Profile picture for Miswa

When is a realtor entitled for a commission?

Our Realtor friend has been helping us find a house.  But unfortunately because of lack of funds, we cannot outbid the homes for sale in the area we chose.  Then one day my sister just trying to help us look for a home, saw a development and suggested that we go check it out.   The day we went there was just a day to see if maybe there is something for us...  Little we know that, that day would change our lives, the builder help us plan everything that would fit our budget, to make the story short we were given a chance to have a house, that we like and can afford.  Unfortunately, our Realtor friend wasn't with us, and the seller requires that your agent should be with you  hat the time of the sale.  It wasn't planned.  We wanted the house so bad ...  Now our realtor friend wants us to tell the agent who from the new developement that if we they wont give him his commission we would back out with the deal.  All papers are signed, but our friend wants his commission.  We didnt mean to hurt him, my sister found the place, everything just fit like a glove with so much blessing that we our dream became a reality.  What should we do?  if we demand his commission, we loose everything, our friend is begging for us to help him get his commission....
  • March 21 2011 - Orlando
  • 0
    0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

Answers (51)

This happens more than you know and the builders know it that's why they have that rule in place. Can't give you a way out other than friendship seams to be forgotten in todays world, our fathers and grandfathers used handshakes and their spoken bond. Hope this helps,
  • March 21 2011
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

At the time of checking into the new development, did you fill out an information card? Usually this card or page asks if you are working with an agent.

If you completed the card, and added your agent to the information, the argument could be made that he / she is protected and the builders rep made the mistake of not including them in the transaction. 

What Dave had suggested is true, this happens all the time and it is unfortunate that a friendship could be harmed because of it. In this current economy even experienced full time agents are hurting. One lost commission really hurts.

Hope everything works out, but if you signed the builders agreement without agent supervision and input there may be nothing you could do...
  • March 22 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for Sharon Lewis
A lot of times, new communities will honor your relationship with your realtor because they know in the future the realtor or his/her company will bring other clients. The commission for a realtor is already built in to the price, so perhaps, as the builder will honor your previous relationship with your realtor.
  • March 22 2011
  • 2Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

1.  Builder should have asked if you were working with a realtor...after all if you had signed an exclusive agreement with the realtor, they would now be interefering in your agency relationship.

2.  You should have notified the builder that you have an agent...particularly since you had a working relationship.

2.  Builder should have given you a disclosure letting you know that they were working for the builder and not you, giving you the opportunity to get representation.

Builder reps are all licensed real estate agents who must follow disclosure rules...

"Friends" help each other.


  • March 22 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Also, I don't know of any builder who is doing well enough these days to lose a sale over this.  You said you would lose everything, but the reality is these guys are desperate to sell new homes.  If it were me, I would honor my friend's help and request that he be added as the selling agent.  As a buyer you ARE in the driver's seat these days!
  • March 22 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

As the other agents have stated this happens so many times. Agents need to tell their clients that they need to tell the builders rep that they are working with an agent. Some builders use to have a policy that the agent had to be present on the first visit. You should have let the builder know that you were working with an agent and the builder should have asked but did not.
  • March 22 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

The big question is did you mention you had a realtor throughout the visit and did you sign in.  Also did your Realtor ask you to sign a form to work with them only for a period of time.  Both of these would help them get paid.  Otherwise you could give them a gift certificate for their time.
Sounds like you found the perfect home enjoy!!
  • March 22 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

A commission is compensation for performing services that help you buy or sell a specific property. In this case your friend did not perform a service, nor was the procuring cause of the sale. It appears that this agent is trying to claim compensation for services not performed and a true professional would never attempt to influence you to back out of a purchase that is perfect for your family simply because he isn't getting a commission.

If you want to preserve your relationship with this agent, consider sending him some referrals in the future. Beyond that enjoy your new home with a clear conscience.

  • March 22 2011
  • 5Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for Lady Chattel
So, you find a house all on your own and do all the work and papers and such on your own and just because this person had helped you with other homes and nothing happened they all of a sudden are entitled to come to the closing and collect 3%.  This is why you never do any business with a friend and never use a friend of a friend.  Not worth it. Offer to pay the realtor some $$ under the table to buy him off and try and make nice.  Otherwise, forget the relationship and enjoy your new house. 
  • March 22 2011
  • 3Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for SoCal Engr
Friend...

"Wow, you were able to find a house that fits both your needs and mean? I'm really happy for you. If you know of anyone else who might need my services, would you do me a favor and refer them to me?"

Slezazeball...

"You what? You found a house that fits both your needs and means, and didn't think to cut me into the deal? What's up with that? If you have any moral integrity (editorial comment: "ironic turn of phrase, isn't it?") you would refuse this deal unless I can somehow make a profit too."

You pick 'em.
  • March 22 2011
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Although I understand your agent friend's frustration for time spent, the idea that a "friend" would tell you that their commission is more important than you finding a house that fits your needs seems very unfriendlike to me.
  • March 22 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

No darts but best to not give advice in matters one is not educated in.

It's against Florida Real Estate Law to pay a licensed agent under the table, talk about destroying friendship this could ruin their livelihood.

Hope this helps,
  • March 22 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

This is so common and so sad for both you and your realtor friend. It is a difficult situation you have been put in.You think you have found your dream home but are required to work with a builder who is unethical and to hurt a friendship to get this dream home. It is a hard place to be.  If this truly is your only hope to get the home you want then you have no choice but to buy the home.  You do however, have a choice to help your Realtor friend by referring as many people as you can to him. Selling homes  is how he feeds his family. He needs your help now. So refer every person you see and talk to to him so he can make up for the time and effort he has put in to help you.  As Realtors we don't always get paid in money but we can get paid in referrals.  Get your new home and do your best to help your friend sell more homes.  
Pam and Jerry Navara
Desert Eagle Properties
Las Vegas*Henderson*Pahrump*Pueblo  

  • March 22 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Upon arrival, the on-duty agent should have asked you if you were already being represented so that you would have had the opportunity to say yes OR you should have advised them that you have an Agent. The agent doesn't necessarily have to be with you but he would need to fill out a referal with them because either ways you see it, someone is going to get the commission. The builder's agent at that point became your agent since the fact that you had one wasn't disclosed.  This happens which is why I tell my Buyers that they can look around and if they find anything they like, let them know you have an agent and then contact me or vice versa. In most cases, you do have to be the procuring cause for the sale but there's nothing wrong with trying to get your friend the business for his past help.

In this case, what's done is pretty much done. If you duck out, then you are going to lose your deposit which isn't fair to you. Tell your friend to either contact the Builder on your behalf OR to graciously bow-out. He should have informed you of the proper procedure while you looked on your own. I feel it's wrong of him to place you in that position now, where you feel bad.

I agree with Pamela, refer people to him as a form of payment for the time and effort he spent with you on your search. It's the second best thing to getting paid because it can result in money and more referals.

And NO.. It's against the law to pay a real estate agent when it's not listed on the HUD at closing. Realtors get paid through their Brokers and it must ALL be disclosed on the HUD or it's illegal and he can lose his license and be penalized financially for it.
  • March 22 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

This does happen a lot unfortunately. The builder not only wants to refuse the agent's commission for the work they've done so far with you, they want to make sure you don't have representation. Some people think the entire responsibility of the agent is to find the home. A lot of the work involved actually goes into protecting the client's interests.

I've seen a case where this happened - a young lady  went into a new build without her agent, and in her enthusiasm over the beautiful showhome, she immediately signed up without her agent's representation, which the builder subsequently refused. She ended up in a situation where she had a contract on an unbuilt home that she couldn't afford, with an unlocked, increasing interest rate, and she lost her $10K deposit over it. Not only that, but this was during the boom and the price of the home was going up because the fine print said they could! She was devastated and wished she had listened to her agent about what the builder's policies were like.

This might not happen to the original poster, but I recommend that they get a professional home inspection, do a final walk-through, as well as pay an attorney to look over the finance and title work to make sure they aren't in for other surprises.

Good luck!
  • March 22 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for hpvanc
Lady Chattel,

I like your suggestion for compensating the "friend" for services rendered, or at least compensating them for expenses.  My question is why should it have to be under the table?  As far as I know there is no law requiring that all of their compensation come from commissions. 

It is that bottom feeder something for nothing commission mentality on how they render their services that give them such a bad reputation.  The problem is that most agents do not have the education necessary, and none of them work within an organization that provides the necessary reviews and oversight to present their services on a level that is consistent with a professional fee for services business model.
  • March 22 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for Lady Chattel
If the builder agent asked and refused to acknowledge it then fine, there is a grievance.  If the poster didn't disclose it for whatever reason then they messed up.  If it is a big box retailer than you have some wiggle room to go to them and say you messed up and you do have an agent.  If it is a smaller operation and you have some unscrupulous behavior then maybe not.  The builder agent may have been trying to get the entire 6% commish......yes, she/he won't have to split it with your agent......so incentive to commit a little bit of treachery. 

 I have gone through several open houses and they always ask if I am working with an agent. 
  • March 22 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for SteadyState
I guess REAs call this "earning their commission".
  • March 22 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

I wouldn't assume that if you honor your friend and insist that the builder include him in the transaction, that the builder will tell you to go away.   This is not the kind of market where that is likely to happen.   Let your REALTOR friend handle it - it's the right thing to do. 
  • March 22 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

A REALTOR is entitled to their commission when they've successfully secured a buyer for a home and a contract is executed.  If your State has Buyer Agency, then you, as the buyer are obligated to pay your Buyer's Agent the commission stated on the Buyer Agency Contract whether the seller (Builder) wants to pay the commission or not.
  • March 22 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Just curious why your agent never showed you this community? Did you ask him  ?
Is it in the same area your agent had been showing you homes....or is it out of his  area??

If it's IN the area, then shame on him  for not taking you there.......if it's out of his area, then he or she should simply wish you well,  and say how happy he is that you found a home.

A Realtor can't be everything to everyone...and can't cover every area.
I worked with a buyer for a year, and he wound up buying in another town I don't usually cover (although I could have had he told me he was looking there, too).
 Anyway - I wished him well.........what can you do...it's the nature of this busness. We parted on great terms, and he said he'd be happy to  refer people to me in the future.

As long as you don't have a signed buyer's agent agreement, you are not bound to pay him anything  - above or below the table.
By the way, any agent accepting money under the table is subject to losing their license, or more,  as it is illegal to do so.

Most new developments  (in my area ) clearly state that an agent MUST accompany the buyer to the site, and sign them in, for a commission to be earned. For whatever reason, your agent didn't do that.

I'd say...enjoy your new home..take the friend/agent out for a nice dinner and be sure to refer friends to him in the future.
If he makes too much of a fuss.........he's no friend!

Best wishes........
  • March 22 2011
  • 2Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for Alan May
One of the reasons that developers pay co-op commissions to buyers agents, is so that buyer's agents will BRING their clients to their homes for sale.

The developer will make the argument (and in my opinion, rightly so): "Why should I pay a commission to the buyer's agent, when you found the development, NOT through any efforts of your agents, but rather through my own efforts (my signage, my print ads, my television or radio commercials... etc...), and your agent took no part in our initial meeting where "the development's agent" showed you the models, and in your own words : " the builder helped us plan everything that would fit our budget, to make the story short we were given a chance to have a house, that we like and can afford."

I agree with Debra.  Your agent shouldn't be putting a wrench in the works.  Your agent should be wishing you well, and standing out of the way.  He did not show you the property (and why not?), and it's perfect for you... right?

Good luck.
  • March 22 2011
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

When the results that were promised are delivered.
  • March 23 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Situations like this happen in real estate.  Your real estate agent/friend should not be pressuring you to threaten to back out of the purchase.  This is between the real estate agents/developer involved. 

  • March 24 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

I have been a "Sitter" at builder sites even though I work for Watson. Many builder sites have their employees who act as agents and also recruit true independent agents.

My objective as a Sitter is to obtain the business. So when a prospective buyer walked into a model I was working in. I would greet them, find out if they have an agent. If they do not and I procure the business, then the builder pays me the commission, upon closing, as the Buyer's Agent.

If the prospect states that they do have an agent, then their agent would have to show up to complete a referal form in order to get paid upon closing. If there is no form completed, then he/she loses out.
  • March 25 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

This is a tough one, but it sounds as if your friend did not truly procure the sale unless you informed the builder that you had representation. With that said, I cannot imagine a builder in this market not willing to keep a deal together and everyone happy (by no means do they have to) by offering some form of compensation to your friend/Realtor, for the time and effort he presented previously in being your Realtor. He at least procured your interest in buying a home and without that they would have nothing. Go down to the sales office and present a professional and reasonable argument. If that's a no go, ask your friend/Realtor to continue to have your best interest in the transaction in exchange for future referrals. You'll find out the extent of your friendship real quick!

  • March 25 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Most new home builders have you sign in and register if you have a realtor and some even post a sign on their front door.  If you feel your realtor really has spent alot of time with you and they were the reason you went to the new home sales center then let the sales person know you want them there to help with contract, inspection of home and closing and they should approve them for the commission.  In this market, they will not turn you down.  On the other hand if the realtor hasn't help you and feels entitled to the commisssion but really wasn't the one that suggest to look at this new home development then you are not obligated. 
  • March 29 2011
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

This is extremely unfortunate, for you and your friend. However, I agree with all posts that have said, your Builder Sales Consultant should/would have asked you if you were working with a Realtor, or not? This is a MANDATORY question, that all onsite sales consultants are required to ask. Now, your friend/Realtor should have been with you but, you should have called your Realtor when you decided to go and look at this community, so he/she could have had the opportunity to accompany you. Regardless of the fact that your sister found the community online for you or not, you have to remember that your Realtor/Friend also worked extremely hard for you when he/she was showing you other properties, that you inquired about. He/She deserves to be paid for his/her services. Having said that, the Builder will not add your Realtor to the contract after the fact....this is the normal practice of most Builder's so, telling them that you will walk away from your contract unless they add your Realtor to the contract, will NOT work. Builder's have IRON CLAD contracts which state very clearly, that they will retain ALL of your security deposit if you don't close as scheduled, for ANY reason. So in this case I am sorry to say, that your Realtor/Friend will NOT be getting paid as your representative.
  • May 29 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Sorry....I meant to answer your direct question first......"When is a Realtor entitled to a commission?" The answer is....the moment any individual asks that Realtor to find them a home and he/she, spends time researching and showing you any property(s). Please remember, ALL Realtors work for you free of charge and only recieve compensation for their hard work, AFTER you have purchased and closed on a home.
  • May 29 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.



FYI when working with an agent or Realtor NEVER EVER goe into any site or new build development unarmed. They can't wait to cut the Realtor out of the mix, and the selling agent double dips or the builder eats the profit. The client, or consumer does not get the house for any less and without your own representation, a lot of the time you are believing all you are told from a very, very one-sided biasedsource. Many agents have had this happen to them. IF you signed a buyer broker agreement, your agent would be entitled to their commission regardless, meaning if it went to court it would come out of your pocket. Since the agent is a friend of yours, doubt that would happen, but it could. Best of luck.
Spirit



  • May 29 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

  1. 1
  2. 2