RE Ethics question

[SD Realtor]

e if you have not signed a specific representation agreement I see no problem with either situation you have posed. It would be…. polite for you to at least inform the agent you are working with that you are working with someone else. If they inquire why you can let them know. Any buyers agent can go ahead and reduce the commission they receive and rebate it back to you (yet most of thier brokers will not allow that).

It is all negotiable. I never understand why more buyers do not demand that.

[urbanrealtor]

[quote=SD Realtor]e if you have not signed a specific representation agreement I see no problem with either situation you have posed. It would be…. polite for you to at least inform the agent you are working with that you are working with someone else. If they inquire why you can let them know. Any buyers agent can go ahead and reduce the commission they receive and rebate it back to you (yet most of thier brokers will not allow that).

It is all negotiable. I never understand why more buyers do not demand that. [/quote]

Regarding working with a different agent simultaneously:

I would consider it appropriate to mention that you may or may not use them on other offers you submit.

Regarding switching agents on a particular property:

It is legal to do that but unless you explicitly broke off relations with your previous agent, i would consider it unethical. If I found out that my buyer was in escrow on a property that I had represented her on (nice hanging preposition there), then I would make an ethics complaint with the other brokers involved in the transaction.

Regarding rebating commission:
I have not ever heard of a broker not allowing an agent to rebate their own commission back. If its my money, I can do with it what I like. I did have a situation where I covered the cost of a home inspection upon closing. However, the escrow firm wanted a new addendum signed around to process it as a rebate (that is not always the case). In the interest of simplicity, I just cut a check after I got my check.

Also, SD realtor is wrong (and this is an opinion) about getting rebates back. As a buyer you really become a losing proposition when you start asking for a piece of their paycheck to be kicked back to you. Take as an example this situation: A new Prudential Cal agent starts with a 35% broker split (last I check which was a couple years ago). He keeps 35 cents of every dollar he generates. He meets a client whom he goes out with 3 times for a total of 9hrs and 60 miles. Because he is an agent he drives a 4 door car with mid range mileage. The buyer is 1st timer and does not want to spend more than 200k. Considering a buyer side gross commission is likely about 3%, that means the most he can home to make off of this is 2100 bucks over the course of several weeks. Assuming an offer is accepted, that means that means 1-2 months of work making sure the escrow moves along. Figure 100 hours of work total between calls by the nervous buyer, explaining forms, attending inspections, requesting repairs, etc. In addition there are Realtor dues that total almost 1000 per year. Assuming this account for about 5% of his business that year, that means this transaction costs him $50 in dues. Finally, there are the other business expenses. He needs, at a minimum a laptop and a cell phone with a liberal calling plan. Figure another $50 in personal expenses for this transaction (that is likely a conservative estimate). So for 2100 dollars, the agent spends about 109 hours, about 100 dollars, and drives 60 miles.

This example does not hold if the buyer finds all the properties herself, or the agent never does any of those (fairly standard) things mentioned above, or if the purchase price is significantly higher, or if the split in the agents office is better. However, my point remains that having a cheap, easy, and financially lucrative transaction is an exception rather than a rule. Yesterday I spent 11 hours with clients. I don’t get paid unless they actually close a purchase. I will really re-think how much effort I put into helping them if they start asking me to kick back money.
Again my opinion.

[urbanrealtor]

[quote=SD Realtor]e if you have not signed a specific representation agreement I see no problem with either situation you have posed. It would be…. polite for you to at least inform the agent you are working with that you are working with someone else. If they inquire why you can let them know. Any buyers agent can go ahead and reduce the commission they receive and rebate it back to you (yet most of thier brokers will not allow that).

It is all negotiable. I never understand why more buyers do not demand that. [/quote]

Regarding working with a different agent simultaneously:

I would consider it appropriate to mention that you may or may not use them on other offers you submit.

Regarding switching agents on a particular property:

It is legal to do that but unless you explicitly broke off relations with your previous agent, i would consider it unethical. If I found out that my buyer was in escrow on a property that I had represented her on (nice hanging preposition there), then I would make an ethics complaint with the other brokers involved in the transaction.

Regarding rebating commission:
I have not ever heard of a broker not allowing an agent to rebate their own commission back. If its my money, I can do with it what I like. I did have a situation where I covered the cost of a home inspection upon closing. However, the escrow firm wanted a new addendum signed around to process it as a rebate (that is not always the case). In the interest of simplicity, I just cut a check after I got my check.

Also, SD realtor is wrong (and this is an opinion) about getting rebates back. As a buyer you really become a losing proposition when you start asking for a piece of their paycheck to be kicked back to you. Take as an example this situation: A new Prudential Cal agent starts with a 35% broker split (last I check which was a couple years ago). He keeps 35 cents of every dollar he generates. He meets a client whom he goes out with 3 times for a total of 9hrs and 60 miles. Because he is an agent he drives a 4 door car with mid range mileage. The buyer is 1st timer and does not want to spend more than 200k. Considering a buyer side gross commission is likely about 3%, that means the most he can home to make off of this is 2100 bucks over the course of several weeks. Assuming an offer is accepted, that means that means 1-2 months of work making sure the escrow moves along. Figure 100 hours of work total between calls by the nervous buyer, explaining forms, attending inspections, requesting repairs, etc. In addition there are Realtor dues that total almost 1000 per year. Assuming this account for about 5% of his business that year, that means this transaction costs him $50 in dues. Finally, there are the other business expenses. He needs, at a minimum a laptop and a cell phone with a liberal calling plan. Figure another $50 in personal expenses for this transaction (that is likely a conservative estimate). So for 2100 dollars, the agent spends about 109 hours, about 100 dollars, and drives 60 miles.

This example does not hold if the buyer finds all the properties herself, or the agent never does any of those (fairly standard) things mentioned above, or if the purchase price is significantly higher, or if the split in the agents office is better. However, my point remains that having a cheap, easy, and financially lucrative transaction is an exception rather than a rule. Yesterday I spent 11 hours with clients. I don’t get paid unless they actually close a purchase. I will really re-think how much effort I put into helping them if they start asking me to kick back money.
Again my opinion.

[urbanrealtor]

[quote=SD Realtor]e if you have not signed a specific representation agreement I see no problem with either situation you have posed. It would be…. polite for you to at least inform the agent you are working with that you are working with someone else. If they inquire why you can let them know. Any buyers agent can go ahead and reduce the commission they receive and rebate it back to you (yet most of thier brokers will not allow that).

It is all negotiable. I never understand why more buyers do not demand that. [/quote]

Regarding working with a different agent simultaneously:

I would consider it appropriate to mention that you may or may not use them on other offers you submit.

Regarding switching agents on a particular property:

It is legal to do that but unless you explicitly broke off relations with your previous agent, i would consider it unethical. If I found out that my buyer was in escrow on a property that I had represented her on (nice hanging preposition there), then I would make an ethics complaint with the other brokers involved in the transaction.

Regarding rebating commission:
I have not ever heard of a broker not allowing an agent to rebate their own commission back. If its my money, I can do with it what I like. I did have a situation where I covered the cost of a home inspection upon closing. However, the escrow firm wanted a new addendum signed around to process it as a rebate (that is not always the case). In the interest of simplicity, I just cut a check after I got my check.

Also, SD realtor is wrong (and this is an opinion) about getting rebates back. As a buyer you really become a losing proposition when you start asking for a piece of their paycheck to be kicked back to you. Take as an example this situation: A new Prudential Cal agent starts with a 35% broker split (last I check which was a couple years ago). He keeps 35 cents of every dollar he generates. He meets a client whom he goes out with 3 times for a total of 9hrs and 60 miles. Because he is an agent he drives a 4 door car with mid range mileage. The buyer is 1st timer and does not want to spend more than 200k. Considering a buyer side gross commission is likely about 3%, that means the most he can home to make off of this is 2100 bucks over the course of several weeks. Assuming an offer is accepted, that means that means 1-2 months of work making sure the escrow moves along. Figure 100 hours of work total between calls by the nervous buyer, explaining forms, attending inspections, requesting repairs, etc. In addition there are Realtor dues that total almost 1000 per year. Assuming this account for about 5% of his business that year, that means this transaction costs him $50 in dues. Finally, there are the other business expenses. He needs, at a minimum a laptop and a cell phone with a liberal calling plan. Figure another $50 in personal expenses for this transaction (that is likely a conservative estimate). So for 2100 dollars, the agent spends about 109 hours, about 100 dollars, and drives 60 miles.

This example does not hold if the buyer finds all the properties herself, or the agent never does any of those (fairly standard) things mentioned above, or if the purchase price is significantly higher, or if the split in the agents office is better. However, my point remains that having a cheap, easy, and financially lucrative transaction is an exception rather than a rule. Yesterday I spent 11 hours with clients. I don’t get paid unless they actually close a purchase. I will really re-think how much effort I put into helping them if they start asking me to kick back money.
Again my opinion.

[urbanrealtor]

[quote=SD Realtor]e if you have not signed a specific representation agreement I see no problem with either situation you have posed. It would be…. polite for you to at least inform the agent you are working with that you are working with someone else. If they inquire why you can let them know. Any buyers agent can go ahead and reduce the commission they receive and rebate it back to you (yet most of thier brokers will not allow that).

It is all negotiable. I never understand why more buyers do not demand that. [/quote]

Regarding working with a different agent simultaneously:

I would consider it appropriate to mention that you may or may not use them on other offers you submit.

Regarding switching agents on a particular property:

It is legal to do that but unless you explicitly broke off relations with your previous agent, i would consider it unethical. If I found out that my buyer was in escrow on a property that I had represented her on (nice hanging preposition there), then I would make an ethics complaint with the other brokers involved in the transaction.

Regarding rebating commission:
I have not ever heard of a broker not allowing an agent to rebate their own commission back. If its my money, I can do with it what I like. I did have a situation where I covered the cost of a home inspection upon closing. However, the escrow firm wanted a new addendum signed around to process it as a rebate (that is not always the case). In the interest of simplicity, I just cut a check after I got my check.

Also, SD realtor is wrong (and this is an opinion) about getting rebates back. As a buyer you really become a losing proposition when you start asking for a piece of their paycheck to be kicked back to you. Take as an example this situation: A new Prudential Cal agent starts with a 35% broker split (last I check which was a couple years ago). He keeps 35 cents of every dollar he generates. He meets a client whom he goes out with 3 times for a total of 9hrs and 60 miles. Because he is an agent he drives a 4 door car with mid range mileage. The buyer is 1st timer and does not want to spend more than 200k. Considering a buyer side gross commission is likely about 3%, that means the most he can home to make off of this is 2100 bucks over the course of several weeks. Assuming an offer is accepted, that means that means 1-2 months of work making sure the escrow moves along. Figure 100 hours of work total between calls by the nervous buyer, explaining forms, attending inspections, requesting repairs, etc. In addition there are Realtor dues that total almost 1000 per year. Assuming this account for about 5% of his business that year, that means this transaction costs him $50 in dues. Finally, there are the other business expenses. He needs, at a minimum a laptop and a cell phone with a liberal calling plan. Figure another $50 in personal expenses for this transaction (that is likely a conservative estimate). So for 2100 dollars, the agent spends about 109 hours, about 100 dollars, and drives 60 miles.

This example does not hold if the buyer finds all the properties herself, or the agent never does any of those (fairly standard) things mentioned above, or if the purchase price is significantly higher, or if the split in the agents office is better. However, my point remains that having a cheap, easy, and financially lucrative transaction is an exception rather than a rule. Yesterday I spent 11 hours with clients. I don’t get paid unless they actually close a purchase. I will really re-think how much effort I put into helping them if they start asking me to kick back money.
Again my opinion.

[urbanrealtor]

[quote=SD Realtor]e if you have not signed a specific representation agreement I see no problem with either situation you have posed. It would be…. polite for you to at least inform the agent you are working with that you are working with someone else. If they inquire why you can let them know. Any buyers agent can go ahead and reduce the commission they receive and rebate it back to you (yet most of thier brokers will not allow that).

It is all negotiable. I never understand why more buyers do not demand that. [/quote]

Regarding working with a different agent simultaneously:

I would consider it appropriate to mention that you may or may not use them on other offers you submit.

Regarding switching agents on a particular property:

It is legal to do that but unless you explicitly broke off relations with your previous agent, i would consider it unethical. If I found out that my buyer was in escrow on a property that I had represented her on (nice hanging preposition there), then I would make an ethics complaint with the other brokers involved in the transaction.

Regarding rebating commission:
I have not ever heard of a broker not allowing an agent to rebate their own commission back. If its my money, I can do with it what I like. I did have a situation where I covered the cost of a home inspection upon closing. However, the escrow firm wanted a new addendum signed around to process it as a rebate (that is not always the case). In the interest of simplicity, I just cut a check after I got my check.

Also, SD realtor is wrong (and this is an opinion) about getting rebates back. As a buyer you really become a losing proposition when you start asking for a piece of their paycheck to be kicked back to you. Take as an example this situation: A new Prudential Cal agent starts with a 35% broker split (last I check which was a couple years ago). He keeps 35 cents of every dollar he generates. He meets a client whom he goes out with 3 times for a total of 9hrs and 60 miles. Because he is an agent he drives a 4 door car with mid range mileage. The buyer is 1st timer and does not want to spend more than 200k. Considering a buyer side gross commission is likely about 3%, that means the most he can home to make off of this is 2100 bucks over the course of several weeks. Assuming an offer is accepted, that means that means 1-2 months of work making sure the escrow moves along. Figure 100 hours of work total between calls by the nervous buyer, explaining forms, attending inspections, requesting repairs, etc. In addition there are Realtor dues that total almost 1000 per year. Assuming this account for about 5% of his business that year, that means this transaction costs him $50 in dues. Finally, there are the other business expenses. He needs, at a minimum a laptop and a cell phone with a liberal calling plan. Figure another $50 in personal expenses for this transaction (that is likely a conservative estimate). So for 2100 dollars, the agent spends about 109 hours, about 100 dollars, and drives 60 miles.

This example does not hold if the buyer finds all the properties herself, or the agent never does any of those (fairly standard) things mentioned above, or if the purchase price is significantly higher, or if the split in the agents office is better. However, my point remains that having a cheap, easy, and financially lucrative transaction is an exception rather than a rule. Yesterday I spent 11 hours with clients. I don’t get paid unless they actually close a purchase. I will really re-think how much effort I put into helping them if they start asking me to kick back money.
Again my opinion.

[no_such_reality]

When you were low-bid on the house the first time around what did you tell the agent? Are you a serious buyer? Have you actively been pursuing properies with the agent with a purpose to buy?

As for obligations, there are none to inform you of the status of a property weeks later of which you longer have an offer on.

“So, I wasn’t actually harmed this time.”

To be frank, that sentence strikes me as you’re looking for a reason to find fault.

To be doubly frank, the agent didn’t call you to put a bid on the house you previously had low bid on so basically the agent didn’t want to waste more time on a low bid with in their mind little chance of getting accepted. If you had them on paid retaining it might be a little different, but otherwise, you’re burning their cash and they don’t think you’ll close the deal.

[no_such_reality]

When you were low-bid on the house the first time around what did you tell the agent? Are you a serious buyer? Have you actively been pursuing properies with the agent with a purpose to buy?

As for obligations, there are none to inform you of the status of a property weeks later of which you longer have an offer on.

“So, I wasn’t actually harmed this time.”

To be frank, that sentence strikes me as you’re looking for a reason to find fault.

To be doubly frank, the agent didn’t call you to put a bid on the house you previously had low bid on so basically the agent didn’t want to waste more time on a low bid with in their mind little chance of getting accepted. If you had them on paid retaining it might be a little different, but otherwise, you’re burning their cash and they don’t think you’ll close the deal.

[no_such_reality]

When you were low-bid on the house the first time around what did you tell the agent? Are you a serious buyer? Have you actively been pursuing properies with the agent with a purpose to buy?

As for obligations, there are none to inform you of the status of a property weeks later of which you longer have an offer on.

“So, I wasn’t actually harmed this time.”

To be frank, that sentence strikes me as you’re looking for a reason to find fault.

To be doubly frank, the agent didn’t call you to put a bid on the house you previously had low bid on so basically the agent didn’t want to waste more time on a low bid with in their mind little chance of getting accepted. If you had them on paid retaining it might be a little different, but otherwise, you’re burning their cash and they don’t think you’ll close the deal.

[no_such_reality]

When you were low-bid on the house the first time around what did you tell the agent? Are you a serious buyer? Have you actively been pursuing properies with the agent with a purpose to buy?

As for obligations, there are none to inform you of the status of a property weeks later of which you longer have an offer on.

“So, I wasn’t actually harmed this time.”

To be frank, that sentence strikes me as you’re looking for a reason to find fault.

To be doubly frank, the agent didn’t call you to put a bid on the house you previously had low bid on so basically the agent didn’t want to waste more time on a low bid with in their mind little chance of getting accepted. If you had them on paid retaining it might be a little different, but otherwise, you’re burning their cash and they don’t think you’ll close the deal.

[no_such_reality]

When you were low-bid on the house the first time around what did you tell the agent? Are you a serious buyer? Have you actively been pursuing properies with the agent with a purpose to buy?

As for obligations, there are none to inform you of the status of a property weeks later of which you longer have an offer on.

“So, I wasn’t actually harmed this time.”

To be frank, that sentence strikes me as you’re looking for a reason to find fault.

To be doubly frank, the agent didn’t call you to put a bid on the house you previously had low bid on so basically the agent didn’t want to waste more time on a low bid with in their mind little chance of getting accepted. If you had them on paid retaining it might be a little different, but otherwise, you’re burning their cash and they don’t think you’ll close the deal.

[SD Realtor]

Urban thank you for the correction. E if the home you would be writing an offer on was procurred for you by the original agent then yes any offer you would ask another agent to write subsequently could pose a problem. The agent who procurred the home originally for you could petition for the commission. This is not just true for that home but even other homes that you may have received from that agent in auto MLS emails and such. Thus it would be best to ask your original agent to send you a cancellation of contract even though there is nothing formally in ink between the two of you.

As far as rebates go urbanrealtor you missed the point. Yes a broker doesn’t care what thier own agent does with thier cut. As you know all commissions are paid to brokers not agents. Brokers then give cuts. In my post I said broker but it sounds like I should have been more explicit as you seemed to disect it a bit more then others would have. In large brokerages I don’t know of any brokers who will give up any of thier own cut or the corporate cut, or the offices cut. Thus in your model you are limiting the rebate to a fraction of the 35% of what the Prudential Agent makes. Hmm… that doesn’t sound like much of a deal to me. Obviously this is not the model other providers use. Places like Redfin or smaller independents do not follow any such practice at all and offer much more robust rebates for alternative service models.

That is one of the main problems working with a large brokerage is that there are many hands in the commission pie. Thus buyers are limited because of that. Similarly agents are biased as to working harder for larger sales as opposed to smaller sales because as you stated, it really is not worth your time is it? I highly doubt that any broker in any large brokerage will accept a reduction in THIER commission. Perhaps the brokers you work for have been overly generous I guess. So in your example above if someone wanted say a 50% commission split how would that work? Your Prudential agent certainly would not work for them for free correct? Thus would his broker accept a reduction in his money? Perhaps for a very large purchase I can see it but for run of the mill stuff I highly doubt it. Show me a Prudential Broker who will accept that and I will gladly admit I am wrong. Alternately I guess you work with very benevolent brokers.

[SD Realtor]

Urban thank you for the correction. E if the home you would be writing an offer on was procurred for you by the original agent then yes any offer you would ask another agent to write subsequently could pose a problem. The agent who procurred the home originally for you could petition for the commission. This is not just true for that home but even other homes that you may have received from that agent in auto MLS emails and such. Thus it would be best to ask your original agent to send you a cancellation of contract even though there is nothing formally in ink between the two of you.

As far as rebates go urbanrealtor you missed the point. Yes a broker doesn’t care what thier own agent does with thier cut. As you know all commissions are paid to brokers not agents. Brokers then give cuts. In my post I said broker but it sounds like I should have been more explicit as you seemed to disect it a bit more then others would have. In large brokerages I don’t know of any brokers who will give up any of thier own cut or the corporate cut, or the offices cut. Thus in your model you are limiting the rebate to a fraction of the 35% of what the Prudential Agent makes. Hmm… that doesn’t sound like much of a deal to me. Obviously this is not the model other providers use. Places like Redfin or smaller independents do not follow any such practice at all and offer much more robust rebates for alternative service models.

That is one of the main problems working with a large brokerage is that there are many hands in the commission pie. Thus buyers are limited because of that. Similarly agents are biased as to working harder for larger sales as opposed to smaller sales because as you stated, it really is not worth your time is it? I highly doubt that any broker in any large brokerage will accept a reduction in THIER commission. Perhaps the brokers you work for have been overly generous I guess. So in your example above if someone wanted say a 50% commission split how would that work? Your Prudential agent certainly would not work for them for free correct? Thus would his broker accept a reduction in his money? Perhaps for a very large purchase I can see it but for run of the mill stuff I highly doubt it. Show me a Prudential Broker who will accept that and I will gladly admit I am wrong. Alternately I guess you work with very benevolent brokers.

[SD Realtor]

Urban thank you for the correction. E if the home you would be writing an offer on was procurred for you by the original agent then yes any offer you would ask another agent to write subsequently could pose a problem. The agent who procurred the home originally for you could petition for the commission. This is not just true for that home but even other homes that you may have received from that agent in auto MLS emails and such. Thus it would be best to ask your original agent to send you a cancellation of contract even though there is nothing formally in ink between the two of you.

As far as rebates go urbanrealtor you missed the point. Yes a broker doesn’t care what thier own agent does with thier cut. As you know all commissions are paid to brokers not agents. Brokers then give cuts. In my post I said broker but it sounds like I should have been more explicit as you seemed to disect it a bit more then others would have. In large brokerages I don’t know of any brokers who will give up any of thier own cut or the corporate cut, or the offices cut. Thus in your model you are limiting the rebate to a fraction of the 35% of what the Prudential Agent makes. Hmm… that doesn’t sound like much of a deal to me. Obviously this is not the model other providers use. Places like Redfin or smaller independents do not follow any such practice at all and offer much more robust rebates for alternative service models.

That is one of the main problems working with a large brokerage is that there are many hands in the commission pie. Thus buyers are limited because of that. Similarly agents are biased as to working harder for larger sales as opposed to smaller sales because as you stated, it really is not worth your time is it? I highly doubt that any broker in any large brokerage will accept a reduction in THIER commission. Perhaps the brokers you work for have been overly generous I guess. So in your example above if someone wanted say a 50% commission split how would that work? Your Prudential agent certainly would not work for them for free correct? Thus would his broker accept a reduction in his money? Perhaps for a very large purchase I can see it but for run of the mill stuff I highly doubt it. Show me a Prudential Broker who will accept that and I will gladly admit I am wrong. Alternately I guess you work with very benevolent brokers.

[SD Realtor]

Urban thank you for the correction. E if the home you would be writing an offer on was procurred for you by the original agent then yes any offer you would ask another agent to write subsequently could pose a problem. The agent who procurred the home originally for you could petition for the commission. This is not just true for that home but even other homes that you may have received from that agent in auto MLS emails and such. Thus it would be best to ask your original agent to send you a cancellation of contract even though there is nothing formally in ink between the two of you.

As far as rebates go urbanrealtor you missed the point. Yes a broker doesn’t care what thier own agent does with thier cut. As you know all commissions are paid to brokers not agents. Brokers then give cuts. In my post I said broker but it sounds like I should have been more explicit as you seemed to disect it a bit more then others would have. In large brokerages I don’t know of any brokers who will give up any of thier own cut or the corporate cut, or the offices cut. Thus in your model you are limiting the rebate to a fraction of the 35% of what the Prudential Agent makes. Hmm… that doesn’t sound like much of a deal to me. Obviously this is not the model other providers use. Places like Redfin or smaller independents do not follow any such practice at all and offer much more robust rebates for alternative service models.

That is one of the main problems working with a large brokerage is that there are many hands in the commission pie. Thus buyers are limited because of that. Similarly agents are biased as to working harder for larger sales as opposed to smaller sales because as you stated, it really is not worth your time is it? I highly doubt that any broker in any large brokerage will accept a reduction in THIER commission. Perhaps the brokers you work for have been overly generous I guess. So in your example above if someone wanted say a 50% commission split how would that work? Your Prudential agent certainly would not work for them for free correct? Thus would his broker accept a reduction in his money? Perhaps for a very large purchase I can see it but for run of the mill stuff I highly doubt it. Show me a Prudential Broker who will accept that and I will gladly admit I am wrong. Alternately I guess you work with very benevolent brokers.

[Author]

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