Curious about something....

[Steve]

Pretend you find yourself in the following situation....

You find out through relatives a house you've always loved since you were a kid is for sale. It's out of your price range, yet, it's something you would consider pursuing since you love the home so much.

You later find out that they are selling the home using a real estate agent. Would you consider waiting until the contract between the seller and agent expires in order to make the house more affordable for yourself and family?

Or would you view this as crooked and dishonest since the real estate agent works off commission?

 

[ali2]

Pretend you find yourself in the following situation....

You find out through relatives a house you've always loved since you were a kid is for sale. It's out of your price range, yet, it's something you would consider pursuing since you love the home so much.

You later find out that they are selling the home using a real estate agent. Would you consider waiting until the contract expires in order to make the house more affordable for yourself and family?

Or would you view this as crooked and dishonest since the real estate agent works off commission?

When does the contract expire? Is there a chance of you losing the house if you sit and wait?

 

[maleficent]

the real estate agent is working for the seller -not me - the buyer -I'd wait it out...

I'm not sure i undestand the poll question the way it's phrased...

It's not unethical..

What is the seller's intent after the contract expires? relisting with the same buyer who hasn't been able to move their property or go with another agent?

 

[Steve]

When does the contract expire? Is there a chance of you losing the house if you sit and wait?

Not sure and it's not really relevant. I'm more concerned with whether you think this is a crooked or dishonest thing to do regardless of when it expires.

 

[maleficent]

IF and only IF the seller were to whisper to you that the contract is expiring in XX amount of time.. and it'd be in your best interest to wait it out- then I might question it...

I've never bought a house -but I've watched my parents buy enough houses - the buyer doesn't pay t he commission - so the buyer isn't screwing anyone out of anything.

 

[Steve]

I'm not sure i undestand the poll question the way it's phrased...

Would you wait for the contract to expire or not as the buyer is what I'm asking. Does it not read that way?

What is the seller's intent after the contract expires? relisting with the same buyer who hasn't been able to move their property or go with another agent?

I'm not sure... as this is a real life situation and I am the buyer.

 

[Steve]

IF and only IF the seller were to whisper to you that the contract is expiring in XX amount of time.. and it'd be in your best interest to wait it out- then I might question it...

I've never bought a house -but I've watched my parents buy enough houses - the buyer doesn't pay t he commission - so the buyer isn't screwing anyone out of anything.

I was under the impression the commission was wrapped into the price of the house. Without the contract and subsequent commission the house could be 450k instead of 500k for example.

Am I incorrect in that assumption?

Or I guess a different take, if the seller doesn't have to worry about paying commission, they'll be more willing to negotiate to a lower selling price.

 

[maleficent]

crap i meant to say realtor above...

The contract is expiring with virtually no activity on the house -- no activity = no offers...

As the seller _I'd question how hard the realtor is working for me - and if they're doing every thing possible to move the house... Or if they are indeed serious about selling...

I like to believe that I have a fairly strong sense of ethics... so I do not believe that you as teh buyer are under any moral obligation to put any sort of money into the broker's pocket - they had their chance... and didn't do the job... that's life suck it up buttercup... the fact that you're interested in the house at a time when it's avaialbe has nothing to do with them...

 

[maleficent]

I was under the impression the commission was wrapped into the price of the house. Without the contract and subsequent commission the house could be 450k instead of 500k for example.

Am I incorrect in that assumption?

Or I guess a different take, if the seller doesn't have to worry about paying commission, they'll be more willing to negotiate to a lower selling price.

I think it depends on what is in tehclosing contract - you can negotiate closing costs into the price of the house... and price of the house could be inflated to accommodate that commission - or not...

(that's why you need a good real estate lawyer for the closing (i know of several in northern new jersey and more than serveral in nyc Pa rules might be different...

 

[Steve]

That's my initial, knee-jerk reaction too.

In this particular case I know the seller's agent did not 'produce' which, IMO, lessens any ethical responsibility the buyer might have. If any exists in the first place can be argued I'm finding out.

In the poll question though, I'm more interested in knowing what people would do without knowing if the seller's agent did or did not do his or her job.

Would you feel an ethical obligation since they work off commission?

Would you make an attempt to wait the contract out to make it more affordable?

Would you feel a moral obligation to right the broker even though you did not find the house by way of him or her?

I too feel like I have a good moral compass and this is the first time I've had to question it in a long while.

 

[maleficent]

Would you feel an ethical obligation since they work off commission?

No because the realtor works for the seller not me

Would you make an attempt to wait the contract out to make it more affordable?

yes, because it would affect my bottom line... and by waiting it out -- the price will drop

Would you feel a moral obligation to right the broker even though you did not find the house by way of him or her?

None whatsoever... again -they didn't do anything for me... and I realize that sounds selfish... but if somoene doesn't directly help me - then why should they profit off of me.

I go into a clothing store- I pick out a sweater I want - I head to the wrap station to purchase it -I have done all teh work myself -i resent being asked who on the floor helped me so they could get credit for teh sale... The fact that they were on the floor breathing -isn't enough to give them credit... they have to be actively working for me to get the credit -like find me my size, pick out the color - do something..

 

[SwampBillies]

If you have called and gotten information about the house, or looked at the house since she has had it listed then you would have to wait what is typically a 6 month period After the contract is expired. Most realtors list homes on what is called a right to sell contract. This means that no matter who sells the house during that time frame, they are due a commision. Also most of these contracts have a clause that if anyone that was involved with the home during this period comes back to buy the property for XXX amount of days (broker fills in this number with what ever they want. 180 days is usually standard.) Then they are still due a commision. This clause is standard to avoid exactly the situation you are referring to. It is not against the law to wait and I really don't think it is immoral, however it is very risky if you really want the house. Most listings are for a 6 month period, then if you have to wait the additional 6 months, that is a year for someone else to slip in under you.
What I would recommend instead, is to work with the realtor. Make an offer of what you want to pay. She is obligated to submit it to the seller no matter how low it is. If they don't accept it, fine. It is in the file and the seller knows you seriously want the house. You never know, they may take it. You have no idea of the sellers bottom line or motivation for selling. And it is not unusual, especially if you are working with the listing agent, for the agent to cut their commision rate to help the deal come together. Especially in this market, it's a bird in the hand.

 

[ali2]

Not sure and it's not really relevant. I'm more concerned with whether you think this is a crooked or dishonest thing to do regardless of when it expires.

The only reason I thought it would have been relevant was if it became an issue of you losing the house to another buyer b/c you were waiting out the contract, that's all.

If you are willing to wait, I see no issue with it at all.

 

[Steve]

If you have called and gotten information about the house, or looked at the house since she has had it listed then you would have to wait what is typically a 6 month period After the contract is expired.

A buddy of mine who does mortgages explained this to me. He also mentioned that most contracts have clauses where it the buyer comes from a source besides the original listing with the old agent... then that voids this 6 month clause.

That said, I don't see how they would tell the difference where the buyer comes from so I don't know how valid this is.

Most realtors list homes on what is called a right to sell contract. This means that no matter who sells the house during that time frame, they are due a commision. Also most of these contracts have a clause that if anyone that was involved with the home during this period comes back to buy the property for XXX amount of days (broker fills in this number with what ever they want. 180 days is usually standard.) Then they are still due a commision. This clause is standard to avoid exactly the situation you are referring to. It is not against the law to wait and I really don't think it is immoral, however it is very risky if you really want the house. Most listings are for a 6 month period, then if you have to wait the additional 6 months, that is a year for someone else to slip in under you.

Thanks for the information.

First, I was mostly interested in your take as to whether the buyer would be dishonest in his attempt to wait the contract out.

Second, in this particular situation I would never wait, as the buyer, an inordinate amount of time. If I found that the contract had months left on it, I would place my offer now.

If I found out that the contract had a couple of weeks on it... that might change things.

What I would recommend instead, is to work with the realtor. Make an offer of what you want to pay. She is obligated to submit it to the seller no matter how low it is. If they don't accept it, fine. It is in the file and the seller knows you seriously want the house. You never know, they may take it. You have no idea of the sellers bottom line or motivation for selling. And it is not unusual, especially if you are working with the listing agent, for the agent to cut their commision rate to help the deal come together. Especially in this market, it's a bird in the hand.

Thanks very much for the insight.

 

[Steve]

The only reason I thought it would have been relevant was if it became an issue of you losing the house to another buyer b/c you were waiting out the contract, that's all.

If you are willing to wait, I see no issue with it at all.

Thank you, and see the above post for the context of your concern.

 

[SwampBillies]

No because the realtor works for the seller not me

This is not always the case. Most times when a realtor lists a home they list as what is called a Transaction Broker. This means they don't really work for either side. No loyalty is shown to either side, and the seller signs that they understand that. The realtor works for the transaction. Trying to make a deal that everyone is happy with. Even though technically the commision comes from the sellers side of the money, you are right, the buyer is paying at least a portion of it.

yes, because it would affect my bottom line... and by waiting it out -- the price will drop

This is not always the case either. Most people make this assumption and think if they buy a house for sale by owner they will get it for less. The seller is just as worried about his bottom line as you are. If the market says his house is worth X amount of dollars he usually wants X amount of dollars. If he is willing to come off that number he will do so before the contract expires. If not he is going to want to keep the extra money that he is now not paying to a realtor.

 

[edco76]

Asolutely it is honest. The sales person earns a commission based on his/her ability and resources to sell/market the home. If you have not used their services/resources to make your buying decision then why give them money? You could even flip the script and say that you would be doing the family a dis-service by basically forcing them to pay a 6%+ commision to sell a home that they have pretty much sold themselves. I am a commisioned salesperson so I have pretty stiff ethics about these things and I tell you I could do it in good conscious.

 

[SwampBillies]

A buddy of mine who does mortgages explained this to me. He also mentioned that most contracts have clauses where it the buyer comes from a source besides the original listing with the old agent... then that voids this 6 month clause.

That said, I don't see how they would tell the difference where the buyer comes from so I don't know how valid this is.

They don't know where a buyer comes from. That is why the only way to void this clause is to name the buyer at the time of the listing. If I go to list your house and you tell me that your old neighbor might be interested in the home and his name is John Smith then he is named in the listing contract as exempt from commision.

 

[maleficent]

If the market says his house is worth X amount of dollars he usually wants X amount of dollars. If he is willing to come off that number he will do so before the contract expires

If the market says the house is worth xx dollars - and in 6 months time the house hasn't had any nibbles -the price is going to drop on the house - or it's goiing to be pulled off themarket because the market is dead... and wait for a better time... or a more motivated agent...

 

[Steve]

Asolutely it is honest. The sales person earns a commission based on his/her ability and resources to sell/market the home. If you have not used their services/resources to make your buying decision then why give them money? You could even flip the script and say that you would be doing the family a dis-service by basically forcing them to pay a 6%+ commision to sell a home that they have pretty much sold themselves. I am a commisioned salesperson so I have pretty stiff ethics about these things and I tell you I could do it in good conscious.

Thanks very much for this response.