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Need advice on unsolicited offer

Posted by bikey (My Page) on
Mon, Jun 8, 09 at 10:03

We got a call from a realtor wanting to show our house to a potential buyer. The house was not on the market and we have no listing agreement.

We showed the house to her buyers. They love it and made an offer, albeit lower than we want. The realtor wants a 5% commission out of the deal if we sell. She is clearly entitled to something (maybe not legally, but ethically), 5% seems high when there was no marketing, showing, open houses, etc.

What is the customary commission in cases like this??

Thanks,
Jeff


Follow-Up Postings:

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RE: Need advice on unsolicited offer

I would offer the agent 2%, maybe settle for 2.5%. I agree 5% is very high in your circumstances. Oh, what is your sale price, if low I might agree on 3%.


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RE: Need advice on unsolicited offer

I always charge 3% as a Buyer's Rep, which is included in any offer I/we write on a property.

I'd guess the other 2% is what the Realtor feels is fair for handling both sides of the transaction.

Real estate fees are not charged for marketing, MLS, open houses, showings, ads, websites, or anything other than getting a property sold.

(If the fees were payable for all that other stuff, you'd have to pay in advance.)

Look at is your net;
if the net is agreeable to you, "pay" the Realtor what she & her buyers have included in the offer:
the buyer is actually paying the fee; it's included in the offer.

If the net isn't agreeable, make a counter-offer on price alone & let the Realtor & the buyers figure out how they want to respond.

I wish you the best.


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RE: Need advice on unsolicited offer

Thanks. The sale price is $600K. I think $30,000 for making a half dozen phone call and handling a bit of paperwork is excessive.


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RE: Need advice on unsolicited offer

I agree that you really only care about what you are netting. But I would consider that you are repesenting yourself (I would recommend hiring a RE attorney), and would be offering to pay the agent 1/2 of the typical listing fee. In other words, around here there is a 5% fee split between the Listing Agent and the Selling Agent. I would consider yourself the listing agent and pay her 2.5% as the Selling Agent.


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RE: Need advice on unsolicited offer

"The house was not on the market and we have no listing agreement."

Your house WASN'T on the market, you DIDN'T have a listing agreement with this realtor yet she wants a commission for bringing a BUYER to you? Hmm.

The fact that you don't have an agent means this realtor doesn't have to split her commission with another agent/realty. She stands to gain from both sides of the deal.

The buyers are the ones who have a signed agreement with her. They are responsible for paying her commission. Especially since they got the house for less than what you wanted it to go for.

If you feel inclined to be generous, then give her $500.00 for doing the paperwork IF the sale goes through. If not, then at least it won't have cost you anything other than your time.


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RE: Need advice on unsolicited offer

How did the agent even know you were thinking of selling? If you don't like the price, are happy where you are why sell? Just cause someone offers you money for your home does not mean you have to take it. Seems to me there's more to this story.


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RE: Need advice on unsolicited offer

Get a real estate attorney to handle your end of the transaction. Also, since this was unsolicited would the buyers walk if you refused to pay their Realtor? Since you do not have a contract with her, and your house was not up for sale, you do not owe her a thing. The buyers owe her (if they had a contract with her).


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RE: Need advice on unsolicited offer

Yours is now a FSBO. As such, you are the listing agent, and the other is the buyer's agent. At your price point, I would offer 2.5%. Her job will entail much more than just a few phone calls. In fact, getting the offer is just the beginning. Holding the deal together is where she will earn her commission.


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RE: Need advice on unsolicited offer

This is a second home. We love the house but don't use it enough to justify the expenses. The realtor is one we had talked to a couple of years ago when we were considering selling. I am going to offer 3%. I think that is fair and consistent with the market practices in the area (near DC).


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RE: Need advice on unsolicited offer

You are in the drivers seat and as such you should control the situation and protect yourself.

You said that your house was not on the market and you have now been offered a price that was lower that you thought you could should get. It sounds like you now want to sell your house, so you should determine what the market is for your house by looking at the comps and get a good market appraisial.

As others have said, you should get a RE attorney or since are you now a FSBO I would check with discount brokers or a FSBO service that offer flat fee seller's listings and services. These companies typically charge less than 1% of the price of the home for their services. A lot of these companies charge a flat fee based on a the level of services that you choose.

The services that they offer can include the following MLS, showing services, comps and appraisials for pricing, closing assistance, etc.

Or you could go the traditional route with by hiring a seller's agent. What ever you do you need your own representation.

If you do choose to go the FSBO route I would not offer any more that the average price of Discount broker/FSBO services in your area as a commission to the selling agent.

If she really wanted to be fair she would have offered to do the deal for 2.5 to 3%, but she is being greedy and unethical. It could even be worst, she could be paid a flat or hourly fee or any combination there of by the buyers as their agent and then asking you for 5%.

Do your research, get your own representation, and make your best counter offer for both the house and seller's commission(I would offer a flat fee, but certainly no more than 1-2%). By law, she will have to submitt your counter offer to her clients.

Good Luck


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RE: Need advice on unsolicited offer

The townhouse we're trying to sell is in the Solomons area, not far from you, and we also had the buyer's agent approach us about selling, the house not being on the market.
We're giving the buyer's agent 2.5%, and with the appraisal/underwriter issues that we're having, she's earning it.
A close friend, who happens to be an REA in the immediate vicinity, told me off the record, that we should offer 1.5%. Around here in FL, we would give an agent 1.5% for a similar deal.
Time is money, and when an agent is not conducting open houses or otherwise spending time marketing a property, that agent is saving money. 3% is very generous, especially when you're talking about a home in your price range, where the commissions are sometimes slightly lower % than "standard" or flat fee.


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RE: Need advice on unsolicited offer

LOL!

More to the story indeed!

You have a *second home* that you think is worth $600,000.

You had a previous relationship of some sort with this Realtor.

You "love the home" but can't justify the expense.

Translation - you need to sell the house & the Realtor you talked to about listing it has brought you a buyer.

& you don't want to pay her the fee that you'd have to pay if you listed the house with her or any other Realtor & started all that marketing ordeal & these buyers never got to see your house because the seller hadn't signed a listing contract.

Again:

Realtors do *not* base fees on websites, open houses, driving people around, etc.

She isn't working as a babysitter or a cashier at the gas station, where she would get paid by the number of hours she puts in.

She charges for results, & she gets paid by results.

If you aren't happy with the net, make a counter-offer.


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RE: Need advice on unsolicited offer

Thanks to those who offered helpful info.

Sylvia.. you might consider learning some manners and not assuming you know exactly what the situation is. You don't.


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RE: Need advice on unsolicited offer

5% commission on a deal like this is ridiculous. We have too many realtors with too few transactions hence 5-6% commission( dime a dozen realtors like the one trying to justify commission in this thread).
In other parts of the world where there are barriers to entry in this field and only well qualified and connected people represent buyers and sellers, 1% commission is the norm.
Imagine a house sold 3-4 times in 15 years which is kinda average, 25% of the value gone to the real estate agents!! Thats too much to write a contract where in reality you are buying a house "as is".


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RE: Need advice on unsolicited offer

I can't believe the agent showed the house without having established the commission in advance with you.

I think $30,000 for making a half dozen phone call and handling a bit of paperwork is excessive.

$30,000 may be excessive, but the service provided is not phone calls and paperwork. You are paying for her ability to bring a buyer.


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RE: Need advice on unsolicited offer

darn tootin' I didn't know the situation;
you left a bunch of info out of your original post.

My point is the same as someone else said:

"the service provided is not phone calls and paperwork. You are paying for her ability to bring a buyer."

If you don't want to pay someone for her services, you shouldn't attempt to use those services.


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RE: Need advice on unsolicited offer

How does talking to a realtor a couple years ago + second unused home = a relationship with realtor and must sell.
Frankly, the information left out does not seem relevant.

It would seem that while the agent should be compensated for the ability to bring the buyer - that does not mean it has to be at the percentage the agent request.
You received some good advice, better than I could give. I will add to the other voices that if you are now interested in selling, maybe an apprasial and a little research will benefit you. I sure would not seal this deal without more knowledge. After all, the agent is working for her client to get the best deal she can for them, not you.
Hope everything goes well for you.


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RE: Need advice on unsolicited offer

If this were a "normal" listing and you had a listing agent, a 5% total commission is not unheard of in today's market which would be split between the listing and selling agents.

What has this person done to "earn" a full 5%, by bring a buyer to the table? You will still have cost, such as your own RE attorney, closing agent, etc.. This realtor is not going be looking out for you! She is only looking out for her buyers and HERSELF, and that's a fact supported by RE law.

The problem for RE agents in today's world is the amount of info. that is available to an educated buyer. In some states you can access everything a buyer needs to know about an area, neighborhood, and individual property, etc, via the internet. In others, it is a little harder and one must go the city or county records to get the info. I have seen very few RE agents that ever go to that level for their clients.

I have yet see a RE agent provide a cost/ benefit of their fee structure. I would venture to say that this agent kept the info. on your house in a file or spread sheet and waited until the "right" buyer came a long. I will bet you a dollar to donut hole, that she was not actively marketing your house for 2 years without a contract from you.

Worst thing I have even seen are TV adds, in a major metro market area, by a realtors association, trying to scare people into the fact that they are not educated enough to sell there own home. It's a real sham.

Good luck


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RE: Need advice on unsolicited offer

Bikey-"The realtor is one we had talked to a couple of years ago when we were considering selling."

Did you sign with her back then or just chat?


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RE: Need advice on unsolicited offer

Dreamgarden - we just chatted once. She dropped by the house, looked, then we didn't talk again for 2 years.

We have a contract for $600K, she gets 3% commission.


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RE: Need advice on unsolicited offer

Congratulation on your sale!

sylviatexas, I agree with bikey, your RE agent defensive aggressiveness was rude and unnecessary. The OP asked for some input, gave a little info you then deem the seller desperate and greedy.


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RE: Need advice on unsolicited offer

Congratulations!

I must say I think you were overly generous, Bikey.


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RE: Need advice on unsolicited offer

I would give her/him 2% maximum 2.5%


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