If a buyer's agent works for the same broker as the seller's agent, (same transaction) but doesn't take any fee whatsoever from the buyer, then is he just splitting the commission with the seller's agent?

(He must be getting some $ from somebody...) If so, is this legal?

It is called a co-op fee and yes it is legal. Why on earth would it not be legal????????????

And why do you ask........could it have something to do with you real estate misfortune?

Yes - according to a barely legible photocopy, he was acting as a buyer's agent. The light dawns over Milwaukee....


(That's a joke, right?? You know how gullible I am.)

???????

Well, I know no background to this story.

But just to let you know, for instance... I have NEVER taken a fee from buyers. It's not wrong to do; it's just that that's not how I run my business.
When I have brought my buyer to a home listed by my broker, and sold it, I have received a co-op fee from my broker.
When I have brought my buyer to a home listed by another broker, and sold it, I have received a co-op fee from the other broker.
That is the way the majority of transactions occur in this area.
--A

I just know that in many states, it is illegal for an agent to recommend a house inspector, and I of course assumed that the same would apply to buyer's agents accepting money from the seller's broker. Think of it. The buyer's agent doesn't get paid unless the home sells.

As I said in one of my blogs, it's just a "Scam waiting to happen." (Not to imply that you are scamming anyone. Those of us who are honest often have trouble imagining that there are crooks around)

I would imagine that in California, it would be illegal.

I only know of one state, Massachusetts. Is Maine also one? Do you know of any others?
The amount of a buyers agents co-op payment is identified in the MLS by the listing broker for everyone to see. In the event that the buyer pays their agent, the agent is not entitled to receive a co-op fee without their buyers permission. I don't know of any agent trying to collect from the buyer and the listing broker, the buyer would be very upset at closing to see on the HUD 1 that 2 fees are being paid his buyer agent/broker. (remember, all monies go the the broker and not the agent directly)

Not sure where you got that it's illegal to recomend an inspector. It would be, I believe, illegal to stipulate that a certain inspector must be used.

Usually, no one gets paid unless the house sells.

"Real estate brokers and salesmen may not directly recommend a specific home inspection company or home inspector unless representing the buyer as a buyer's broker. Brokers, however, may provide assistance to buyers in accessing information on licensed home inspectors."

http://www.mass.gov/dpl/consumer/fspagehi.htm

That could be the difference. When I first got scammed, I researched inspectors and their relationship with agents. I read that it was illegal in most states for an agent to recommend an inspector - but it must have said "Seller's agent"

Until this week, I thought that the agent who conned me was a seller's agent. I asked him about getting a buyer's agent, and he hemmed and hawed and told me that everything around here was pretty informal.

When he recommended the inspector, I still thought he was the seller's agent, since they both work for the same broker, and it was this agent who pointed out the home to me.

I think it was only at the closing that he snuck in the paper with the tiny check box indicating that "Yes" he was a buyer's agent. (In fact, I wonder if it was the paper that they had to call me back after the closing to initial. They said they'd "forgotten" something.)

But by then, the crooked inspector had already done his thing.

I just found out this week that this broker is being sued by someone else nearby - not sure what for. I suppose that happens quite a bit in real estate.

Thanks very much for the valuable and interesting info.

In Texas this is called intermediary. The SELLER pays the commission and is split with the BUYER's agent. It totaly legal.

In the setting of INTERMEDIARY the buyer's agent works FOR THE BUYER. The listing agent works for the SELLER. It's complely ETHICAL.

It may be legal, and in some instances it might be termed "ethical", but in a town like Bangor, ME, you might as well cover yourself with honey and lie down on an anthill as trust any real estate agent.

So why one earth would anyone trust a buyer's agent who does not get paid unless the property sells?

Ahem: If the property does not sell, then he does not get paid.

(Has anyone smelled the coffee yet?)

This is why:
Fiduciary Duties Of A Real Estate Agent
A real estate broker who becomes an agent of a buyer is deemed to be a fiduciary. Other examples of fiduciaries are trustees, executors, and guardians.
As a fiduciary, a real estate broker is held by law to owe specific duties to his/her principal (the person who they are representing), in addition to duties or obligations set forth in a buyer representation agreement, or other contract of employment. These specific fiduciary duties include:
· Loyalty
· Obedience
· Disclosure
· Confidentiality
· Reasonable Care and Diligence
· Accounting
Loyalty
One of the most fundamental fiduciary duties an agent owes to the principal. The duty obligates a real estate broker to act at all times, solely in the best interests of the principal, excluding all other interests, including that of the broker.
An example of breach of loyalty is when a broker purchases a property listed with his/her firm, and immediately resells it at a profit. Such conduct is usually considered appropriate and lawful by persons who act at arms length, but a fiduciary would be considered to have stolen an opportunity for profit that rightfully belongs to the principal.

Obedience
An agent is obligated to promptly and efficiently obey all lawful instructions of his/her principal that conform to the purpose of the agency relationship. However, the duty does not include an obligation to obey unlawful instructions, such as instructions to not market a property to minorities or to misrepresent the condition of a property.


Disclosure
An agent must disclose to the principal all known relevant and material information that pertains to the scope of the agency. The duty includes any facts affecting the value or desirability of the property, as well as any other relevant information pertaining to the transaction, such as the other party's bargaining position, the identity of all potential purchasers, information concerning the ability or willingness of the buyer to offer a higher price, any intent to subdivide or resell the property for a profit.
An agent's duty of disclosure to his/her principal must not be confused with a real estate broker's duty to disclose any know material facts about the property value to non-principals. The duty to disclose known material facts is based on a real estate broker's duty to treat all persons honestly. The duty of honesty does not depend on the existence of an agency relationship.

Confidentiality
An agent is obligated to safeguard his/her principal's lawful confidences and secrets. Therefore, a real estate broker must keep confidential any information that may weaken a principal's bargaining position. The duty of confidentiality precludes a broker who represents a seller from disclosing to a buyer that the seller can, or must, sell a property below the listed price. Conversely, a broker who represents a buyer is prohibited from disclosing to a seller that the buyer can, or will, pay more than what has been offered for a property.
The duty of confidentiality does not include an obligation by a broker who represents a seller to withhold know material facts about the condition of the seller's property from the buyer, or to misrepresent the property's condition. To do so constitutes misrepresentation and impose liability on both the broker and the seller.

Reasonable Care and Diligence
An agent is obligated to use reasonable care and diligence when pursuing the principal's affairs. The standard of care expected of a buyer's or seller's real estate broker is that of a competent real estate professional. By reason of his/her license, a broker is considered to have skill and expertise in real estate matters superior to that of the average person.
As an agent who represents others in their real estate dealings, a broker or salesperson is under a duty to use superior skill and knowledge while pursuing the principal's affairs. However, no broker is expected to perform tasks or know information outside the scope of his/her real estate license. Real estate licensees are not expected to perform services normally provided by engineers, lawyers, accountants, or other professionals. If concerns arise outside the scope of a broker's responsibility, the broker should acknowledge that and suggest that the principal seek assistance from a reliable outside source.

Accounting
An agent is obligated to account for all money or property that belongs to his/her principal entrusted to that agent. The duty compels a real estate broker to safeguard any money, deeds, or other documents entrusted to them relative to their client's transactions of affairs.

But of course!! That's even better than the Cub Scouts. (Or the Kiwanis - whose official was the very agent who conned me:

Kiwanis Objectives:
1. To give primacy to the human and spiritual rather than to the material values of life.

2. To encourage the daily living of the Golden Rule in all human relationships.

3. To promote the adoption and application of higher social, business and professional standards.

4. To develop by precept and example, a more intelligent, aggressive and serviceable citizenship.

5. To provide through this club, a practical means to form enduring friendships, to render altruistic services, and to build a better community.

6. To cooperate in creating and maintaining that sound public opinion and high idealism which make possible the increase of righteousness, justice, patriotism, and good will.)

Pike's Peak, (are you a skier? Me too.)...

I want to live in YOUR world!!!!

Typically, no agent gets paid until a transaction closes. And then payment goes to their broker, and the broker pays the agents.

So...no sale....no payment.

The next time I ask a fox to guard my hen house, I'll ask him PLEASE not to eat any chickens, since that would be unethical.

I'll wait and see what he does.

Of course, the only creatures policing this fox are the OTHER foxes, all salivating for a piece of drumstick themselves.

Ah hem. Excuse if I don't boil the water for my chicken soup! ;-)

As I said before --- "Just a scam waiting to happen"

Look, an ethical buyer's agent who has an agreement to help you find a house gets paid whenever you buy ANY house. So it is in his interest to make sure you get the best house you can afford. That way you will tell your friends how great he was and he will continue to find clients. If he worrys about how to sell you one piece of crap house just to get a quick commission then he is not an ethical "buyer's agent". I know its hard to find that type of agent but I think they exist.

Real estate agents don't get paid until they sell something. This is a surprising revelation somehow?

Deepsea - that's why a buyer's agent should be "Fee paid" - by the BUYER. (Are you saying it's hard to find an UN-ethical agent???)

In everyone else's sceanario, the buyer's agent gets paid by the seller, yet nobody can see any conflict of interest??

They'd better stay away from this town. They'd lose their bloomers in a heartbeat.

Where are you getting that it's a conflict of interest?

In the most basic terms I can come up with to explain how this works:

Seller wants to sell a house. Signs a listings agreement with a listing broker for 10%, and decides that half (5%) will be offered to ANY buyer's broker upon completion of the terms in the listing agreement.

I guess I'm still not getting it. WHo had better stay away (buyer's agents?) and why would they lose their bloomers?

It is not surprising that everyone seems to be unable to make Lost in Maine understand this most simple concept.

Lost in Maine has an axe to grind as she says she was misrepresented and lied to by All involved in the purchase of her mobile home in a trailer park.


Lost in Maine,
If everything you say is true then I find it very hard to believe that there is no attorney in the state of Maine that would accept your case pro bono!

Every word is true......sigh .....I want to live in YOUR world, too.

Things are different up here. Most people don't even know how to use computers. When the Board of REALTORŪ's "Ethics" committee forwarded all of my personal and professional email to the accused REALTORŪs involved, the CEO thoughts that the emails were coming directly from ME, since he didn't know how to use a computer.

So he threatened to sue ME for harassment, and brought up this fact at the hearing, and so "outed" his own accomplices.

Towns like this are owned and operated by extended networks of "Good Ole Boys" - and they have been like this for generations. People break laws unthinkingly, (Maine ranks #50 in the nation for enforcement of laws, even where they do exist) and, with the proper connections, people just assume that they will get away with just about anything.

Folks around here stick up for one another, no matter what.

http://www.maine.rr.com/05/portmag/hunting/default.asp

This is not your mother's America.

WOW, Glad he is not my client!

Should you have an issue take it up with the State where your agent carries his license. Frankly though it sounds like you are bored and just trying to cause trouble.

You must be joking. This is Maine - I'm told the most corrupt state, (next to Georgia, but I don't know personally...)

Newspapers, TV, every form of mainstream media are in the pockets of the players, and the blogosphere around here is so right wing.

In Maine, it's perfectly legal for a real estate agent to put his real estate sign on the lawn of any mobile home in a park, take you into his real estate office, fill out the real estate purchase and sale agreement, and all of the other legal real estate forms.

You then get a legal real estate tax bill on a legal real estate form, which you are expected to pay with legal tender.

However, what nobody bothers to tell you, because they're not required to, is that your home in the park is still not considered "Real Estate", so the Real Estate Commission has no authority. (And one wonders whether they would use it if they did).

They can break any law they want, and thumb their nose.

And you've read what the Maine Branch of the NAR is like. (I've affectionately dubbed mine the Bangor Board of BIMBO'sŪ - just a personal opinion mind you. )

And even if it were illegal to do these things, I don't think anyone would enforce it.

In Maine, the Attorney General (unlike the other 49 states) is selected by secret ballot by the legislature, which is in turn put in power by the wealthy developers and REALTORS. He is available for 5 minutes a year to film a public service message. That's about it.

The people who own this trailer park are the self professed biggest single taxpayers in the state. And everyone in town tells me to give up hope.

Maine has the highest rate of domestic violence in the country, the highest rate of teen suicide, and one of the highest rates of drug and alcohol abuse. It's a troubled place.

As I said - it's NOT your mother's Amercia, and it's too bad that something couldn't be done.

MAYBE WE CAN SELL IT TO JAPAN! ;-]

(Sorry about the rant. A friend of mine was just badly hurt as well....)

I had to edit this post to say that it also has some fo the most AWESOME people in the country. Maybe the nice ones have learned to be twice as nice to compensate.

Here's praying that the best win out.

I've listed and sold a few mobile homes, with my sign in front of them. I explain to buyers that a mobile home is not considered real property, it is personal property. In my state they are considered motor vehicles. That is why most banks won't mortgage them. I find they buyer the seller signs the registration or title and the seller gives me my commission. I don't like selling mobile homes, but people sometimes ask me to list them. IMO, the best thing about selling a mobile home is you can be ruthless in qualifying the buyer. If they don't have the cash for a downpayment and financing in place ahead of time it's pointless to show the home. I don't know what you mean by "you get a real estate tax bill".

Why should it be illegal for me to sell a mobile home? I'm ignoring all the red herrings in the post, though, I don't know what they have to do with selling anything.

No red herrings here, - only facts.

I pay regular (quite high) real estate taxes, even though my home is on rented land.

I'm glad you're honest. Even in this town, honest agents do exist.

I mistakenly asssumed that MY quite dishonest agents and the REALTOR involved were acting as licensed professionals, and were honest.

But they did not even NEED a license for my sale.

I'm sorry I was mean and lost my temper. I find this all very hard to believe, too..... (that's what's so strange and weird.)

But I will find a way out, and what goes around comes around.

Thanks.

Hey --PS --REO Dayton---I'm NOT bored. I guess that's a good thing, LOL--at least this not boring!

(Maybe I can write a book)

Why do you feel Compeled to continue to come to this forum to whine about your situation?

Just pack up your stuff and go rent an apartment! Send your lender the keys and a letter telling them to come and get it! Then get on with your life!

Best. thread. evah. I am rofl!

So you say there's a high rate of drug and alcohol abuse in Maine, eh?

I happen to do a lot of volenteer work at my local homeless shelter, and they do not have access to the internet this freely. I talk to the men and women there and I help them look for jobs and develop computer skills. Resources are limited, so please get off the computer and allow sombeody to us it for development then instead of complaining.

Sorry all, I see though, that homeless is walking the streets in 12 degree weather with no place to go.

So do I.

I built and donated an entire computer system to a non-profit, and have already given the equivalent of 4 month's current pay to a local shelter, and have been working on a system for them, as well as hoping to coerce the local cable co into some free broadband.

The main thing to focus on is full disclosure to your client.

Maine doesn't have many laws to protect people, and it ranks #50 in the nation for enforcement of the laws that do exist.

Disclosure would have been awesome. An ounce of honesty could have prevented a ton of suffering.

But this small town newly certified agent was all full of the fact that he had just started working for the state's (self professed) "Biggest taxpayer" - he was all giddy about it.

I must have seemed like a very insignificant little gnat to him.

I'm hoping at least to use my situation to help prevent it from happening to others.

so then....why didn't you offer to pay your buyer's agent an up front fee for their services? There's nothing stopping you from doing that...

I know if I had a buyer come up to me and say "I'd like to buy a house for $200,000 and I'd like to pay you $6,000 (3%) up front to help me find it (by the way, that's non-refundable, and not contingent upon your purchase of a home)"

I'd be pretty excited about the proposition.

That seems to be what you're saying you'd like to do...right?


Personally when I work as a Buyer's Agent, I have a Buyer Broker Agreement that says the buyer is to pay me X% that has been earned when a contract for Purchase & Sale has been written within the terms of the agreement. Any co-broke commission paid by the selling office shall be rebated to the buyer at closing...but flat fees paid up front wouldn't be bad, either...