Posted by Ed Copp (OH) on February 13, 2001 at 18:38:51:
are payable to the broker who owns the listing. He/She pays the co-op broker and the broker(s) each pay thier agents individually. Whether or not the listing is about to expire has nothing to do with it because all listings are owned by the listing broker. A buyer, seller, or another agent; can not pay an agent directly. They are the agent (of the broker). This would also include finders fees which would also be looked at as commissions of irregular amounts.
The concept of a 7% commission is a rather, tounge in cheek; expression. It very seldom actually happens.
Let’s say There was a $100,000 house on the market. It is my understanding that the Real Estate agent would get about 7% of this deal. Bringing the money to seller down to $93,000.
In a situation like this would it be possible to contact the agent with a L/O deal to offer the owner. If the owner accepts, find a L/O tenant and then instead of paying the 7% commission to agent offer instead 1/2 of any upfront option consideration money paid by the future Tenant/Buyer which in this case would work out to about 3-5%. Agents would make about ($1395-$2325) instead of $7,000, once a qualified tenant buyer is found and upfront option money is received. Just curious as to whether or not this is Ok to do. This maybe only effective in a listing that is about to expire should or could this be offered to any listing the agent has?
Re: Real Estate Agents and L/O’s - Posted by Ben (FL)
Posted by Ben (FL) on January 29, 2001 at 11:34:31:
I’ve found the only way to get an agent to take your L/O offer seriously is to keep them interested, and the only way to do that is make sure they get their commission.
One interesting tactic, although it will tic them off is to say that if they won’t cut their commission in half, then you have a realtor you work with who would be more than happy to represent you in this transaction and take half of the commission anyway. Bear in mind though that this may poison the well.
Anyway, I have offered to pay the commisssion as option consideration. Chances are the seller doesn’t know anything about the sale that the agent doesn’t tell them. In this way, they know they are going to get paid, and that puts them on your side in selling the L/O to the seller.
One thing I also did (although this was with a realtor who was also an investor so…) was offer to pay half the commission as Option consideration, then either make payments on the rest, or pay the rest when the t/b’er finances the house at the end. Of course, you would have to offer a premium commission for this.
Re: Real Estate Agents and L/O’s - Posted by Ed Copp (OH)
Posted by Ed Copp (OH) on January 28, 2001 at 14:07:20:
JR,
First let me say that 7% commission although talked about a lot, very seldom happens.
Now that said, all fees are negotiable, so it would not hurt to make your offer. The chances of your offer being accepted are very slim. Your offer might have merit if the listing is about to expire.
Now if you deal with the agent at this point you will provide a written record that, that agent brought you to the seller; probably obligating the seller to pay some sort of commission even if you do a deal directly after the listing expires. That clause is usually in effect for 90 days on most listing contracts.
I would call your offer a “lightweight” type of offer. Bear in mind your offer is conditioned on another transaction taking place down the road. So in essence you are suggesting that the agent just split the commission with you, just because you showed up with nothing at all I might add. No buyer, No money. Seems that the agent ought to be smart enough to to the deal that you seggest without you.
Don’t forget - they have to split the 7% anyway - Posted by Brenda
Posted by Brenda on February 13, 2001 at 09:09:56:
Don’t assume that the realtor is taking home 7% of the sale price of the house. They have to split it with their broker/company and possibly also with another agent, which leaves them with either 3.5% or 1.75% in the end. I don’t know if they have to split finder’s fees with their broker or not. If not, a 1-2% finder’s fee on a l/o might be very attractive to them…especially if the house isn’t selling and they are going to lose the listing anyway. Anyone know the rule on splitting finder’s fees?