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Post didn’t indicate if the buyer was aware or not. Yea. Onto the next house for both
The post said there were four counter offers and the agent kept asking for the commission with each counter offer. The only way to ask for more compensation outside of the MLS is within the contract itself. Do other parts of the country do it differently?
The post said there were four counter offers and the agent kept asking for the commission with each counter offer. The only way to ask for more compensation outside of the MLS is within the contract itself. Do other parts of the country do it differently?
Commission was always outside the contract in NC.
Contract is between the principals, and that would exclude agents.
Of course, that may change with the NAR settlement.
Commission was always outside the contract in NC.
Contract is between the principals, and that would exclude agents.
Of course, that may change with the NAR settlement.
So here when there is a buyer agency agreement, even before the settlement, any additional buyer agent fees owed by the buyer were negotiated in the contract like closing costs because the agent was not paying the additional fees. So how does that work when a listing agent offers to share something and the buyer agent demands more?? How would that get negotiated outside of the contract?
The post said there were four counter offers and the agent kept asking for the commission with each counter offer. The only way to ask for more compensation outside of the MLS is within the contract itself. Do other parts of the country do it differently?
Ok. So the sellers agent wasn’t pulling a fast one or anything, assuming this post was real. Buyers agent or buyer knew the commission structure and was hoping the seller and SA compromise. I’m not really mad at the seller tbh. Seemed pretty transparent
My curiosity is:
1. Buyer went back on his word
2. BA was too scared to ask
3. BA told the buyer beforehand "don't worry about it, we can get the seller to pay the difference. They won't want us to walk for a piddly sum.
If I'm the BA, I'd probably close the deal and eat 2750, but I'm also not an agent.
So here when there is a buyer agency agreement, even before the settlement, any additional buyer agent fees owed by the buyer were negotiated in the contract like closing costs because the agent was not paying the additional fees. So how does that work when a listing agent offers to share something and the buyer agent demands more?? How would that get negotiated outside of the contract?
There is only one bucket of bucks, brought by the buyer.
"Closing Costs" can be anything supported by the lender, without specific line item labeling.
So, if the buyer will be on the hook for a few percent CC, usually mostly because of lender fees, Buyer and Seller can negotiate a CC concession in an agreeable amount.
It should NOT have to be identified as "Buyers Agent Commission" because it is merely deducted from the total CC.
I did a LOT of transactions with CC concessions, without the contract, addenda, or other documents identifying the earmarks for those costs.
Lenders just limited the percentage of allowable CC Concessions based on the amount of down payment.
I think 8% was usually the limit for conventional 80% LTV funding.
If a buyer owes their agent an additional 2.4% that is not a proffered cobroke, buyer may be able to negotiate 2.4% CC to gain the funds to get the agent paid.
Yes, that may require increasing the contract price, but that may be the price of the game after mid-July.
I don't see why the current mess revises that dynamic significantly without citing specific parameters.
And, I would ask any CD member lenders to weigh in.
There is only one bucket of bucks, brought by the buyer.
"Closing Costs" can be anything supported by the lender, without specific line item labeling.
So, if the buyer will be on the hook for a few percent CC, usually mostly because of lender fees, Buyer and Seller can negotiate a CC concession in an agreeable amount.
It should NOT have to be identified as "Buyers Agent Commission" because it is merely deducted from the total CC.
I did a LOT of transactions with CC concessions, without the contract, addenda, or other documents identifying the earmarks for those costs.
Lenders just limited the percentage of allowable CC Concessions based on the amount of down payment.
I think 8% was usually the limit for conventional 80% LTV funding.
If a buyer owes their agent an additional 2.4% that is not a proffered cobroke, buyer may be able to negotiate 2.4% CC to gain the funds to get the agent paid.
Yes, that may require increasing the contract price, but that may be the price of the game after mid-July.
I don't see why the current mess revises that dynamic significantly without citing specific parameters.
And, I would ask any CD member lenders to weigh in.
Yes, we wrote it up as a closing cost concession before too. Now we just write it up as buyer-agent compensation paid on behalf of the buyer to distinguish it from lender-allowed closing costs since Fannie said it wouldn't count toward the cap, if we are doing both BAC and closing costs and are approaching/going over the cap.
I just didn't understand how a buyer could not know about it. Since it was in each counteroffer. I didn't know if other parts of the country did something differently.
Yes, we wrote it up as a closing cost concession before too. Now we just write it up as buyer-agent compensation paid on behalf of the buyer to distinguish it from lender-allowed closing costs since Fannie said it wouldn't count toward the cap, if we are doing both BAC and closing costs and are approaching/going over the cap.
I just didn't understand how a buyer could not know about it. Since it was in each counteroffer. I didn't know if other parts of the country did something differently.
I wonder about the OP's use of the term "counteroffer."
I know in NC, and possibly in other states/regions, true "counteroffers" are rare to nonexistent.
After the initial written offer, general practice is we almost never do written, signed counteroffers that become bnding contracts when signed.
I think I never did one.
Negotiations are by email, text, phone call taking positions which are expressed in a final revised contract when it is signed.
Texts:
"Buyer will go $450,000 if the seller pays $4,000 in CC."
"Seller says $455,000 and $4,000 in CC."
"Buyer says $452,500 and $3,000 in CC."
"Great. Seller says, 'Write it up!"
Less documentation, with one final document that rules the transaction, but even here, some agents will call the back and forth "counteroffers," when of course they are not.
Here's a bit of a tangent from a local NC real estate attorney whose firm does a lot of closings in multiple locations:
Chris Mann
This is your mid-week real estate class with Chris.
You know I love you, right? I LOVE YOU SO MUCH. But, much like grandparents, there's a limit. At some point they say "Nope" and hand you back your feral child. The limit of my love for you is when I can get in trouble with the bar. Because, while I love you, I'm not going to live under a bridge, eating peas out of a can.
If a seller refuses to pay the agreed upon commission because of some dispute or for no reason at all.. We are required to still close the transaction without paying you.
The contract between buyer and seller is, in no way, contingent on the seller honoring the compensation agreement they have with the listing agent. If this happens in your transaction and I refuse your pleas to hold up the closing until it's resolved, it's because I'm not allowed to do that.
You cannot make the contract between buyer and seller contingent on your compensation. It’s just not currently allowed.
This is what your buyer agency agreement is for. In theory, you could choose to then collect your commission from the buyer. Or…. You could chase the listing agent who would then be forced to sue his own client. Those are really the options. Me holding up the deal is not in the list of options.
This all also applies to FSBOs who sign a compensation agreement directly with you as a buyer’s agent. If they refuse to honor that, the deal carries on and you can sue that seller directly.
Good luck and god speed. This doesn't happen much, but when it does. Hoo Boy. Everybody is mad at everybody. And I JUST CAN'T HANDLE THAT KIND OF AGRESSION.
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