Realtor commission issue- what should I do? - Posted by dannj

Posted by Edwin on March 13, 2009 at 23:51:46:

That sure is an unfortunate chain of events, but I don’t see where either you or your father did anything wrong. Awkward, yes.

Realtor commission issue- what should I do? - Posted by dannj

Posted by dannj on March 13, 2009 at 12:46:07:

Well I think I got myself in a little jam here. A Realtor won’t be getting his commission because of my screw up.

So, I’ve been talking to this Realtor for some time now. He even showed me some houses, although I haven’t seen anything worth buying. One day I specifically asked about this one REO house. I wanted to get inside so he called the listing agent only to find it was under contract. Oh well I thought.

All the while I’ve been talking investment properties with my father for some time. He and I planned on partnering up on a fixer upper. He knew about my Realtor and even met him once briefly. Anyway, my father came acress the same REO house on his own and called the listing agent to find out the last offer fell through and it was back on the market now. My father set up the showing with the listing agent and I met them both at the house. Long story short we got the house and the listing agent got the commission.

My agent doesn’t know about this yet. Has this ever happened to you? What should I do to preserve the relationship I have with my Realtor? Does he even have a right to be angry?
Thanks

Re: Realtor commission issue- what should I do? - Posted by dannj

Posted by dannj on March 16, 2009 at 07:55:01:

Great advice everybody. Thanks for your many perspectives on this issue. I’ll be having ‘the talk’ with my Realtor in the very near future. Hopefully he doesn’t take it personally and can see another viewpoint aside from his own. If we were to give him a finders fee or gift cert at a nice restaurant is it possible to include it on the HUD-1 to make it deductible? I suppose my lawyer would know how to do this.

Thanks again.

I do like the idea of using him as the listing agent in the future, although my father and I will probably sell as lease/option or contract for deed to avoid a tax beating (>12mos). In that case I understand its typical to pay the realtor for finding a tenant which is normally one month’s rent.

Loyalty… it goes both ways… - Posted by JT-IN

Posted by JT-IN on March 14, 2009 at 21:04:38:

Let’s analyze this loyalty thing to “an agent”. That sounds great, in theory. Yes, it would be great if you could deal with one agent and have all considerations both coming and going. But it is not reality.

Let’s now turn it around. Let’s presume that this same agent comes by a slam dunk deal; 30-40-50K of profit is a lock. Does that agent call you first…? Probably not. That agent will call their best friend, their sister, their cousin, and eventually when none of them can perform, and maybe they have run it past a few other investors, then they call you. I learned a long time ago what loyalty is in this business… Loyalty is when you do what you have to do in order to secure a payday. That is loyalty to YOURSELF. In this case Dad did what he had to do to make the deal work, hence being loyal to him and you. That is all you have to know, really. Nothing more.

Harsh…? Yes. Reality…? Yes. Successful…? Yes, if you make it so. Case closed.

One more thing I like about CREonline - Posted by Ed in Idaho

Posted by Ed in Idaho on March 14, 2009 at 13:08:14:

Just when you think you know everything about a certain situation because you read a paragraph and assumed a few things…along come a bunch of answers and scenarios that totally change the way it looks to you. Now I think I take back what I said earlier…maybe.

But kidding aside, the statement about dealing only with the listing agent on REO properties sounds like a gem! Thanks JT , Natalie and others!

furthermore… - Posted by Natalie-VA

Posted by Natalie-VA on March 14, 2009 at 11:03:48:

Also, dannj, you would only owe your agent a commission if you had signed an exclusive agreement for them to represent you. It doesn’t even sound like your agent found that house for you in the first place. YOU brought it to HIS attention. The only person your agent has to be angry with is himself.

Okay, I’m done now.

–Natalie

Re: Realtor commission issue- what should I do? - Posted by Natalie-VA

Posted by Natalie-VA on March 14, 2009 at 11:00:34:

No jam here. Sounds like your father did a better job than your agent. If you’ve got a client interested in a property that’s already gone under contract, you should follow the deal until it’s done. Your agent didn’t.

–Natalie

Always deal w/listing agent on REO - Posted by JT-IN

Posted by JT-IN on March 14, 2009 at 07:26:22:

It is the best way to end up buying the REO property. Otherwise, you end up jacking around with other agents, and the listng agent who controls what is submitted to the REO company, and often times know what they will accept, is exactly the person that you should be dealing with.

Adding another agent in the mix is simply an unneccessary compoenent that will lead to issues that you don’t need. If the other agent was really on the ball, he/she would have IMMEDIATELY brought to your attention that the property was back on the mkt… it didn’t happen, so therefore you have nothing to be appologetic about.

Re: Realtor commission issue- what should I do? - Posted by Ed in Idaho

Posted by Ed in Idaho on March 14, 2009 at 07:17:45:

Does seem like some sort of ‘show of appreciation’ is in order here…along with the explanation. Maybe a gift certificate for a VERY nice dinner for two or something along that line.

Also, if this ‘fixer-upper’ is going to be sold soon, who might the listing agent be for that? Who could you possibly use…hmmmmmm…???

fess up - Posted by ken in sc

Posted by ken in sc on March 13, 2009 at 14:26:47:

Honesty is the best policy. If he finds out another way, your relationship is done. However, if you tell him just like you told us, a good agent will forgive and try and sell you the next one.

Re: One more thing I like about CREonline - Posted by Natalie-VA

Posted by Natalie-VA on March 14, 2009 at 14:37:11:

Hi Ed,

Although the agent didn’t earn a commission here, IMO, I think you gave good advice to offer up dinner or give him the listing when the time comes. Nothing wrong with that. I don’t like burning bridges. On the other hand, we have very limited info…hopefully it’s a good agent who made a mistake instead of a bad agent. I think the reaction he gets from the agent will be key. If the agent behaves unprofessionally when they find out about the deal, they can kiss the future business goodbye.

–Natalie