I went to an open house and the Agent (agent A) present was also the seller. I called him and told him I would like to see the house again. He told me that he would send the listing agent (agent B) that is a friend of his to avoid conflict of interest. I met the listing agent (agent B) and told him that I would like to make an offer at a 490k and that I would be willing to use him as an agent for the lower price. I later met with an agent (agent C) I normally use and he said he didn't advise this. I then submitted an offer using my normal agent (agent C). I got a text message back from the Agent (Agent B) I met at the house. He said that he was doing the sale for free for the seller. He said the seller would do the deal for 495k if I used him (agent B) as an agent and 507k if I used my agent (agent C). Basically putting they money from the commission in the sellers pocket (agent A). My problem is that the appraisal came back at 500k. Although it is below my purchase price I feel like I am being cheated and not properly represented and could have used the agent o choice and felt better represented.
Here is a basic thing that most buyers don't understand. All the agents in a typical sales transaction are working for the seller, unless a buyer has an exclusive representation agreement with a broker. And if that person only gets paid from the deal, then it's difficult for them to truly br your advocate, no matter what the paperwork says. .
Real estate agents hate it when attorneys point this out. BTW, I'm a licensed CA broker.
I recommend you ask yourself how much you like the property, and whether on some basic level you are pleased with the deal. If you love it and paid a reasonable price, don't sweat the little things. The real challenge is that sellers call the shots in today's market.
Next time you buy real estate, if you want to avoid feeling underrepresented, hire an exclusive representative and pay them whether or not you buy something. That's the only way to get the kind of loyalty and objective advocacy you are seeking.
Yes it is legal. The seller pays the commission and if you do not have your own agent the seller does not have to pay a commission at all. Because the seller would not have to pay a commission, the seller can sell the house for less money.
Whether or not you are being adequately represented is a different issue. You may or may not. The sellers friend might be doing a great job or not. Hard to tell.
Kevin A. Spainhour, Esq. - Hopefully this information is helpful. My answering this question giving my general thoughts does not create an attorney/client relationship and is not a legal opinion. The only way to create an attorney client relationship is to retain our services with a written retainer agreement signed by an officer of our firm. More information regarding our services can be found at www.oslawyer.com
Yes, it's legal. You are entitled to the representation of your choice. And the seller is entitled to sell the home at the price of the seller's choice. The seller's only obligation with regard to a buyer agent is that the seller must pay the commission they promised in the MLS (if the property was even listed on the MLS). However, a commission can still be negotiated (up or down) prior to entering a contract, or during a contract. You also have a self-help remedy -- you can hire your own legal representation (a real estate attorney) that you pay. With your own lawyer assisting you to review/edit documents and answer your questions, you would not feel cheated, but empowered and informed. I hope this response has been helpful.
The owner of a property that wishes to sell may engage any listing agent/broker that he or she chooses. As other counsel have said, the seller pays all the commissions, and has the right to hire whom he or she wishes. Buyer's agents negotiate with the listing agent for a share of the commission paid at close of escrow. In the old days, the split used to be 50-50 but times have changed, and the listing agents generally insist on a greater fraction of the commission.
Frankly, I don't see how you can claim you have been cheated. You chose your own agent, who may or may not be doing his/her job, and the issue appears to be price, about which your grievance is difficult to understand from your facts. Perhaps you should have a discussion with your agent to determine whether he or she shares your priorities.
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