What do I owe this real estate agent?
March 20, 2015 12:43 PM Subscribe
Do you have to involve a real estate agent in a deal if you didn't sign a contract with them, but they showed you the house?
My partner and I are staying at a cottage about an hour of our city, so he can be closer to a temporary job he has for the month. While up here, I was browsing online for homes for sale, and found one on I loved a website where people sell their homes without a real estate agent.
I had contacted an agent at a major real estate company to inquire about a different property. She contacted me, and in the course of our conversation, I told her about this property and a few other other properties I liked. She called them and set up an appointment for us. (Their number was on the website.) Yesterday my partner and I met her there (a 20-minute drive for her) and we all saw the home.
What do I owe this real estate agent if we want to buy the house? Does she have to be part of the deal (and commission)? I haven't done much real estate stuff in my life and didn't quite realize that the site we were looking at was for people wanting to sell and willing to sell without agents or commissions. We don't have a contract with her. But I feel a bit guilty about the thought of cutting her out (my partner doesn't/wouldn't feel guilty). Is this a normal part of being a real estate agent, that sometimes things like this happen where you do a bit of work and it comes to nothing, or is there an implied contract between her and I?
My partner and I are staying at a cottage about an hour of our city, so he can be closer to a temporary job he has for the month. While up here, I was browsing online for homes for sale, and found one on I loved a website where people sell their homes without a real estate agent.
I had contacted an agent at a major real estate company to inquire about a different property. She contacted me, and in the course of our conversation, I told her about this property and a few other other properties I liked. She called them and set up an appointment for us. (Their number was on the website.) Yesterday my partner and I met her there (a 20-minute drive for her) and we all saw the home.
What do I owe this real estate agent if we want to buy the house? Does she have to be part of the deal (and commission)? I haven't done much real estate stuff in my life and didn't quite realize that the site we were looking at was for people wanting to sell and willing to sell without agents or commissions. We don't have a contract with her. But I feel a bit guilty about the thought of cutting her out (my partner doesn't/wouldn't feel guilty). Is this a normal part of being a real estate agent, that sometimes things like this happen where you do a bit of work and it comes to nothing, or is there an implied contract between her and I?
Response by poster: Thanks, Zennie. It's exactly the etiquette I'm curious about. I naturally feel indebted to people and I'm not sure whether it's appropriate in this case. She didn't show us any other homes apart from that one. (We are not currently homeowners, btw...)
posted by Clotilde at 1:01 PM on March 20, 2015
posted by Clotilde at 1:01 PM on March 20, 2015
You don't owe her anything. Agents don't expect every interaction to result in a payment of some type. Her motivation was to build a relationship with you, for a future sale down the road or by you referring her to your friends if you had a positive experience.
posted by Diddly at 1:02 PM on March 20, 2015 [3 favorites]
posted by Diddly at 1:02 PM on March 20, 2015 [3 favorites]
If you use this agent for the sale -- have them write an offer, coordinate inspection times, coordinate with the listing agent, etc., -- then yes, you would owe them commission. Just acting as the contact and key opener, maybe not.
posted by amanda at 1:21 PM on March 20, 2015
posted by amanda at 1:21 PM on March 20, 2015
Response by poster: Yes, the idea is that we'd want to deal with the sellers directly from now on. They didn't really want to deal with an agent, and we really liked and connected with the couple selling it. The agent was kind of aggressive, which was discomforting, especially as they're an older couple selling their family home.
posted by Clotilde at 1:35 PM on March 20, 2015
posted by Clotilde at 1:35 PM on March 20, 2015
Is this a normal part of being a real estate agent, that sometimes things like this happen where you do a bit of work and it comes to nothing, or is there an implied contract between her and I?
It is a normal part of being a real estate agent. There is no implied contract.
Yes, you are potentially burning a bridge here. You are potentially offending her if you make the deal without involving her. But it isn't illegal or immoral.
However, sometimes people have a lawyer or real estate agent help with just some portion of the transaction for a smaller fee than is typical from a commission. It is relatively common for a FSBO (for sale by owner) contract to get the once over by a lawyer or a real estate agent to make sure the contract is solid. Since you apparently haven't already written a contract for the house, do not rule out the possibility that she might still be useful to you. It's not as much money for her as getting a percentage of the sale, but it's also less work.
If you choose to cut her out entirely, there are other ways you can make it up to her, like referring business to her. But your update implies you didn't much like her. In which case, perhaps cutting her out will help clue her that she has room for improvement. If you don't like her, you don't have to deal with her.
posted by Michele in California at 1:38 PM on March 20, 2015
It is a normal part of being a real estate agent. There is no implied contract.
Yes, you are potentially burning a bridge here. You are potentially offending her if you make the deal without involving her. But it isn't illegal or immoral.
However, sometimes people have a lawyer or real estate agent help with just some portion of the transaction for a smaller fee than is typical from a commission. It is relatively common for a FSBO (for sale by owner) contract to get the once over by a lawyer or a real estate agent to make sure the contract is solid. Since you apparently haven't already written a contract for the house, do not rule out the possibility that she might still be useful to you. It's not as much money for her as getting a percentage of the sale, but it's also less work.
If you choose to cut her out entirely, there are other ways you can make it up to her, like referring business to her. But your update implies you didn't much like her. In which case, perhaps cutting her out will help clue her that she has room for improvement. If you don't like her, you don't have to deal with her.
posted by Michele in California at 1:38 PM on March 20, 2015
If I cut her out and bought the house I might send a card with something nice (bottle of wine? dinner gift certificate? fancy chocolates?) to say thanks.
posted by pseudostrabismus at 1:49 PM on March 20, 2015 [1 favorite]
posted by pseudostrabismus at 1:49 PM on March 20, 2015 [1 favorite]
Is this a normal part of being a real estate agent, that sometimes things like this happen where you do a bit of work and it comes to nothing, or is there an implied contract between her and I?
Honestly, I think both in a way. Legally you are in the clear (I think, not being in real estate) and probably in terms of industry norms and expectations too. Real estate agents have to scramble for business and a big part of that is scrambling for business that doesn't pan out. Any agent has to be able to deal with people dropping them out of the process.
But, morally (or ethically maybe) as an adult member of society trying to "play fair", I think you're in more of a quandary. She provided you a service worth a few hours of time and it's something that should be compensated. The way the industry is structured doesn't make it easy to compensate an agent for just a little bit of work without going for a full commission though -- it's a dilemma. I almost see why agent commissions are so very high relative to the work in one average sale, because it is so easy for them to get nothing for a lot of other work. Hate the system, not the agents I say.
But what to do. In this boat if I were to proceed with this house I would use the agent as a formal buyer's agent (or whatever it's called in your area) and let them reap the commission from this sale. Just because the SELLER doesn't want to use an agent doesn't mean you can't. I would contract with the seller for an appropriate commission for the agent, maybe 3% or whatever is normal now. I think that's the right thing to do to respect her time and effort as a business professional. If you choose to proceed with another house, or no house altogether, I would stop using her "help" if you don't want to involve her in the final contract. That seems fair and above-board to me.
Oh, upon reading your update, I really would never abandon my agent to negotiate with sellers directly especially if they were pushing for that, and it's not because I'm suspicious and untrusting. Big transactions should be managed at arm's length and you're not even local.
posted by dness2 at 1:49 PM on March 20, 2015
Honestly, I think both in a way. Legally you are in the clear (I think, not being in real estate) and probably in terms of industry norms and expectations too. Real estate agents have to scramble for business and a big part of that is scrambling for business that doesn't pan out. Any agent has to be able to deal with people dropping them out of the process.
But, morally (or ethically maybe) as an adult member of society trying to "play fair", I think you're in more of a quandary. She provided you a service worth a few hours of time and it's something that should be compensated. The way the industry is structured doesn't make it easy to compensate an agent for just a little bit of work without going for a full commission though -- it's a dilemma. I almost see why agent commissions are so very high relative to the work in one average sale, because it is so easy for them to get nothing for a lot of other work. Hate the system, not the agents I say.
But what to do. In this boat if I were to proceed with this house I would use the agent as a formal buyer's agent (or whatever it's called in your area) and let them reap the commission from this sale. Just because the SELLER doesn't want to use an agent doesn't mean you can't. I would contract with the seller for an appropriate commission for the agent, maybe 3% or whatever is normal now. I think that's the right thing to do to respect her time and effort as a business professional. If you choose to proceed with another house, or no house altogether, I would stop using her "help" if you don't want to involve her in the final contract. That seems fair and above-board to me.
Oh, upon reading your update, I really would never abandon my agent to negotiate with sellers directly especially if they were pushing for that, and it's not because I'm suspicious and untrusting. Big transactions should be managed at arm's length and you're not even local.
posted by dness2 at 1:49 PM on March 20, 2015
Response by poster: They weren't pushing, dness2. They just didn't want to deal with an agent on their end. I have bought a house before (many, many years ago) and that agent really was someone I felt an obligation to and much gratitude towards; he showed me and my ex many houses, helped with all aspects of things, was very involved and we were very grateful. I never would have not concluded the sale with him. But this situation seems a bit different.
posted by Clotilde at 2:04 PM on March 20, 2015
posted by Clotilde at 2:04 PM on March 20, 2015
Asking a FSBO seller to pay for a buyer's agent is probably not going to go over well. The whole reason they are FSBO is to cut out the commission. It depends a lot on the local market, of course, but if the sale is at all competitive then I wouldn't get your hopes up you can do this. Put it this way, if they won't pay for their own representation, why would they pay for yours - unless the market is stagnant and they have no other options.
My parents sold a house FSBO and the buyers paid their own agent. It was unusual but my parents said they wouldn't pay commission to agents, and the buyers wanted the house. It was their call how to square things with their agent and I guess they saw enough value to pay her directly.
I bought and sold a house FSBO (though a while ago). There was one interested party who had an agent, and the agent called me up to set up an appointment. I said they were welcome to come look, but that I wouldn't pay a buyer's agent. I got an accepted another offer before they could make one, so I don't know how it would have worked out, but I didn't see any reason that I would need to be on the hook for that.
posted by handful of rain at 2:18 PM on March 20, 2015 [1 favorite]
My parents sold a house FSBO and the buyers paid their own agent. It was unusual but my parents said they wouldn't pay commission to agents, and the buyers wanted the house. It was their call how to square things with their agent and I guess they saw enough value to pay her directly.
I bought and sold a house FSBO (though a while ago). There was one interested party who had an agent, and the agent called me up to set up an appointment. I said they were welcome to come look, but that I wouldn't pay a buyer's agent. I got an accepted another offer before they could make one, so I don't know how it would have worked out, but I didn't see any reason that I would need to be on the hook for that.
posted by handful of rain at 2:18 PM on March 20, 2015 [1 favorite]
Response by poster: I guess my instinct at this point is to thank her in some way (present, monetary) for the 2 or so hours she spent on us, but not to involve her in the deal.
posted by Clotilde at 2:51 PM on March 20, 2015
posted by Clotilde at 2:51 PM on March 20, 2015
To extend my answer a bit, you committed a faux pas if you accepted her service with no intent to involve her in any deal, but that does not entitle her to money. Considering you hadn't met her and didn't like her style when you did, you are entitled to say, "no thank you, we think this business relationship is not a fit." No bottle of wine necessary, unless you want to. Next time you know better.
posted by zennie at 3:09 PM on March 20, 2015
posted by zennie at 3:09 PM on March 20, 2015
And to extend my answer too, yeah I kind of agree with zennie on the faux pas. And I totally understand why you feel conflicted and I respect that instinct. I would still be cautious about dealing with a FSBO without help, especially if I wasn't local to the area, but I get what you are saying about the "fit" of that particular agent.
What about, if this house negotiation works out, asking that agent for a recommendation/referral to a real estate lawyer in the area. You will need one anyway, it will support her professional network, and you could have the lawyer include $100-$200 in the contract as a finder's fee (or whatever). That might be an elegant solution.
posted by dness2 at 3:19 PM on March 20, 2015 [1 favorite]
What about, if this house negotiation works out, asking that agent for a recommendation/referral to a real estate lawyer in the area. You will need one anyway, it will support her professional network, and you could have the lawyer include $100-$200 in the contract as a finder's fee (or whatever). That might be an elegant solution.
posted by dness2 at 3:19 PM on March 20, 2015 [1 favorite]
To extend my answer a bit, you committed a faux pas if you accepted her service with no intent to involve her in any deal
That does not appear to be the case here. It sounds like the agent was trying to insert herself. The OP did not realize this was a FSBO website. The agent likely did. The agent is a professional and should be a lot more savvy than the OP about the real estate industry.
Frankly, it sounds like the agent is somewhat inappropriately pushy and trying to insert herself. I get it that sales people need to push, etc, but, no, this was not the OP trying to get free service and then bail on the agent. More like the agent trying to force the issue.
I think you (the OP) are beanplating this way early anyway. There is no guarantee you will get this house. It sounds like you haven't even made an offer yet. You could make an offer and it could fall through.
You should, perhaps, be thinking more about whether or not you actually liked this agent and whether or not you would want to work with this agent if you wind up needing additional service in the event that this deal fails to go through. If this deal does not pan out, do you want to work this agent or find someone else? That's a more salient question. You are not about to have the keys to this house handed to you. You are a very long way off from closing on any house, much less this specific house.
So if you don't come to terms with this couple, do you want to call this agent back? Or was she too abrasive and you would rather find someone else? That's something you should think about.
best of luck.
posted by Michele in California at 3:22 PM on March 20, 2015 [1 favorite]
That does not appear to be the case here. It sounds like the agent was trying to insert herself. The OP did not realize this was a FSBO website. The agent likely did. The agent is a professional and should be a lot more savvy than the OP about the real estate industry.
Frankly, it sounds like the agent is somewhat inappropriately pushy and trying to insert herself. I get it that sales people need to push, etc, but, no, this was not the OP trying to get free service and then bail on the agent. More like the agent trying to force the issue.
I think you (the OP) are beanplating this way early anyway. There is no guarantee you will get this house. It sounds like you haven't even made an offer yet. You could make an offer and it could fall through.
You should, perhaps, be thinking more about whether or not you actually liked this agent and whether or not you would want to work with this agent if you wind up needing additional service in the event that this deal fails to go through. If this deal does not pan out, do you want to work this agent or find someone else? That's a more salient question. You are not about to have the keys to this house handed to you. You are a very long way off from closing on any house, much less this specific house.
So if you don't come to terms with this couple, do you want to call this agent back? Or was she too abrasive and you would rather find someone else? That's something you should think about.
best of luck.
posted by Michele in California at 3:22 PM on March 20, 2015 [1 favorite]
Just my 2c: no, you don't owe the agent anything. And it wasn't a faux pas. The agent was basically 'volunteering' in hopes that you'd like her and engage her with a contract etc. it doesn't sound like that's gonna happen - but that's the real-estate biz. If you think about it and decide that yes, you'd like an agent to hold your hand, then maybe you should 'shop around' for one. It's pretty easy to find an agent: just tell friends, co-workers, family, etc that you're looking for one. In my experience, almost everyone has an agent they'd like to recommend to you. It's almost like something out of The Twilight Zone.
posted by doctor tough love at 3:56 PM on March 20, 2015 [1 favorite]
posted by doctor tough love at 3:56 PM on March 20, 2015 [1 favorite]
This thread is closed to new comments.
A good agent is worth the commission though.
posted by zennie at 12:55 PM on March 20, 2015 [1 favorite]