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Seller's agent said she'll take buyer and seller's commission?

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  • Oct 12th, 2014 3:35 pm
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Jr. Member
Oct 6, 2010
131 posts
22 upvotes

Seller's agent said she'll take buyer and seller's commission?

Hi Real Estate Gurus,

We're in the process of buying our first house here in Montreal. We've decided to go at this without an agent representing us and found a property we like and made an offer. We visited the property a week ago (with the seller's agent) and asked for the papers from the agent to make an offer. She said she couldn't send us the blank forms, and had to fill them with our info, but she would send us a draft version for review and then a final version to sign.

We made the offer and the seller countered. When I spoke to the agent on the phone about the counter-offer, I mentioned to her that we are discounting the commission (that they don't have to pay to a buyers agent) in the price offered. When I said that she told me "well you know, that's not how it works, I have a responsibility towards you, I showed you the house and filled the papers (which she forced on us, saying she couldn't send a blank form) so it's not as easy as discounting 2.5%". She said she has a "little bit" of leeway with the commission, but implied she would be taking both the buyer and seller's commission.

Am I the only one that thinks this isn't normal, and that 'filling out a form and showing us the house' is part of her duty as the seller's agent, and not worth 6 grand?

Thanks!
70 replies
Deal Addict
User avatar
Jan 8, 2009
1568 posts
613 upvotes
Brampton
As a buyer, why do you bother about the commission and who takes it. I think you should put your counter offer without any explanation to the agent. Just put your offer with the amount you think makes sense and let the seller decide.
Jr. Member
Oct 6, 2010
131 posts
22 upvotes
Because ultimately, the commission is coming out of our own pockets since we are the ones bringing money to the table. If the seller didn't have a representation agreement (forcing them to pay commission to their agent) we could offer $246,000 directly to the seller, and this would be equivalent to their $259,000 listing price with an agent (assuming standard 5% commission).
Deal Addict
Sep 5, 2009
3301 posts
1486 upvotes
Talk to the seller directly, knock on the door. Your offer should factor in not having an agent. At the end of the day the seller just cares about their bottom line.
Banned
Nov 27, 2006
2200 posts
445 upvotes
Toronto
canibusIII wrote: Because ultimately, the commission is coming out of our own pockets since we are the ones bringing money to the table. If the seller didn't have a representation agreement (forcing them to pay commission to their agent) we could offer $246,000 directly to the seller, and this would be equivalent to their $259,000 listing price with an agent (assuming standard 5% commission).
Make your offer and let the seller worry about how much she will get.. So make your offer 5% less or whatever.
Jr. Member
Oct 6, 2010
131 posts
22 upvotes
dgnr8 wrote: Talk to the seller directly, knock on the door. Your offer should factor in not having an agent. At the end of the day the seller just cares about their bottom line.
We thought about it. Any cons? I don't want to ''scare'' them off..
Deal Addict
Sep 5, 2009
3301 posts
1486 upvotes
It depends on whether you are in a buyer or sellers market. If you are in a buyers market prepare yourself with comparables and show up with an offer higher than the closest comparable but deducting the buyer's commission.
Member
Mar 28, 2013
208 posts
19 upvotes
SCARBOROUGH
We tried this twice. The first time we dropped off a letter to the sender advising them that we would be making an offer without an agent and to factor in that our offer they would pay no buyers agent commission (2.5 percent portion). They wanted more money and didn't care about the commission as they were moving west and the employer was paying for the commission. We made an offer through the agent but entered into a customer service agreement.

The second time it was over a house we loved. We tried calling the seller with no luck. So we made an offer with the agent. The agent said that we were doing something illegal. We asked what laws we broke. Then she stated that we were strange. I thanked her for her opinion of us and asked her to present the offer. The buyer took an offer of $890,000 over our no commission offer of $880,000. This baffles us to this day. No inspection requirement or financial requirement. It was a clean offer. We tried connecting with the seller on linkedin but she ignored us.

We are thinking of filing a complaint to the regulator but will need more research for that. We had a lawyer review an offer we completed for free (she didn't charge us).
Sr. Member
Sep 10, 2014
533 posts
89 upvotes
Dartmouth, NS
Talking to the seller won't do anything; they have an agreement to sell the property paying the agent a commission. Even if you waited 6 months to buy the house, because the agent showed the house and you eventually bought it, they would be entitled to the commission. Any showing during the time of representation that results in a sale means fulfilment of the contract.

Secondly, you can't discount anything; the seller signed the contract, not you. When they signed the contract it would have stated that they will pay the agent a certain commission; that commission is split between the two agents. The fact that there isn't a buying agent doesn't reduce the commission, it just means the selling agent gets it all.
Member
Mar 28, 2013
208 posts
19 upvotes
SCARBOROUGH
Cappuccinosf, if that was the case then why would the agent not advocate for us rather than discouraging us. This happened twice with us.
cappuccinosf wrote: Talking to the seller won't do anything; they have an agreement to sell the property paying the agent a commission. Even if you waited 6 months to buy the house, because the agent showed the house and you eventually bought it, they would be entitled to the commission. Any showing during the time of representation that results in a sale means fulfilment of the contract.

Secondly, you can't discount anything; the seller signed the contract, not you. When they signed the contract it would have stated that they will pay the agent a certain commission; that commission is split between the two agents. The fact that there isn't a buying agent doesn't reduce the commission, it just means the selling agent gets it all.
Deal Fanatic
Aug 27, 2004
7673 posts
1131 upvotes
Toronto, ON
canibusIII wrote: Am I the only one that thinks this isn't normal, and that 'filling out a form and showing us the house' is part of her duty as the seller's agent, and not worth 6 grand?
6 grand? Ahh, cheap Quebec real estate. If this was Toronto, they'd be getting 30-50K instead. :)
Deal Fanatic
Aug 27, 2004
7673 posts
1131 upvotes
Toronto, ON
Gnucky wrote: The buyer took an offer of $890,000 over our no commission offer of $880,000. This baffles us to this day.
It shouldn't baffle you. (I assume you meant 'seller', not 'buyer')

If the seller goes to the real estate agent and says 'Gnucky made me an offer without using an agent, I decided to sell to him, go screw yourself, you're not getting a commission', the next day, his/her real estate agent will call their lawyer and sue the seller for breach of contract. (Especially in the GTA where inflated home prices mean commissions are big $$$)

So, really, the seller had two offers: a $890K offer and a $880K offer, both of which involved paying the commission due under the contract. They chose the $890K one. Seems reasonable to me.
Deal Fanatic
Aug 27, 2004
7673 posts
1131 upvotes
Toronto, ON
By the way, this is the standard form used in Ontario: http://www.torontorealestateboard.com/b ... 00a_PL.pdf

Read clause 2:
2. COMMISSION: In consideration of the Listing Brokerage listing the Property, the Seller agrees to pay the Listing Brokerage a commission
of............................% of the sale price of the Property or...................................................................................................................................
for any valid offer to purchase the Property from any source whatsoever obtained during the Listing Period and on the terms and conditions set
out in this Agreement OR such other terms and conditions as the Seller may accept
.
The Seller further agrees to pay such commission as calculated above if an agreement to purchase is agreed to or accepted by the Seller or
anyone on the Seller’s behalf within............................. days after the expiration of the Listing Period (Holdover Period), so long as such agreement
is with anyone who was introduced to the Property from any source whatsoever during the Listing Period or shown the Property during the Listing Period
.
If, however, the offer for the purchase of the Property is pursuant to a new agreement in writing to pay commission to another registered real estate
brokerage, the Seller’s liability for commission shall be reduced by the amount paid by the Seller under the new agreement.
The Seller further agrees to pay such commission as calculated above even if the transaction contemplated by an agreement to purchase agreed to or
accepted by the Seller or anyone on the Seller’s behalf is not completed, if such non-completion is owing or attributable to the Seller’s default or neglect,
said commission to be payable on the date set for completion of the purchase of the Property.
Any deposit in respect of any agreement where the transaction has been completed shall first be applied to reduce the commission payable. Should
such amounts paid to the Listing Brokerage from the deposit or by the Seller’s solicitor not be sufficient, the Seller shall be liable to pay to the Listing
Brokerage on demand, any deficiency in commission and taxes owing on such commission.
All amounts set out as commission are to be paid plus applicable taxes on such commission.
Sr. Member
Sep 10, 2014
533 posts
89 upvotes
Dartmouth, NS
Gnucky wrote: Cappuccinosf, if that was the case then why would the agent not advocate for us rather than discouraging us. This happened twice with us.
What do you mean "advocate vs discourage"?
Deal Addict
User avatar
Jul 5, 2003
1118 posts
43 upvotes
Why didn't you just get your own real estate agent? I would never use a seller's agent - I wouldn't know whose best interest they have - the seller or the buyer? Just messed up.
Deal Fanatic
Aug 21, 2007
6055 posts
853 upvotes
Markham
CharmyPoo wrote: Why didn't you just get your own real estate agent? I would never use a seller's agent - I wouldn't know whose best interest they have - the seller or the buyer? Just messed up.
i suppose the idea would be to try and save 2.5% out of the transaction...
Deal Fanatic
Aug 27, 2004
7673 posts
1131 upvotes
Toronto, ON
adeel wrote: i suppose the idea would be to try and save 2.5% out of the transaction...
... but you can't, since it's not the buyer who pays the buyer's agent's commission...
Deal Fanatic
Aug 21, 2007
6055 posts
853 upvotes
Markham
VivienM wrote: ... but you can't, since it's not the buyer who pays the buyer's agent's commission...
theoretically, without a buyers agent, could offer 2.5% less total price as the buyer, while the seller will be in the exact same position, since the net proceeds they receive would be the same - in fact theyd be slightly better off, since they save the HST on the 2.5% discounted commission as well.

It really only works for the buyer - with a straight 2.5% discount - so a buyer would probably have to price at fair value less 1.25% lets say - in whch case both the buyer and seller would be better off as opposed to including a buyers agent

This is probably an extenion of where the idea of selling privately comes in.
Deal Fanatic
Aug 27, 2004
7673 posts
1131 upvotes
Toronto, ON
adeel wrote: theoretically, without a buyers agent, could offer 2.5% less total price as the buyer, while the seller will be in the exact same position, since the net proceeds they receive would be the same - in fact theyd be slightly better off, since they save the HST on the 2.5% discounted commission as well.
No, because the seller's contract with the seller's agent provides that the seller's agent gets the full commission in that scenario.

(This is real estate. What you realize when you read those 'standard' contracts is that the real estate profession has crossed every T and dotted every I to make sure they get their money...)
Deal Expert
May 30, 2005
49009 posts
10302 upvotes
Richmond Hill
Can you just get a common ground and ask for the 2% kick back from the seller's agent (now also acting as your buyer's agent) for the minimal amount of work they had to do? This way s/he gets 0.5% still and should be happy, otherwise you can easily find another agent that would be willing to do that for you for basically a job that's guaranteed.
Tons of things for sale!
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