I showed my apartment without a broker and decided to list it with a broker. If anyone who saw it before I signed with a broker now makes an offer, does the broker still receive his commission? We listed our apartment on our building's website, accessible only to residents, to see whether the market really turned around in our complex. There was a lot of interest, but the offers we received were... [more]
I showed my apartment without a broker and decided to list it with a broker. If anyone who saw it before I signed with a broker now makes an offer, does the broker still receive his commission?
We listed our apartment on our building's website, accessible only to residents, to see whether the market really turned around in our complex. There was a lot of interest, but the offers we received were very, very low compared to recent sales, even considering the savings on the brokers fees. So we listed with a broker we've used before.
Someone who looked at the apartment for 5 minutes and never called back until he saw our broker's ad for an Open House. When he saw that the broker's asking price is 12.5% more than our original price, he wanted to make an offer at our full price. He claims that no broker's fees should be paid.
My feeling is that the broker's fees have to be paid, both legally and ethically. This potential buyer never made an offer or gave us any feed back until 5 days AFTER I listed with a broker.
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Response by ggman
over 12 years ago
Posts: 117
Member since: Mar 2010
I agree the broker should be paid. He did his job. Since buyer has no broker I would think the 3 parties can reach a middle ground. (i.e original offer plus 3-4 perecent, broker takes 3-4 rather than 6).
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Response by jim_hones10
over 12 years ago
Posts: 3413
Member since: Jan 2010
you could have (should have) negotiated that if you signed a contract with the broker. you may have to pay the commission.
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Response by alanhart
over 12 years ago
Posts: 12397
Member since: Feb 2007
It's customary to provide the broker with a (short) list of people who viewed the apartment before you brought your listing to the broker, so the broker gets nothing if those people go to contract. You didn't, and moreover the person in your building showed no interest so you probably wouldn't have listed him.
So I agree, the broker turned the key, so must be paid if your neighbor closes. However, your neighbor sounds too flaky to close, so don't invest too much in the "what if".
Out of curiosity, how long was it listed on the building website before the broker's listing was up?
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Response by gabrielle904
over 12 years ago
Posts: 121
Member since: Jan 2009
Hi Jelj12
If you have a signed contract with a broker, it is a contract and they will rightly chase you for the money if it isn't paid.
Your offer of paying 3-4% sounds more than reasonable.
Usually you put in a contract if the other side doesn't have a broker, your broker gets 3% because they don't need to pay the other broker 3% (some will complain that they will have to help you more with a board package if you don't have a broker, either tell tell them you are responsible and will get it done, or hire a service that does a beautiful job for $400.
Additionally usually you put in a contract with a broker, a list of people who have seen the property, usually a broker tries to limit it to about 20 people, and if any of those people buy in the first 2-3 months then there is no commission (it is a slight risk the broker takes, taking on the job.)
Hence I think, negotiate 3% to the broker, if you didn't put it in your contract is more than fair.
Show the buyer you have a legally enforceable contract at 6%, , however the broker will move to 3%
Get at least 6-9.5% more than your low asking price to do a quick deal.
The market has been crazy hot on the UWS, not sure where you are. Look at how much apt are going over what they were, 6 mths ago, 12 mths ago.
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Response by jim_hones10
over 12 years ago
Posts: 3413
Member since: Jan 2010
gabrielle904
20 minutes ago
Posts: 115
Member since: Jan 2009
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Hi Jelj12
If you have a signed contract with a broker, it is a contract and they will rightly chase you for the money if it isn't paid.
Your offer of paying 3-4% sounds more than reasonable.
Usually you put in a contract if the other side doesn't have a broker, your broker gets 3% because they don't need to pay the other broker 3% (some will complain that they will have to help you more with a board package if you don't have a broker, either tell tell them you are responsible and will get it done, or hire a service that does a beautiful job for $400.
Additionally usually you put in a contract with a broker, a list of people who have seen the property, usually a broker tries to limit it to about 20 people, and if any of those people buy in the first 2-3 months then there is no commission (it is a slight risk the broker takes, taking on the job.)
Hence I think, negotiate 3% to the broker, if you didn't put it in your contract is more than fair.
Show the buyer you have a legally enforceable contract at 6%, , however the broker will move to 3%
Get at least 6-9.5% more than your low asking price to do a quick deal.
The market has been crazy hot on the UWS, not sure where you are. Look at how much apt are going over what they were, 6 mths ago, 12 mths ago.
you have made a number of broad and incorrect assumptions. if the contract doesn't stipulate a reduction in fee for a direct client (many don't, and i would never agree to 3% in any case) then what makes you think the agent is going to take less? the terms are in the contract.
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Response by greensdale
over 12 years ago
Posts: 3804
Member since: Sep 2012
>you have made a number of broad and incorrect assumptions. if the contract doesn't stipulate a reduction in fee for a direct client (many don't, and i would never agree to 3% in any case) then what makes you think the agent is going to take less? the terms are in the contract.
Jim, suddenly you are in the sales market?
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Response by jelj13
over 12 years ago
Posts: 821
Member since: Sep 2011
The contract reads that the fee is 5% if the buyer has a broker. It is 3% if the buyer has no broker. I told the potential buyer that.
I also reminded him the potential buyer that I gave him a date on which I was turning the listing over to a broker if I did not receive a reasonable offer. That would mean the price would rise because my FSBO price was well below the average closing price for comps in the building this year, mainly becuase I discounted the more than the cost of a broker. He never contacted me and I turned the listing over to a broker.
The potential buyer is angry because the broker listed the apartment for 12.5% more than I did. He claims that I have to sell it to him at my FSBO price and stiff the broker since he saw the apartment before I signed with the broker. However, he never contacted me until 6 days AFTER I signed with the broker.
My concern is that I might get more calls like this from some other neighbors who saw the apartment ...
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Response by NWT
over 12 years ago
Posts: 6643
Member since: Sep 2008
Tell them, tough shit. If they want to make an offer, then they can call your broker. Half the point of having one is not having to deal with crackpots and loonies.
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Response by ioserin
over 12 years ago
Posts: 21
Member since: Jan 2009
Unless you listed in the exclusive agreement the names of the buyers who you showed your apartment to before the exclusive contract was signed the listing broker is under no obligation to reduce their commission.....nor should they......the higher offer would not exist had you not listed it with the broker.
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Response by gcondo
over 12 years ago
Posts: 1111
Member since: Feb 2009
I love the real estate cartel in NYC.
You could always fire the broker and then entertain the offer.
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Response by ab_11218
over 12 years ago
Posts: 2017
Member since: May 2009
this "buyer" seems like a complete ass. i would walk away as this deal will have way too many headaches to deal with. if you're price is good, you'll sell quickly and avoid the huge headache that this guy is giving you.
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Response by buster2056
over 12 years ago
Posts: 866
Member since: Sep 2007
I love that the potential buyer is trying to tell you what you "have" to do. Until a contract is signed, you don't have to do anything. If you wanted to raise the price 1,000%, you are entitled to do so. Follow NWT's advice and refer him to your broker.
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Response by kmbroker
over 12 years ago
Posts: 116
Member since: Jan 2008
any one who calls you directly should be referred to your broker, another reason we get paid is so you do not have to negotiate directly with the buyer
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I agree the broker should be paid. He did his job. Since buyer has no broker I would think the 3 parties can reach a middle ground. (i.e original offer plus 3-4 perecent, broker takes 3-4 rather than 6).
you could have (should have) negotiated that if you signed a contract with the broker. you may have to pay the commission.
It's customary to provide the broker with a (short) list of people who viewed the apartment before you brought your listing to the broker, so the broker gets nothing if those people go to contract. You didn't, and moreover the person in your building showed no interest so you probably wouldn't have listed him.
So I agree, the broker turned the key, so must be paid if your neighbor closes. However, your neighbor sounds too flaky to close, so don't invest too much in the "what if".
Out of curiosity, how long was it listed on the building website before the broker's listing was up?
Hi Jelj12
If you have a signed contract with a broker, it is a contract and they will rightly chase you for the money if it isn't paid.
Your offer of paying 3-4% sounds more than reasonable.
Usually you put in a contract if the other side doesn't have a broker, your broker gets 3% because they don't need to pay the other broker 3% (some will complain that they will have to help you more with a board package if you don't have a broker, either tell tell them you are responsible and will get it done, or hire a service that does a beautiful job for $400.
Additionally usually you put in a contract with a broker, a list of people who have seen the property, usually a broker tries to limit it to about 20 people, and if any of those people buy in the first 2-3 months then there is no commission (it is a slight risk the broker takes, taking on the job.)
Hence I think, negotiate 3% to the broker, if you didn't put it in your contract is more than fair.
Show the buyer you have a legally enforceable contract at 6%, , however the broker will move to 3%
Get at least 6-9.5% more than your low asking price to do a quick deal.
The market has been crazy hot on the UWS, not sure where you are. Look at how much apt are going over what they were, 6 mths ago, 12 mths ago.
gabrielle904
20 minutes ago
Posts: 115
Member since: Jan 2009
ignore this person
report abuse
Hi Jelj12
If you have a signed contract with a broker, it is a contract and they will rightly chase you for the money if it isn't paid.
Your offer of paying 3-4% sounds more than reasonable.
Usually you put in a contract if the other side doesn't have a broker, your broker gets 3% because they don't need to pay the other broker 3% (some will complain that they will have to help you more with a board package if you don't have a broker, either tell tell them you are responsible and will get it done, or hire a service that does a beautiful job for $400.
Additionally usually you put in a contract with a broker, a list of people who have seen the property, usually a broker tries to limit it to about 20 people, and if any of those people buy in the first 2-3 months then there is no commission (it is a slight risk the broker takes, taking on the job.)
Hence I think, negotiate 3% to the broker, if you didn't put it in your contract is more than fair.
Show the buyer you have a legally enforceable contract at 6%, , however the broker will move to 3%
Get at least 6-9.5% more than your low asking price to do a quick deal.
The market has been crazy hot on the UWS, not sure where you are. Look at how much apt are going over what they were, 6 mths ago, 12 mths ago.
you have made a number of broad and incorrect assumptions. if the contract doesn't stipulate a reduction in fee for a direct client (many don't, and i would never agree to 3% in any case) then what makes you think the agent is going to take less? the terms are in the contract.
>you have made a number of broad and incorrect assumptions. if the contract doesn't stipulate a reduction in fee for a direct client (many don't, and i would never agree to 3% in any case) then what makes you think the agent is going to take less? the terms are in the contract.
Jim, suddenly you are in the sales market?
The contract reads that the fee is 5% if the buyer has a broker. It is 3% if the buyer has no broker. I told the potential buyer that.
I also reminded him the potential buyer that I gave him a date on which I was turning the listing over to a broker if I did not receive a reasonable offer. That would mean the price would rise because my FSBO price was well below the average closing price for comps in the building this year, mainly becuase I discounted the more than the cost of a broker. He never contacted me and I turned the listing over to a broker.
The potential buyer is angry because the broker listed the apartment for 12.5% more than I did. He claims that I have to sell it to him at my FSBO price and stiff the broker since he saw the apartment before I signed with the broker. However, he never contacted me until 6 days AFTER I signed with the broker.
My concern is that I might get more calls like this from some other neighbors who saw the apartment ...
Tell them, tough shit. If they want to make an offer, then they can call your broker. Half the point of having one is not having to deal with crackpots and loonies.
Unless you listed in the exclusive agreement the names of the buyers who you showed your apartment to before the exclusive contract was signed the listing broker is under no obligation to reduce their commission.....nor should they......the higher offer would not exist had you not listed it with the broker.
I love the real estate cartel in NYC.
You could always fire the broker and then entertain the offer.
this "buyer" seems like a complete ass. i would walk away as this deal will have way too many headaches to deal with. if you're price is good, you'll sell quickly and avoid the huge headache that this guy is giving you.
I love that the potential buyer is trying to tell you what you "have" to do. Until a contract is signed, you don't have to do anything. If you wanted to raise the price 1,000%, you are entitled to do so. Follow NWT's advice and refer him to your broker.
any one who calls you directly should be referred to your broker, another reason we get paid is so you do not have to negotiate directly with the buyer