Res Ipsa wrote: ↑Tue Mar 19, 2024 11:19 pm
Sorry, I should have specified that the split could be 100-0 or 0-100. But am I correct that, once the listing agreement is signed, the buyer's agent cannot negotiate the split stated in the form?
It rarely happens, but if the buyer's agent has a problem with the commission split they'll let the seller's agent know before an offer is sent. Occasionally I'll hear my wife on the phone with a listing agent asking why the low commission, and without exception the other agent expresses empathy and explains that the seller didn't want to pay more than 5%, hence the reason for only 2% to us and they kept 3%. But on one occasion I a buyer's agent split her commission with us down the middle when she didn't have to. When she read the commission agreement, she realized she was getting 3% and we were only getting 2%, and she insisted we split it down the middle at 2.5% each. So usually a week before closing the attorney will ask us to provide the "Commission Agreement" signed by both agents. Officially it is known as the Instructions to Closing Attorney (ITCA) form. That form details how the commissions are split so the attorney knows how to print the checks at closing.
Thanks! Seeing the document really helps. I know enough about real estate to know that the seller has always been able to negotiate with the listing agent over the percentage of the commission. I really didn't understand that part of the plaintiffs' argument.
Exactly! That's what's so frustrating about this and finding out it was settled without an appeal pissed all of us off. I mean, NAR has "left us out to dry" according to our broker. For years we've been paying to be members of NAR for reasons such as this and the case seems like it should be a slam dunk for any attorney who knows what he's doing, but instead they blindsided us with a settlement after telling us not to worry because an appeal was happening which would delay any real changes for at least 2 years.
Again, thanks for the document. If use of that form is uniform, I'm not seeing the problem. In practice, is it common to actually put a percentage in the form other than 0%? In your experience, how often does the buyer pay his agent over and above the amount his agent receives from the seller's agent?
Yeah, from what I understand Georgia's procedures are already more in line with what the plaintiffs have been demand Missouri start doing. It just sucks that we all have to pay for their sloppiness.
If you've only had one person ask you how you get paid when acting as a buyer's agent, is it standard practice to just put 0% in the written agreement?
Yep that's all I ever do. I've never been in a situation where a buyer absolutely had to buy a house that didn't offer any commission. But because of the national hype around this settlement, and the media spreading misinformation about what it means for home buyers, I think those situations are going to become more common than we'd like.
I can see how a jury could be persuaded that the customary practice was non-competitive, but, like you said, the buyer should understand that they are in fact paying for everything because they are the only party bringing money to the transaction. I am skeptical about the claims that these changes will have any substantial effect on housing prices.
Yeah, and that was an argument they put forth that seemed to resonate with the court. All of us were just wondering from the sidelines what the hell our attorney was doing in response.
Thanks for taking the time to bring me up to speed. I had a hard time figuring out exactly what was going on from press articles, and even reviewing of the complaints wasn't that helpful.
Thanks for pitching in with your input.