Cancelled Contract and Realtor Gift?

If you felt s/he did a good job, then hire him/her when you do decide to sell. That's all. In a 6% world, there's a built in probability of not closing. I disagree with those who might sit on their rocking chair on the front porch and say you owe something or otherwise you've stolen the person's time. It's all built in to the pricing model.

Very classy of you to do this. I'd suggest a personal note, expressing your gratitude, offering to be a reference, and saying that you'll be back. With this I'd include $500 to $1000 in cash (consider how many hours he worked and what $500 computes to on an hourly basis) and assuming you got to know him somewhat during the year, something luxurious and personal of value like a really great bottle of wine. If your broker happens to be one of the city's mega-brokers, I'd omit the cash and just do the personal item. But assuming he's one of the brokerage industry's foot soldiers, the cash will be meaningful and he'll be so appreciative (and will work even harder for you when you put your place back on the market) and you'll feel great for what you did.

A nice box of homemade cookies.

A cash gift would be declasse.

I agree also with providing referrals and references.

If your agent (who is almost certainly not a Realtor) accepts a cash gift without alerting her manager, that agent is breaking New York State law. And it's a good law too, with real penalties attached. Don't encourage her to break the law, we have enough of that in the brokerage business already.

The reason is, all compensation for services must go through the broker of record--through Corcoran or Elliman or whomever. So that agent could take the cash to the manager of her office, and the manager (who represents the broker) then would have the option to share it with the agent, or share it not at all, or give it to her in fully.

A hand written note, a glowing testimonial on whatever websites that agent is on, referrals and if you must, cookies or flowers, is what I would do and it is absolutely all you ought to do.

P.S. you're a nice person, Eastside :)

I'm a huge fan of rewarding failure, including the extreme failure of bringing a client a buyer who was not properly vetted and caused a considerable loss of the client's energy, time, emotional wrangling, and money. And the potential loss of hot-market timing, to boot!

But why not be all Boca / Long Island classy and really "take care of" the agent for continued failure [use your best cigar-chomping and keep saying "The Frog, see, The Frog"]. Give him your apartment altogether. A more modest gift than that offered to the typical disgraced do-nothing corporate CEO, but that doesn't mean the failure was any less spectacular. Especially when the agent "worked" for a year, doing essentially nothing.

Alan Hart makes a very good point.

Definitely this buyer should have been vetted better. The only problem is people will flat out lie to you. From the buyer's perspective, it's not that much of a loss in this market.

You can give them a REBNY financial disclosure statement and have them sign it, but so what.

Some agents in big deals advocate for a contract clause that says if the buyer lied (OK, goofed) on the financial disclosure, and the mortgage fails, then they owe the seller damages.

In this market a seller should be able to get that, although I'm sure many attorneys are not going to like it one bit.

Alan's point is very valid, and Flutistic's justifications notwithstanding, as I reread the OP, it's pretty clear there is no backup. So really not a great job done by the broker. On the other hand, perhaps we had an unrealistic seller at too high a price point for the apartment, and this feeling of needing to offer a gift could be based somewhat on that recognition.

Not too much to make broker feel like you owe him anything, not too small to be jerk like.

There is no reason to give your broker anything. After all, YOU are out money at this point as well. Not only has your deal failed to close but you have also presumably coughed up legal fees to boot. Your broker should have done a better job with securing backup buyers as well as cracking the whip on the buy side when it became clear they were in danger of lapsing.

isnt the reason there is a 6% commission because sometimes things just dont work out? It is the nature of the beast.

and, I agree, the broker failed you. you should get the gift.

Eastside, bear in mind that you're on boards where many many posters don't believe in tipping their doormen, let alone people who provide other services for them.

I am not of this mentality (and in fact just yesterday sent one of my doctors a gift basket -- on top of services that I paid for -- can you imagine?)

So I think it's a nice thing to do, and that whatever amount you think is appropriate is appropriate -- from my pleased clients I have received the gamut, from flowers to restaurant gift cards to cash. Flutistic is right, though, that any substantial payment needs to go through the broker of record because in New York state, agents don't handle money; only brokers do.

ali r.
DG Neary Realty

45 days to get a mortgage may just be the average time required with the way banks are operating now. Unless you are sure that the buyer won't have the prospect to get the mortgage even if you give them any more time, canceling the contract on the 46th day may be quite an extreme. That may be why Eastside wants to compensate his broker/agent for their trouble.

Although its a very nice gesture, it is not needed. If you feel like rewarding someone for good service then sending them a nice note to their manager, and/or agree to list with them in future or send any referrals their way should it be appropriate. Its part of the business that some transactions don't go through for whatever reason and most good brokers understand this.

selyanow seems to be a person of high integrity. any broker who wants to receive cash compensation in absence of a transaction (i.e. which also happens to be in absence of you getting any cash), on the other hand...

>That may be why Eastside wants to compensate his broker/agent for their trouble.

What trouble? That's the business. Is there a discount if the deal does get done? What if it gets done quickly? What if all the broker had to do was have 3 open houses and then appointments here and there to get the transaction closed? What if the broker just has to be a key turner?

Either the industry works based on transactions (i.e. performance) or they are doormen working for a base salary plus tips.

thanks field. and yes, sometimes transactions are so easy the broker barely has to do anything and it sells in 2 days, sometimes they have to do open houses for 6 months, sometimes it never sells. Sometimes 5 million dollar apts sell w/out hitting the market and broker gets paid and that same broker will have a 300k studio in a 5th floor walkup w/shakey building financial issues. all are true. oh well. such as life.

I agree with selyanow

Not that the broker "deserved" the gift, but Eastside knew that he has created this situation by not granting the buyer more time to get the mortgage. It is almost like Eastside wanted to withdraw the listing and used the 45 days as an excuse.In most other transactions, the buyer would be granted an extension. That guilty feeling pushed him to have this idea.

Vic, there is some truth to what you are saying but we were all packed and ready to go and if the buyers buyer didnt get approved after an extension, Im sure no one would have felt sorry for us or the money we put out.....we were in contract for 3 months....it was a long time and it just didnt feel right anymore...I do feel bad for everyone involved but these buyers were preapproved....something was fishy and I doubt they would have gotten a mortgage...the attorney sent us the extension request at 5pm on the day it was due after I was emailing him for weeks prior to ask about it with no response(he didnt even respond to my atty)......they were playing games with us and it just turned us off to the whole situation...

Eastside,

Not saying that it is your fault. It is a very unfortunate outcome for everyone. If it was not an appraisal value issue, then it could be some negative changes in the buyer's financial status that made the bank change its mind to lend, even with the preapproval. That was why you feel sorry for your broker and try to compensate him despite the breaking of the contract. It is fine. Just do so legally as others had suggested. Good luck.

A non-desperate broker with integrity would accept only a small gift (sorry, not cookies though) and no cash, and ask to continue to be able to represent the seller with the time is right again. A good broker would ask the seller to recommend him or her to the seller's friends.
A desperate broker and/or one lacking integrity wants heads I win / tails you lose model of a client relationship.