Did we do a realtor-rible thing to our realtor?
March 30, 2018 7:15 AM Subscribe
We've been looking for a house for about three months and we kinda dumped our realtor, how awful are we?
Me and my SO have been looking at houses for about three months. We've looked about 3-5 houses a week for the duration of that time. We made two offers that did not work out, one because another person offered first and another because the owner would not come down on price - so early on in the process. Our friend is a contractor and tipped us off to a person he was working for that was moving.
Sans realtor, we contacted him and toured the house. Everything looked great so we made an offer. He gave us a price and said that if we wanted to involve the realtor the price would go up ~5% to cover their expenses. He preferred to do things through real-estate attorneys and we are OK going that route.
So after ghosting the realtor for a few days, we wrote her a letter saying she's done a great job so far, this was a fluke, and realize she spent time on us so if this house sale goes through we will cut her a check for $750 for her time. It has been a day and a half and we haven't gotten a response, so I'm thinking that bridge might be burned. I fully realize that she would make significantly more money if she represented us, but it doesn't feel fully justified when we contacted the owner ourselves.
So the question is, how awful of a thing did we do? For reference, the average house value around here is ~$130,000
Me and my SO have been looking at houses for about three months. We've looked about 3-5 houses a week for the duration of that time. We made two offers that did not work out, one because another person offered first and another because the owner would not come down on price - so early on in the process. Our friend is a contractor and tipped us off to a person he was working for that was moving.
Sans realtor, we contacted him and toured the house. Everything looked great so we made an offer. He gave us a price and said that if we wanted to involve the realtor the price would go up ~5% to cover their expenses. He preferred to do things through real-estate attorneys and we are OK going that route.
So after ghosting the realtor for a few days, we wrote her a letter saying she's done a great job so far, this was a fluke, and realize she spent time on us so if this house sale goes through we will cut her a check for $750 for her time. It has been a day and a half and we haven't gotten a response, so I'm thinking that bridge might be burned. I fully realize that she would make significantly more money if she represented us, but it doesn't feel fully justified when we contacted the owner ourselves.
So the question is, how awful of a thing did we do? For reference, the average house value around here is ~$130,000
Depending on the laws in your jurisdiction, your realtor may be able to claim her commission for the sale (probably 2-1/2 or 3 percent) even if she did not represent you in this transaction (this is the case where I live, in Maryland). I'm not saying for sure she WOULD do that, because it might involve legal costs on her part, but she could have a legal claim. That said, this is in my view a cost of doing business -- she might be mad at you, but she's not your friend. I would not count on being able to use her or her agency for anything in the future (don't hit them up for donations to your favorite charity, for example), but that's how it goes.
posted by OrangeDisk at 7:27 AM on March 30, 2018 [5 favorites]
posted by OrangeDisk at 7:27 AM on March 30, 2018 [5 favorites]
Huh? This is not your problem. If you had used a new realtor it might be different, but here the deal was done direct.
posted by JPD at 7:28 AM on March 30, 2018 [3 favorites]
posted by JPD at 7:28 AM on March 30, 2018 [3 favorites]
Did you sign a contract with this realtor? That is a key question here.
Ethically, I think you're more than fair here. Realtors have less and less to offer these days as information is more easily shared, and what they do offer does not merit or scale at 6%. This is a risk of being a realtor, and they need to find a way past it themselves, but not through your wallet.
posted by Dashy at 7:28 AM on March 30, 2018 [20 favorites]
Ethically, I think you're more than fair here. Realtors have less and less to offer these days as information is more easily shared, and what they do offer does not merit or scale at 6%. This is a risk of being a realtor, and they need to find a way past it themselves, but not through your wallet.
posted by Dashy at 7:28 AM on March 30, 2018 [20 favorites]
You owe this person nothing*, and you went beyond to try to be nice, you sent them a decent chunk of money, unasked for!
Leave it at that and move on in good conscience. They chose to work with you based on speculation, and it didn't pay off. That's how their job works. Yeah, it kinda sucks for them, but that has nothing to do with the ethics of your decision. "Realtor" is not some skid row job people are forced to take to make ends meet, you don't need to pity this person.
*Assuming you didn't sign some sort of contract with them saying that you would pay them even if you didn't use their services to find and buy a house. If you signed a contract like that, then this is sort of your problem too, and you might want to have a lawyer in mind in case the realtor starts sending nasty-grams.
posted by SaltySalticid at 8:23 AM on March 30, 2018 [2 favorites]
Leave it at that and move on in good conscience. They chose to work with you based on speculation, and it didn't pay off. That's how their job works. Yeah, it kinda sucks for them, but that has nothing to do with the ethics of your decision. "Realtor" is not some skid row job people are forced to take to make ends meet, you don't need to pity this person.
*Assuming you didn't sign some sort of contract with them saying that you would pay them even if you didn't use their services to find and buy a house. If you signed a contract like that, then this is sort of your problem too, and you might want to have a lawyer in mind in case the realtor starts sending nasty-grams.
posted by SaltySalticid at 8:23 AM on March 30, 2018 [2 favorites]
The last time we bought a house was 15 years ago, but we always had a contract with the realtors we worked with. Usually it was for a six-month period, and it stipulated that if we bought a house during that time, they got a commission. These contracts are a protection for realtors, so that home buyers can't cut them out after using their resources. This may have changed, but if you have a contract with your realtor, you ought to honor its terms.
posted by Orlop at 9:14 AM on March 30, 2018 [1 favorite]
posted by Orlop at 9:14 AM on March 30, 2018 [1 favorite]
Sounds ... okay to me. 4 houses / week times maybe 12 weeks so something like 50 houses at what? Half hour per house? That's 25 hours, so you've offered $30/hr (in contractor dollars, so it's comparable to more like $15/hr in salary terms). So on the one hand, that sounds low, because it's also not counting general time to chat with you nor the time it took to write the offers. On the other hand, that's the risk of doing business (you could've decided to move out of state instead leaving her with nothing), so I think it was decent of you to offer that. And yes, she'd make more if a deal went through, but it would also take a lot more work. So I can see her feeling a little like "wtf" and "why did this happen?" But also, unless you signed something, I think it isn't unreasonable on your part.
posted by salvia at 9:20 AM on March 30, 2018
posted by salvia at 9:20 AM on March 30, 2018
You are being very generous to offer compensation. RE Agents make great money when houses sell, which makes up for the time and effort that doesn't pay off. She spent time and gas money, but did not complete the task of finding you a house, or negotiating a sale, or assisting with the closing process. Buying a house is emotional, but it is a business arrangement, and unless there is some regulation in your area, or you signed a contract, or made a specific commitment, you have no obligation. Assuming the agent is gracious about this, the best thing you can do is refer her to other buyers and sellers.
posted by theora55 at 9:30 AM on March 30, 2018
posted by theora55 at 9:30 AM on March 30, 2018
don't loose any sleep over it , give the realtor a gift card if you feel you must......they did nothing on this deal.
posted by patnok at 9:39 AM on March 30, 2018
posted by patnok at 9:39 AM on March 30, 2018
Response by poster: We live in Illinois, and did not sign a contract
posted by Dmenet at 9:56 AM on March 30, 2018
posted by Dmenet at 9:56 AM on March 30, 2018
I'd go with the gift card and promise of referrals. I know that there is a code of ethics that Realtors have to adhere to that differs from state to state so she may not be able to accept a sizable cash gift.
And of course some Realtors have to make ends meet with their job, and it's a bummer when things don't pan out, but they understand that there is risk involved.
posted by kimberussell at 11:12 AM on March 30, 2018
And of course some Realtors have to make ends meet with their job, and it's a bummer when things don't pan out, but they understand that there is risk involved.
posted by kimberussell at 11:12 AM on March 30, 2018
I would be wary of the business/legal relationship writing her a check "for her time" creates. It'd be saying she WAS in part a realtor for this deal (only you're not paying her usual fee.) I wouldn't even give her a gift card.
This is not a property she had access to, right? So it's not as though you went around her.
posted by kapers at 11:56 AM on March 30, 2018 [4 favorites]
This is not a property she had access to, right? So it's not as though you went around her.
posted by kapers at 11:56 AM on March 30, 2018 [4 favorites]
Was the realtor an independent contractor with one of the larger Real Estate companies in Illinois (Baird & Warner, Berkshire Hathaway KoenigRubloff, or @properties)? My guess is no, because generally their parent company requires a contract, unless your realtor was working your gig under the table. The only reason I bring this up as a consideration is that the Realtor world in Illinois is very very small-town: everybody knows everybody, and everybody talks. Your names will definitely be passed around on a lot of mailing lists and Slack channels as shitty clients--even if you didn't break any contract or bend any rules. Yes, realtors know that "it's just business," but I worked for one of those companies (in a non-realtor position) for four years, and I have never met so many petty, mean-spirited, vicious mini-Machiavelli babies dressed up as functioning adults in my life.
I hope you are very happy with your new home, because no realtor currently working will touch you with a ten-foot pole for the next 10-15 years until the cycle of working realtors turns over and nobody knows who you are anymore.
posted by tzikeh at 12:00 PM on March 30, 2018 [2 favorites]
I hope you are very happy with your new home, because no realtor currently working will touch you with a ten-foot pole for the next 10-15 years until the cycle of working realtors turns over and nobody knows who you are anymore.
posted by tzikeh at 12:00 PM on March 30, 2018 [2 favorites]
Best answer: I'll bet that you could call ten realtors tomorrow and have seven willing to meet with you when you're available on Monday. Saying that they don't intend to work with you is the easy part.
You asked someone to help you find a home. They didn't, and didn't bind you to pay them in all events, and still you were generous. The realtor's disappointed, of course, that she wasn't able to accomplish what she set out to do, and to earn a commission, but she understands that that's the nature of the business. She's one of the seven, since she knows that you are good people.
posted by bullatony at 3:43 PM on March 30, 2018 [1 favorite]
You asked someone to help you find a home. They didn't, and didn't bind you to pay them in all events, and still you were generous. The realtor's disappointed, of course, that she wasn't able to accomplish what she set out to do, and to earn a commission, but she understands that that's the nature of the business. She's one of the seven, since she knows that you are good people.
posted by bullatony at 3:43 PM on March 30, 2018 [1 favorite]
Response by poster: Update: I called my real estate lawyer, and he agreed that as long as I didn't sign anything, I could pay her or not pay her and the realtor would have no 'foot in the door' legally to argue that she was my realtor. About three days after the email, the realtor responded graciously, saying that she appreciates the offer, but declined payment.
posted by Dmenet at 3:41 PM on April 30, 2018
posted by Dmenet at 3:41 PM on April 30, 2018
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We bought a house that was for sale by owner. We had a friend that was a realtor and ask him to represent us in the sale to make sure everything was done correctly. We paid him 5% of the sale price.
posted by tman99 at 7:26 AM on March 30, 2018 [2 favorites]