you hear...

"I was wondering if you could offer a bigger payout on your listing."

Okay, I can work with this.  This is negotiable.  No big deal. 

"If you don't increase the payout, I will not show the home."

Now, let me stop for a second and just fill you in here.  This is a BIG sore spot of mine.  I am sorry if I offend anyone, and hope that you will at least entertain my mindset for a few minutes while you read this blog.  It isn't wrong to ask, but a threat?  That's just too much...

I stopped by the blog of Maya Thomas last night to read Half Of 1 Percent Commission!? and was immediately set off.  Not by Maya, but some of the replies that I saw, and the memory of some of the calls I get on a regular basis.

I can be reasonable, and I am usually willing to work things out.   However, my experience has been that when a buyer's agent calls me to increase my commissions, it is usually from a (honestly) low comssion to a pretty high commission (for our area) on a $70,000 property that I have had listed and advertised for six months, and the agent WILL NOT show it unless I agree to their payout. Lots of cash

Don't get me wrong.  I understand that you may have to drive ALL THE WAY to Mora to show my listing.  I understand that gas is expensive.  What I don't understand is why you need $2,800 to call me, complain, drive up to Mora ONCE (that's all that usually happens, is the one time.), write an offer, and fax it to me.  Meanwhile, by upping your commission, I've just nearly eliminated mine, and am making less than you, despite my newspaper and internet advertising, lock box, sign, maintaining the listing, and doing all your "local work" for you after you do write an offer. 

You know, one time I drove 300 miles round trip to show a commercial building to a client, for a VERY low payout.  When I called to schedule the showing, one of the first things the agent said to me was "Just so you know, I won't up the commission."

I said "No problem".

Silence.  Then, "really?"

The listing was priced at $60,000.  My clients were debating writing for $45,000.

They didn't like it, didn't write, and I drove home again, not really worried about it.

Nor should I have been.  They have changed directions, and instead of looking for a "tough" foreclosure to flip, are now looking for a commercial building for their business.

I have clients who I have made a total of $600 on, before gas, advertising, etc.  However, they tell EVERYONE they know that Joslyn ROCKS!, and they are worth more than money to me.Showing

Have we as Realtors forgotten why we are here?  I'm not here for a commission check.  I'm here to help people find the home of their dreams.  To help people make memories.  I love walking through houses with buyers and hearing them say "Oh, this room will be perfect for the baby!" or "I can really see us getting old here."  I love walking through homes with sellers, who are leaving a home that they have loved for so long, and although sad, are anxious and excited to begin a new chapter somewhere else.

Heck, I would probably do this even if I never got paid. Poor

I know that there are readers out there who are going to say "Joslyn, you're selling yourself short.  I'm not going to do that.  I'm worth __%.  My services are VALUABLE Joslyn.  I'm a highly trained professional."

Yes, you are. So am I.  In fact, I'm a professional who has a code of ethics to abide by. 

Duties to Clients and Customers

Article 1

When representing a buyer, seller, landlord, tenant, or other client as an agent, Realtors® pledge themselves to protect and promote the interests of their client.

Promote the interests of their client?  Wouldn't that mean showing them a house, even if the commission wasn't good enough for YOU?

I know that someone will come back and say "but Joslyn, what about promoting the interests of your seller?"

That's a very valid point.  I never flat out give up.  I negotiate things out, try to reach an agreement.  However, my seller signed an agreement to pay a cooperating agent ___%, and that is all they are interested in paying.  They chose that amount of commission when they chose that listing price.  More commission = higher price.  Get it?

I guess, if you insist on having a certain amount or you won't show the property, you can do three things.

•·          Don't show my listings

•·          Ask your buyer to pay for it

•·          Go jump in a lake

  

Hearts and smiles - 

Joslyn Panka 

  

 

Posted by

Joslyn Panka Solomon & Nicholas Solomon - Realtors

Century 21 Moline Realty

Looking for an East Central Minnesota home?  Start your search here and find the perfect property!  www.century21moline.com

Follow me on facebook!  www.facebook.com/joslynsolomon

 

 

Comments (109)

Richard Goates
Apex California Realty - Redding, CA
Broker 01251781

You tell them! I guess at least that agent asked PRIOR to writing up an offer and not AFTER like what happened to an associate of mine years ago and myself. We had a very low offer from an agent across town and it didn't go together. We had been working on this land for 2 years,advertising,marketing etc and spending a lot of money. We decided to change the listing commission to the buyers agent as we felt that we were giving the farm away and the market was starting to heat up so we may even sell it ourselves soon.The same agent above wrote up a new offer about a month later and when it was in escrow said that he was to get paid the former commission or he would sue everybody! This is after he had the property in escrow and after a month on the market at the new commission offered!

Rick 

Nov 12, 2007 02:43 AM
Maura Neill
RE/MAX Around Atlanta - Alpharetta, GA
North Metro Atlanta Real Estate

Hi, Joslyn! It seems you have created quite a stir here...good for you!

I didn't get to read your post in its original, members-only form, but from the comments, I see it must have been some post!

I'm sure none of the below comments will be original, since so many have already commented and I can't read all 90 comments, but here goes:

Regardless of how many sales you have under your belt (as your anonymous and should-be-deleted commenter made a point of mentioning), calling an agent and threatening to NOT SHOW a property without a bigger payout is totally ridiculous. Since the commission paid by the seller is negotiated in the listing contract - and the commission paid to the selling (buyer) agent is also spelled out in that agreement, that is the agreed upon, contracted amount. Period. If the buyer agent has a buyer brokerage agreement with his/her client spelling out a larger amount, then let the buyer pay the difference.

Personally, I think that agent is doing a HUGE disservice to his/her clients by demanding an increase in the commission paid to him/her.  If the home fits your clients' specifications, it is your responsibility to show it to them, regardless of the commission. In my humble opinion.

Good for you for standing your ground, Joslyn!

~Maura Gebhardt

Nov 12, 2007 04:11 AM
Celeste "SALLY" Cheeseman
Liberty Homes - Mililani, HI
(RA) AHWD CRS ePRO OAHU HAWAII REAL ESTATE
Joslyn...well, I'm sure a lot more than you had done that ...in any case...delete the anonymous comment....and mark it spam...:)
Nov 12, 2007 04:22 AM
New Jersey Real Estate James Boyer Morris, Essex & Union County NJ Realtor
RE/MAX Properties Unlimited, Real Estate - Morristown, NJ
Good Artical Joclyn,  I have never asked someone to raise the commission for me as a buyers agent.  I have grumbled about it, and been down right angry that the closing table looking at the hud1 and seeing that the listing agent is getting considerably more than I am.
Nov 12, 2007 06:26 AM
Anonymous
Pat Emmett

Aside from any ethical debate, I am a practical realtor and I have to wonder how an agent could avoid showing a home to an inquiring buyer in today's internet world and what a buyer's agent would tell a buyer as to why a home wasn't shown to them. 

Seems to me there would be some stuttering trying to explain that "yes", I'm YOUR agent, you can trust me, I love you, your kids and your dogs, but I won't show that house cause I won't make enough money. 

Also, seems that would be a good way to lose a buyer.  With realtor.com, local web sites, personal web sites and a zillion others, buyers are extremely sophisticated in their home search and get to know the market pretty darn quick.  I think one's credibility would suffer greatly.

Interesting post.

Nov 12, 2007 08:11 AM
#94
Amanda Evans
DFW Living - Fort Worth, TX
Real Estate Broker - Fort Worth Texas

WOW!  What a thread.  I think it's been pretty well covered, except one thing...with all due respect, I don't think this one should have gone public.

More importantly...What the heck happened to Lenn Harley's comment? 

Nov 12, 2007 08:34 AM
Judith Clausen
Buyers Advantage Real Estate of Metro Denver - Denver, CO
Judith R. Clausen

I suppose Lenn could have removed it, though that seems odd.

Pat Emmett, I'm copying my earlier answer.  I know it's hard to read all the comments on a post, so here it is:

Buyer's Agents are well within their rights and it's well within the COE to ask for more before agreeing to show a property.  You're assuming that clients don't know what their agents are offered in terms of compensation.  Haven't you all taken the NAR Ethics course? 

In my market I've seen compensation offered that's well below my minimum.  Why do you think agents and their clients would agree to that kind of arrangement when chances are good that the clients will have to pay the difference?  My clients turn down offers of compensation that are less than my standard fee.  They don't want to wind up having to pay more because they're using me as their agent!

Nov 12, 2007 10:40 AM
Anonymous
Pat Emmett

Judith, you missed my point.  I think making a decision to show based on compensation paid to an agent - which may result in a buyer not getting a home that they realllly would like may not result in a happy agent/client relationship down the road.   Since most BA still are compensated by the seller (at least in our market),buyers usually are not asked to participate in the the commission.  And, at this point, in our market, it is a hard sell and not generally done.  

Perhaps it is different in your market and the differences sure have contributed to a lively discussion.  

You are correct in that it is hard to read all the posts, so I missed your first response when scanning.  

 I am all for fair compensation for the job well-done and our policy is to offer fair splits to all types of agency.   I don't blame any agent for not wanting to show a low compensation offering, but I'll end this where I started....an agent won't make their clients happy if they don't get their "dream House" because of the agents paycheck. 

and, yes, I'm familiar with NAR Ethics courses.    

Nov 12, 2007 02:36 PM
#97
Jim Polhemus
Long and Foster Real Estate, Inc. - Virginia Beach, VA
Virginia Beach Real Estate

I haven't read through all of the posts, so I don't know if this has been addressed. I'm of the opinion that only showing a client a home if the listing agent increases the commission is entirely unethical. State laws in both Virginia and North Carolina (I'm licensed in both) require licensees to do what is in the best interest of the client, not the greedy, self serving so-and-so's that perpetuate the "slick salesman" image real estate agents have.

 

This is, of course, my personal opinion.

Nov 13, 2007 08:28 AM
Amanda Evans
DFW Living - Fort Worth, TX
Real Estate Broker - Fort Worth Texas

Hey Jim--Take the time to read the comments on this one.  It was a fantastic debate and the read is worthy.  I think a few people may have changed their minds and those that didn't likely feel even stronger about their opinion. 

 

 

Nov 13, 2007 08:45 AM
Jim Polhemus
Long and Foster Real Estate, Inc. - Virginia Beach, VA
Virginia Beach Real Estate

Ok, Amanda. I'll read the entire debate. Just to be clear, my problem is not with the agent asking for a higher comission if it's below what they (or their company) considers fair. I work by the "if you don't ask for it, the answer is ALWAYS no" principle. If 2.5% (or 3 or 4, whatever) commision is the "norm" in an area then that would most likely be considered just compensation. The agent traveling out of his/her area to show a property really should have no expectation of a higher split to pay for his/her gas, IMHO. I travel up to 1.5 hours to show properties all the time and would never consider using the tactics described by Joslyn. If my client wanted to see a property only offering two percent I would still show, and I would also ask the listing agent for a higher split, but I would NOT extort the money from them.

 

Okay, I'll now read ALL the post and get back here if I change my mind. ;)

 

 

Nov 13, 2007 09:24 AM
John Doiron
Coldwell Banker Burnet - Savage, MN

Joslyn,

I decided to skip a whole bunch of comments because I needed to get done with this and go home. I work in the Twin Cities, and there is a level of expected (not mandated) compensation for buyers' agents here that doesn't always match that for greater MN. As long as there is that disparity you will have issues like this.

That being said, it is my responsibility as their agent to show them homes they want to see, regardless of the commission payout to me. I will, however, inform them of such a disparity if they are intent on writing an offer. Actually, when we sign a BBA I spell out all the situations relating to commissions, so they should already be educated on that.

Keep working hard and serving your clients. Maybe I'll bring someone up there someday!

Nov 13, 2007 09:52 AM
Nick and Joslyn Solomon
Century 21 Moline Realty - Cambridge, MN
The Solomon Team - Century 21 Moline Realty, Inc.

Bob and Carolin -  That is a good plan, and exactly what I have done before.  It's always a hard spot to put your seller in, though.  Especially when they aren't out of line in the first place!

Gene - I'm sorry, I guess I don't see it.

Doreen  - It sure is!  That is the #1 reason I love Active Rain!

Lucky - I'm just not sure why the "or I won't show it" needs to be thrown in.....

Maggie  - I'm jealous! 

Judith - I was in the fair market range, and the request was significantly above.  I think maybe the unreasonableness of it is really what set me off. 

Robert -   I agree that the market has changed!  However, that doesn't mean that buyers or buyers agent can be unreasonable just to be unreasonable...

Nov 13, 2007 03:35 PM
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time
Hey Joslyn, Just wanted to stop back by and commend you on a job well done with handling all of these comments. You done good:)
Nov 14, 2007 11:14 AM
Frances C. Rokicki
Fran Rokicki Realty, LLC - Bolton, CT
Broker-Mentor,CRS
Joslyn, We have Buyer Agency here in CT, so, if the agent representing the buyer has the commission stated in her agreement with the buyer, it can be added to the sales price and then paid to the buyer's agent at time of closing.  I have done it, and it works just fine.  I think you are right, you should not have to pay it or go back to your seller for it.  Let her present her offer, including her intended commission in writing, so that, all parties are informed.
Nov 15, 2007 10:40 AM
Rob Arnold
Sand Dollar Realty Group, Inc. - Altamonte Springs, FL
Metro Orlando Full Service - Investor Friendly & F
Also these buyer agents need to be very careful when asking to up a commission. Article 16 of the Code of Ethics goes into detail on how this can and can't be done.  After they show the property it is too late to try and re-negotiate the commission amount.
Nov 15, 2007 12:16 PM
Jennifer Kirby
Kirby Fine Homes - Minneapolis, MN
The Luxury Agent

Wow, I missed this one. What an interesting read. I actually got really mad about the anonymous post and almost put on my boxing gloves for ya. Don't mess with good agents. I absolutely HATE the people who try to pull that crap. Good that you know who they are! You handled it VERY well and show how much more of a professional you are compared to them. :)

Nov 15, 2007 04:02 PM
Judith Clausen
Buyers Advantage Real Estate of Metro Denver - Denver, CO
Judith R. Clausen
Frances, in our market we'd have trouble with the appraisal doing that.
Nov 16, 2007 02:48 AM
Joyce Heffner-Williams
Keller Williams Clients' Choice Realty - Monument, CO
Owner/Broker/EcoBroker - Monument Real Estate

You can't let people push you around, but you need to do what you can, within reason, to get the deal done.

Nov 17, 2007 02:03 AM
Nick and Joslyn Solomon
Century 21 Moline Realty - Cambridge, MN
The Solomon Team - Century 21 Moline Realty, Inc.

I'm sorry to everyone - I am not ignoring your comments.  I have been sick and unable to keep up.  So here goes, hopefully I can catch up now!

Broker Bryant - THANK YOU!  I haven't felt like I've done the greatest job, so I really appreciate that comment!

Fran - I think that may be the best way to do things - if you can get it to appraise.  It seems like everything is very touchy as far as appraisals go lately....

Rob - At least this agent asked BEFORE they showed it!  It could be worse!

Jennifer - You rock!  I know you would never do this to me.... but some of those metro agents......

Judith - Wow!  That was my first thought too!

Marina - I agree!

Nov 19, 2007 04:25 AM

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