The Buyers Agent Who Doesn't Want His Commission...

By
Real Estate Agent with RE/MAX Compass 0524642

It's a new trend, and it makes a lot of creepy, but wise sense. The buyer's agent who doesn't want his commission. He'll represent himself and stipulate that the listing agent keep every penny. All six percent (or whatever the listing agreement says.) 

But why?

The buyer in this situation is an investor. The concept became popular when the sellers market was at its lowest (locally) in 2011. Investment companies use the (we don't want a commission) angle in hopes to shake the listing agents loyalty and fiduciary responsibility. In other words, the listing agent will double their commission if they can convince the seller to take the "deal."

What's the catch?

The simple truth is that the offer sucks. It's laced with ridiculous demands and requests. Here are two examples:

1. Seller to vacate the property 48 hours before closing. (What if the buyer doesn't close?)
2. The Title company will not receive earnest money from the buyer "until the home is approved by the buyer." (Huh?)

 

And last but not least, the offer is cash, but much lower than fair market value. This morning I received an offer for 157k on my 225k listing. As if giving me extra commission is somehow going to make the deal work. 

The investor is hoping that a greedy listing agent will somehow be able to convince their own client to take a garbage deal. I'm just calling it for what it is. If my seller is so desperate to sell then I'm certainly not taking double commission when a buyer agent is foregoing his commission. 

Talk about a Code of Ethics hearing waiting to happen!

 

It is the requirement and responsibility of the listing agent to always put their clients interest above their own. It's never a good business decision to convince your seller to take less than what the market will pay unless your seller is demanding a rapid fire sale. 

 

Posted by
Greg Nino
Realtor
RE/MAX Compass 
Direct & Text 7 days a wk: 832-298-8555 
 
 
Realtor since 2004
Mediator & Arbitrator for the TX Assoc. of Realtors
Member of the Professional Standards Committee for the TX Assoc. of Realtors
Arbitrator for the Comptroller's office for the State of TX for Arbitration of Property Tax Values

 Member of the RE/MAX Hall of Fame & Platinum Club

 

The information contained in this blog is believed to be reliable and while every effort is made to assure that the information is as accurate as possible, the author of this blog, and its comments disclaim any implied warranty or representation about it's accuracy, completeness or appropriateness for any particular purpose. All information is copywritten and the property of Greg Nino.  

Comments (19)

Laura Allen, Lake Tahoe - Truckee Real Estate for Sale TahoeLauraRealEstate.com
Coldwell Banker, Tahoe City, CA (530) 414-1260 - Tahoe City, CA
Tahoe Real Estate Agent Helping Buyers and Sellers

Greg - You've given sellers great advice to be wary of a buyer's agent that doesn't want their commission.  If it smells stinky, or too good to be true, it most likely is a bad situation!

Aug 28, 2014 01:52 AM
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate

Greg,  and the listing agent has to work with the clowns throughout the transaction. They don't perform as per the contract and they many everyone's life miserable until it closes, if it closes. I was directed by the seller to represent an investor on a short sale. The reason was $3,000 cash for keys paid to the tenant, her daughter. What a nightmare transaction that was. Not because it was a short sale, that was the easy part. The investor clients were impossible to work with. I wanted out. My duty to the seller was still there. Nowhere to run to baby! 

Aug 28, 2014 01:57 AM
Rob Marken
Bend River Realty - Bend, OR
25+ years experience in Bend

Very interesting. I have never experienced this myself but thank you for sharing your personal experience.  

Aug 28, 2014 02:00 AM
Greg Nino
RE/MAX Compass - Houston, TX
Houston, Texas

Hi Kathleen,

And that is one of the reasons we get paid. It's not for what we do, but for what we know and how we can protect and prepare a client. Thanks for the comment.

Hey Laura,

Thanks for taking the time to leave a comment! You are spot on. 

Aug 28, 2014 02:01 AM
Greg Nino
RE/MAX Compass - Houston, TX
Houston, Texas

Rob,

They'll make it your way eventually! 

Aug 28, 2014 02:01 AM
Than Maynard
Coldwell Banker Heart of Oklahoma - Purcell, OK
Broker - Licensed to List & Sell - 405-990-8862

I have seen a few of these flash through my email, but they are investors wanting to sell a property they already own. "You can set the commission on X% or as long as we net $35,000 you can have the rest."

 

Aug 28, 2014 03:30 AM
David Pylyp
RE/MAX Realty Specialists Inc., - Toronto, ON

In the Toronto ON, Canada real estate market we are firmly in multiple offer competitions on seemingly every sale.

Waving the Co operating brokers commission makes it sound enticing but gives the buyer a numerical advantage.

We simply explain that the commission is being paid as specified in the Listing Agreement and we will pay to the selling broker.   If you wish to REBATE this to your Buyer Client after taxes and deductions by your Broker you are welcome to do so.

 

#Bythewater

Reading every word

Aug 28, 2014 03:47 AM
Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

Well that's new and interesting.  Hope none of the creepsters in my area read it and try it.

Aug 28, 2014 05:18 AM
Cheryl Johnson
Highland Park, CA

Earlier this summer, we were getting loads of "wholesalers" in the local area. 

They try to tie up a property with a low all-cash offer, and then immediately flip it to another investor at a higher price (The wholesaler usually makes no repair or improvement whatsoever .... he or she just finds someone who'll pay more .. and immediately assigns the purchase contract ....)

They seem to be fizzling out again ..... I guess they discovered that finding buyers willing to pay more wasn't as easy as advertised.....

 

Aug 28, 2014 06:17 AM
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

What Cheryl said!  That's an old trick and they will also have it priced a lot higher than the current list.  It's awful the games they can play!

Aug 28, 2014 06:40 AM
Francine Viola
Coldwell Banker Evergreen Olympic Realty, Olympia WA - Olympia, WA
REALTOR®, In Tune with your Real Estate Needs

Don't you just love these "investors?!" 

Aug 28, 2014 08:20 AM
Ed Silva
Mapleridge Realty, CT 203-206-0754 - Waterbury, CT
Central CT Real Estate Broker Serving all equally

There is seldom a great opportunity that won't come back to create an issue down the road, especially where an investor is involved

Aug 28, 2014 12:21 PM
Liz and Bill Spear
RE/MAX Alliance 513.520.5305 www.LizTour.com - Mason, OH
RE/MAX Alliance Cincinnati & Dayton suburbs

Greg, I think we ran across one of these type offers years ago, and like yours, the offer was excessively low to the point of almost not being a legitimate offer. 

Aug 28, 2014 01:15 PM
Karen Feltman
Cedar Rapids/Iowa City, IA KW Legacy Group - Cedar Rapids, IA
Relocation Specialist in Cedar Rapids, Iowa

I had a buyer ask me tonight if my seller would accept $180,000 for their home priced at $228,000.  I said, you never know.  Let's put it in writing and see what they say.  That didn't interest them at all, just trying to see if I would give away the house or cut my own throat trying.  Not. gonna. happen.  I doubt that I will hear from them again.

Aug 28, 2014 05:54 PM
Ricki Eichler McCallum
CastNet Realty - Corpus Christi, TX
Broker,GRI,ABR, e-Pro, TAHS

Hi Greg,  You are so right and calling it like it is!

Aug 29, 2014 04:10 AM
Chris Ann Cleland
Long and Foster Real Estate - Gainesville, VA
Associate Broker, Bristow, VA

I love the way you think.  Putting our clients interests first, despite the enticements that nonsense investors bring around is what will keep you earning well beyond that one big commission.

Aug 31, 2014 03:43 AM
Sussie Sutton
David Tracy Real Estate - Houston, TX
David Tracy Real Estate for Buyers & Sellers

I too have not had this happen to me. It's a good heads up. It's a possibility that it would be someone trying to see if you would violate an ethics Law.

Sep 04, 2014 12:53 AM
Jordon Wheeler
The Jordon Wheeler Group - Fairburn, GA
J W Group Real Estate Sales and Service

Hey Greg,

We have to put our client's interest first place in each transaction.  That is so true.  Best of GREAT success to you always!

Sep 06, 2014 03:02 PM
Evelyn Johnston
Friends & Neighbors Real Estate - Elkhart, IN
The People You Know, Like and Trust!

That's just a weird scenario Greg, I have never heard of anything like that before.

Sep 25, 2014 12:55 PM