Sharing broker co-op with buyer typical?

[irvinehomeowner]

Well, I don't think it is always that easy.  What happen if you got a client and after countless visit to open houses and numerous grand openings and did not purchase a home?

I think IR2 can tell you a story about a client of his who's looking for a 3CWG home in Irvine....

You forgot to add "... for YEARS!".

5 times could mean 10, 20 or 50 houses.

 

[bones]

So 6 visits for 15k comes out to 2.5k per visit. Must be nice to be a realtor

I need to take the real estate exam and mandarin classes ASAP.

Well, I don't think it is always that easy.  What happen if you got a client and after countless visit to open houses and numerous grand openings and did not purchase a home?

I think IR2 can tell you a story about a client of his who's looking for a 3CWG home in Irvine....

And if fair is fair, does this PITA client pay extra commission?  Oh wait - the sell side pays it. Which is why like someone said above, that money isn't really yours to begin with.

 

[Paris167]

So 6 visits for 15k comes out to 2.5k per visit. Must be nice to be a realtor

I need to take the real estate exam and mandarin classes ASAP.

Well, I don't think it is always that easy.  What happen if you got a client and after countless visit to open houses and numerous grand openings and did not purchase a home?

I think IR2 can tell you a story about a client of his who's looking for a 3CWG home in Irvine....

Well that's what I mean - after 5 visits and those showings I could have just said well I'm buying new in irvine and gotten an irvine realtor to just go up to OH with me and give me 50% of the co-op. But instead I was loyal, called the realtors outside of Irvine and said hey be a part of this with me so you get something for your efforts . And because of that now I 'm the bad client because I'm saying hey guys all the brokers are sharing the co-op with their clients so we feel it should apply to us as well. That's what I get for being loyal - lesson learned.

Qwerty I think I'll join you at the real estate exam and mandarin classes 

 

[eyephone]

Not all brokers give a percentage back to the buyer.

Going forward you need to have an agreement, that you will get a percentage of the commission. So you can take them to court and win. But in this case, no agreement (verbal or written).

 

[Bullsback]

So 6 visits for 15k comes out to 2.5k per visit. Must be nice to be a realtor

I need to take the real estate exam and mandarin classes ASAP.

Well, I don't think it is always that easy.  What happen if you got a client and after countless visit to open houses and numerous grand openings and did not purchase a home?

I think IR2 can tell you a story about a client of his who's looking for a 3CWG home in Irvine....

Well that's what I mean - after 5 visits and those showings I could have just said well I'm buying new in irvine and gotten an irvine realtor to just go up to OH with me and give me 50% of the co-op. But instead I was loyal, called the realtors outside of Irvine and said hey be a part of this with me so you get something for your efforts . And because of that now I 'm the bad client because I'm saying hey guys all the brokers are sharing the co-op with their clients so we feel it should apply to us as well. That's what I get for being loyal - lesson learned.

Qwerty I think I'll join you at the real estate exam and mandarin classes 

Nothing wrong with asking your agent up front, but to do it after the fact and after a transaction has closed is not appropriate, imo. How would you like it if your company came to you after you got paid and told you, nah, we are going to want some of that pay back?  By the way, most brokers/agents aren't going to give that commission back. 

 

[irvinehomeowner]

@Paris:

I assume you knew about the broker's co-op. You just didn't ask for a share just like you didn't ask for a share of the resale commission if you would have bought resale.

So if your neighbors didn't mention it, are you really missing out? I understand you are trying to equate work done on the new sale vs. what would have been done on a resale but in the end, you never initiated the conversation so part of this is on you. Now if you did know about sharing beforehand but did not inquire about, that's really on you.

I was at Best Buy the other day buying something and I noticed the guy in front of me was buying the exact same thing. Now, I knew that what I was buying was cheaper at Target by $25 and I was going to ask BB to price match it. The other guy had no idea but it was on sale so he thought was saving $25 anyways so he would be happy with his purchase. But I told him about the Target deal and also that BB price matches (which he didn't know), so he ended up saving $50. I didn't have to tell him, and he still would have got a good deal, but because I was more educated on the product than he was, he was able to double his discount.

It seems you were aware somewhat of rebates (anyone who uses Redfin at least should be), did you just neglect to ask them upfront?

 

[Irvine Dream]

@Paris:

I assume you knew about the broker's co-op. You just didn't ask for a share just like you didn't ask for a share of the resale commission if you would have bought resale.

So if your neighbors didn't mention it, are you really missing out? I understand you are trying to equate work done on the new sale vs. what would have been done on a resale but in the end, you never initiated the conversation so part of this is on you. Now if you did know about sharing beforehand but did not inquire about, that's really on you.

I was at Best Buy the other day buying something and I noticed the guy in front of me was buying the exact same thing. Now, I knew that what I was buying was cheaper at Target by $25 and I was going to ask BB to price match it. The other guy had no idea but it was on sale so he thought was saving $25 anyways so he would be happy with his purchase. But I told him about the Target deal and also that BB price matches (which he didn't know), so he ended up saving $50. I didn't have to tell him, and he still would have got a good deal, but because I was more educated on the product than he was, he was able to double his discount.

It seems you were aware somewhat of rebates (anyone who uses Redfin at least should be), did you just neglect to ask them upfront?

Paris

Forget about everything and enjoy your new house.  Hope you like your neighbors (owners not renters right?) and hope the interior turned out the way you envisioned. 

 

[eyephone]

@Paris:

I assume you knew about the broker's co-op. You just didn't ask for a share just like you didn't ask for a share of the resale commission if you would have bought resale.

So if your neighbors didn't mention it, are you really missing out? I understand you are trying to equate work done on the new sale vs. what would have been done on a resale but in the end, you never initiated the conversation so part of this is on you. Now if you did know about sharing beforehand but did not inquire about, that's really on you.

I was at Best Buy the other day buying something and I noticed the guy in front of me was buying the exact same thing. Now, I knew that what I was buying was cheaper at Target by $25 and I was going to ask BB to price match it. The other guy had no idea but it was on sale so he thought was saving $25 anyways so he would be happy with his purchase. But I told him about the Target deal and also that BB price matches (which he didn't know), so he ended up saving $50. I didn't have to tell him, and he still would have got a good deal, but because I was more educated on the product than he was, he was able to double his discount.

It seems you were aware somewhat of rebates (anyone who uses Redfin at least should be), did you just neglect to ask them upfront?

But if you think about it. A question to Paris: Did you think the agent wasn't going to get a commission? (when the agent went with you to show the model homes and you went through to buy the house)

 

[aquabliss]

If you agent/broker was going to share the commission with you on a resale, then seems only fair that they do the same on a co-op of a new home.  If they had no intentions or agreement to give you any commission rebate on a resale home, then they probably assumed the entire time that they could keep the full co-op for a new build.

It is kind of sneaky though that when you told them about OH they (I'm assuming) asked to join you in your initial visit.  If I was using an agent to look at resale homes and I wasn't getting a cut of any commission or co-op, I don't think I'd see any reason to bring them with me to look at new builds.  I could do that just fine on my own without feeling like I was wasting my agents time. 

I used USC as my agent for purchasing a new build and while we didn't have a contract stating the co-op split, we did speak openly about it and like he says, his word is good as gold.  It was painless and easy, and he was very accommodating to visit multiple new home sales offices with us on various days that fit our schedule.

 

[eyephone]

If you agent/broker was going to share the commission with you on a resale, then seems only fair that they do the same on a co-op of a new home.  If they had no intentions or agreement to give you any commission rebate on a resale home, then they probably assumed the entire time that they could keep the full co-op for a new build.

It is kind of sneaky though that when you told them about OH they (I'm assuming) asked to join you in your initial visit.  If I was using an agent to look at resale homes and I wasn't getting a cut of any commission or co-op, I don't think I'd see any reason to bring them with me to look at new builds.  I could do that just fine on my own without feeling like I was wasting my agents time. 

I used USC as my agent for purchasing a new build and while we didn't have a contract stating the co-op split, we did speak openly about it and like he says, his word is good as gold.  It was painless and easy, and he was very accommodating to visit multiple new home sales offices with us on various days that fit our schedule.

I don't think the issue is about: live up to the word/honor.

I think, the topic never came up.

 

[Paris167]

Like I mentioned before, new construction is a new experience to me. I did NOT know about a co-op prior to going there with the agent and conveniently the agent did not mention that they need to be there 1st time to get their commission. They just made it sound like you need an agent representing you and they can't represent me if I don't take them the 1st time. I now realize they really didn't need to be there at all.

So of course it never came up prior because I didn't do my research beforehand and they did not disclose it to me or inform me. So yes it's on me.

But after I had talked to 5 different people with different agents that had shared the co-op and thought that was fair I think it's reasonable to ask why we didn't get it as well. And mind you these other agents had worked with their clients for years - not just been picked up to represent for purpose of co-op sharing.

And for the record on a resale the agent does so much work I would never request for a percentage of their commission.

Anyway I'm not expecting anything back now since we didn't 't agree upon it prior. I'm going to go with the Frozen movie and just "Let it Go"

BUT - I sure do know for next time...

 

[zubs]

So 6 visits for 15k comes out to 2.5k per visit. Must be nice to be a realtor

I need to take the real estate exam and mandarin classes ASAP.

My realtor kicked back half her commision on my home sale.  Her commission was something like $16,000, but she only gave me $5500 or something like that.  I said .."hey where's the rest of my money?". she said she had to account for income tax and some other fees."  I was cool wid it....but from then on she knew I was a jew, but our relation did not suffer.

 

[eyephone]

So 6 visits for 15k comes out to 2.5k per visit. Must be nice to be a realtor

I need to take the real estate exam and mandarin classes ASAP.

My realtor kicked back half her commision on my home sale.  Her commission was something like $16,000, but she only gave me $5500 or something like that.  I said .."hey where's the rest of my money?". she said she had to account for income tax and some other fees."  I was cool wid it....but from then on she knew I was a jew, but our relation did not suffer.

What a post. (At least you got something)

 

[irvinehomeowner]

Did you figure in the broker's cut?

Also, from what USC and IR2 have posted, there should not be a deduction for taxes if this is done correctly.

 

[qwerty]

So 6 visits for 15k comes out to 2.5k per visit. Must be nice to be a realtor

I need to take the real estate exam and mandarin classes ASAP.

My realtor kicked back half her commision on my home sale.  Her commission was something like $16,000, but she only gave me $5500 or something like that.  I said .."hey where's the rest of my money?". she said she had to account for income tax and some other fees."  I was cool wid it....but from then on she knew I was a jew, but our relation did not suffer.

your realtor lied to you. the rebate is tax deductible so they dont get taxed on what you get, but at least you got something.

 

[zubs]

She did lie about the income tax, but her 50% rebate was so high, I was ok with getting a lesser amount back.  We probably saw 20 houses together before I made the purchase, and there were some other outstanding factors that put her in a favorable light.

 

[usctrojancpa]

So 6 visits for 15k comes out to 2.5k per visit. Must be nice to be a realtor

I need to take the real estate exam and mandarin classes ASAP.

My realtor kicked back half her commision on my home sale.  Her commission was something like $16,000, but she only gave me $5500 or something like that.  I said .."hey where's the rest of my money?". she said she had to account for income tax and some other fees."  I was cool wid it....but from then on she knew I was a jew, but our relation did not suffer.

That's kind of shady, to me at least.  The rebate portion to the buyer is not taxable to the buyer or the agent (it's a rebate/return on Schedule C).  She basically wanted to be have an equal net of tax split with you.  My broker's transaction fee and taxes come out of my portion of the rebate.

 

[eyephone]

And for the record on a resale the agent does so much work I would never request for a percentage of their commission.

It's all about the "art of negotiation" when it comes to making deals/choosing a real estate agent etc.

1. Five years ago, the agent I used to buy a resale house gave me a 1 percent of the purchase price.
2. The house we sold, I negotiated a lower commission rate for the agent. (selling agent) Also, if the house was bought was an agent from the team, then the commission rate for the buyer agent will be lower. The result: just happened that the buyer agent was from the same team.
I interviewed like 5 agents to see who was best fit. This one agent wrote me an email, that I wasted his time for the following: coming to visit me, taking time talking to me on the phone, etc..

 

[Paris167]

And for the record on a resale the agent does so much work I would never request for a percentage of their commission.

It's all about the "art of negotiation" when it comes to making deals/choosing a real estate agent etc.

1. Five years ago, the agent I used to buy a resale house gave me a 1 percent of the purchase price.
2. The house we sold, I negotiated a lower commission rate for the agent. (selling agent) Also, if the house was bought was an agent from the team, then the commission rate for the buyer agent will be lower. The result: just happened that the buyer agent was from the same team.
I interviewed like 5 agents to see who was best fit. This one agent wrote me an email, that I wasted his time for the following: coming to visit me, taking time talking to me on the phone, etc..

See I don't understand that.

Realtors are not supposed to act like they are doing you a BIG favor by showing you properties and answering your emails and your questions. It's a profession in sales based on commissions - that is what you do for a living. And it's certainly not a waste of time if you end up walking away with a big fat commision check at the end of the day. But they also don't look at it like - maybe I won't walk away with that payment now but if I foster a good relationship maybe in the near future I will be rewarded with loyalty from that client for years to come which would accumulate into a much larger sum of $$ over time.

That's what I felt with my realtor like it was such an inconvenience and they spent all this time showing me properties so they deserve all of that co-op and how dare you ask about taking some of it.

 

[notTHEoc]

And for the record on a resale the agent does so much work I would never request for a percentage of their commission.

It's all about the "art of negotiation" when it comes to making deals/choosing a real estate agent etc.

1. Five years ago, the agent I used to buy a resale house gave me a 1 percent of the purchase price.
2. The house we sold, I negotiated a lower commission rate for the agent. (selling agent) Also, if the house was bought was an agent from the team, then the commission rate for the buyer agent will be lower. The result: just happened that the buyer agent was from the same team.
I interviewed like 5 agents to see who was best fit. This one agent wrote me an email, that I wasted his time for the following: coming to visit me, taking time talking to me on the phone, etc..

See I don't understand that.

Realtors are not supposed to act like they are doing you a BIG favor by showing you properties and answering your emails and your questions. It's a profession in sales based on commissions - that is what you do for a living. And it's certainly not a waste of time if you end up walking away with a big fat commision check at the end of the day. But they also don't look at it like - maybe I won't walk away with that payment now but if I foster a good relationship maybe in the near future I will be rewarded with loyalty from that client for years to come which would accumulate into a much larger sum of $$ over time.

That's what I felt with my realtor like it was such an inconvenience and they spent all this time showing me properties so they deserve all of that co-op and how dare you ask about taking some of it.

The problem for realtors is it is very hard to know which clients will not generate business vs. those that do.

I would like to see some type of fee-for-service model take hold.

It wouldn't matter if you do a transaction or not. You should still have to pay for any type of service your broker offers. If I make a broker show me 100 homes, I should pay him $XX for each home he shows me, whether I make an offer or not. I should pay him $XXX for each offer I ask him to make. I should pay him $XX/hour for consultation. This encourages the buyer to use their broker's time wisely. Serious buyers will save money and not have to indirectly subsidize the broker's time spent on wasted activities.