The situation: Mr. Smith (the Buyer) hires Buyer Agent to represent and find homes for purchase. Buyer Agent finds home for Mr. Smith which is offering an additional $1,000 commission above the typical 3% to the Buyer Agent. Should the Buyer Agent disclose to Mr. Smith that he was offered the bonus?
Issue here is whether a conflict of interest exists or if Buyer Agent is free to negotiate with the builder for his/her commission without any notification to Mr. Smith.
What should Buyer Agent ideally do here?
2007-02-21 16:28:57 · 7 answers · asked by bud 1 in Business & Finance ➔ Renting & Real Estate
I feel, there is no need to disclose the extra bonus to the buyer, unless explicitly asked
2007-02-21 16:51:53 · answer #1 · answered by Anonymous · 0⤊ 0⤋
1. "Hires Buyer Agent" means what? If there is a contract then the contract should be reviewed to see what it says about the commission.
2. The closing statement will show the fees paid to the brokers. That may or may not make it clear what share the actual agent is getting.
3. Best policy is full disclosure. There is no reason that the buyer should be kept in the dark. The question implies that the agent is concerned that the buyer will think the agent was compromised or otherwise influenced. That alone is a reason that there should be full disclosure.
4. Flip it around. Is there a reason the agent would not be happy for the buyer to know? If so, why? If that is the case then refuse to take the extra payment.
2007-02-22 04:57:52 · answer #2 · answered by Anonymous · 0⤊ 0⤋
First of all why would you not want to disclose to Mr. Smith that the builder is offering 1k bonus. Does your contract with Mr. Smith allow for Mr. Smith to lower your rights to commissions?
Your best bet in any real estate transaction is to have a good solid contract with your clients and or customers specifying what you can and can not do relating to commissions, in addition in all real estate transactions disclose, disclose, disclose you have nothing to hide. You are there to serve the customers and or clients accomplish what they hire you to do but you are not Mother Theresa and you will attempt to accomplish what you are under contract to do and make the most money possible without that ability interfering with the customer or client's goals and financial situation.
Buena Suerte
2007-02-22 08:25:54 · answer #3 · answered by newmexicorealestateforms 6 · 0⤊ 0⤋
Unless it is legally required, I see no reason that the buyer's agent should disclose their commission to the buyer. Commissions are typically split 50/50 when there are different seller and buyer agents, but if either one can negotiate a better amount for themselves, more power to them.
2007-02-22 00:38:28 · answer #4 · answered by Brian G 6 · 0⤊ 0⤋
Usually this is published information and in California there is a contract which shows commission offered. Honestly, a buyers agent is going to show her clients the best houses for them and the ones with the highest commission paid. My realtor gave us a copy of the multiple listing service and it discloses all that info.
2007-02-22 00:34:29 · answer #5 · answered by travelguruette 6 · 0⤊ 0⤋
Any money dispersed in the course of a purchase transaction must be disclosed on the Settlement Statement. If the realtor is getting an extra $1K 'under the table' from the builder, that is a kickback, and illegal.
2007-02-22 00:34:59 · answer #6 · answered by Omni D 5 · 0⤊ 0⤋
No the commission does not have to be disclosed.
I work just as hard for my client for a 1% commission as i will for a 4% commission with a thousand dollar bonus. I don't feel it is any of their business what I am making because they are not paying me.
You legally have to tell them nothing about your commission.
2007-02-22 18:17:47 · answer #7 · answered by frankie b 5 · 0⤊ 0⤋