I am so upset! I have been working w/a friend on finding him a house, sending emails, directing him to get pre-approve etc. Today he calls me that he got a townhouse, I asked what do you mean "you got", he went on to tell me he signed a contract & I asked with whom, an agent, he said yes. His excuse is that he did not know that the listing agent would get double the commission. Even though this might be true, which I know it happens, I don't quite understand why you would not even ask your realtor friend for advise on the purchase! I wonder if the listing agent asked if he had a realtor, I always do. Yeeh, I just lost out on a good commission $260k selling price. Oh, one more thing, it seems that the listing agent referred him to a lender so all my wasted breath and advise did not count for anything. Well, I will just brush it off & move on. I am still going to work with him on selling his other house, if it happens.

When I started my broker told me horror stories about such as this. To myself I thought this would never happen to an agent like myself. Then a close friend at church listed his home with another agent!

On the other hand, I am sure some of my deals came at the expense of other local agents. Just part of the gig I guess.

Yes that hurts. It's hard to get over even especialy if he is your friend. It's more then just the loss of commission. It's like betrayal. Some people don't listen even if you explain how you work. As all they care about is them and you are just a tool. I had one aquaintance list with someone else at my company and then tell me they thought it was alright since it was the same company. Right after I had asked them if they knew anyone looking to buy or sell real estate. They took my card and then called the office and just asked for an agent.

Ouch, that hurts. Good attidute, bursh it off and move on.

Barbara

The fact is many of our friends and family do not relize how we are paid. I had a friend use an agent from my company and the deal went sour and he called me. Others know how we are paid but thing they know more that us and tackle it on their own.

I work friends and family SOI wise. If I had to count on them to survive I'd be dead. I use them to get the info from their SOI to add to mine.

I had one friend that bought a house make a comment about how much I made from the sale (on the surface it was alot). I had to break it down to him that the check belong to my broker, he gets a cut. From that which I get, the Government gets a cut. From that I have to maintain an office, market, drive around all day. maintain board fees. From that I get paid. In reality I needed to submit him a bill.

To sum up what ColoBroker said - ""The majority of people do not give a flying cow chip about you or your bank account"" Friend or not. They live in 'Me World'. You will do very well in this business if you can competely disconnect your emotions and work it as a numbers game. BigC

WELL SAID BIGC!!!!!

"His excuse is that he did not know that the listing agent would get double the commission."

I really hate to say this but it sounds like you dropped the ball. What do I mean by this? I mean agents seem to give buyers "just enough" information where the agent feels OK about the situation.

What you need is a process EVERY TIME with all buyers that you go through. Systems help you to not forget a step and ge tpredictable results because you do things the same way over and over. It also helps if you bring in team members because you know the process works and you just need them to implement it from now on.

I hear the same questions from buyers and sellers over and over again. It might be the thousandth time you have answered it but the first time a buyer or seller has asked it.

Many buyers do not know about double commission,procuring cause,agency client or customer relationships etc.

You need to make up a buyer orientation folder and go over this with a buyer at your initial meeting and then give them a copy. Also need to put a copy on your website for buyers so they know what to expect in the process.

I also hate to see thie "Listing agent gets double the commission" or "double dipping."

No. Listing agent doing both sides gets 100% of the commission - full commission for doing both sides of the transaction.

The seller agrees to pay N% for the house getting sold.

The listing agent only gets a percentage, sometimes half, sometimes more, sometimes less... of the commission when someone else sells it.

One of my clients has asked us to cut the commission by 2% if I sell it myself. Therefore, you do not know that the other agent is even getting the full commission...you do not know the agreement the agent has with the seller. It could very well be that he is only getting a tiny bit more than if it were co-broked.

[/rant]

That said, I'm sorry your friend cut you out - that sucks, big time.

Ouch....this is the emotional stress part of the business that really sucks.

It is our job to educate our clients - and I say that because you need to make them clients with a Buyers Rep Agreement, otherwise they are nothing but a customer/acquaintance - about how we are compensated. They need to know that you are a business owner and that you have expenses related to that.

Make your business a more formal arrangement and people will respect your time and effort more. Even if they are your friend, you need to formalize your professional relationship with them. You wouldn't list a friends house without a contract. Don't help them look for one without one, either!

Live and learn!

Thanks guys, yes from now own I will better educate my buyers and when this occurs I know that they were aware of it, no excuses.

My daughter was looking for an apartment a couple of years ago and said "so I called the name on the Coldwell Banker sign"...........!!!

What! She admittedley didn't grow up around the real estate talk that my 2 younger ones did but still!

People just don't get it until you explain, in detail, again and again. Believe me....She understands now! LOL

Wow! I know the feeling. Just happened to me. I helped a customer get qualified by suggesting what she could do to clear up her credit for 1.5 yrs, showing her property, etc.. Then she says she will ride past my lot gain and if she likes it she will put in an offer. Get this, she did put in the offer......through another agent! She had also been working for him 1.5 yrs. I couldn't believe it. Yes, I get half because it's my listing, but I could have gotten it all.

All I can say is, IT happens! You can replace the IT in the sentence with anything you like....lol

Had similar one a few years ago.

Buyer was referred to my by a referral agent, a retired broker who kept his license active for referrals only. Was a cousin or 2nd cousin, also over 70.

Goes to see daughter, sees FSBO up the street, knocks on door, makes offer. FSBO brings out a blank xerox copy of a board contract, fills it out, checks no on all contingencies (including inspection and mortgage), gets buyer to write $10,000 check to seller.

Next morning I get a frantic call "Get me out of this".

Buyer didn't listen to his cousin with 40 years in the biz, didn't listen to me.

My advice - Go See a Lawyer Today

It's an education - sometimes priced like Duke or the other Ivy League up North - as it seems the more it cost us the better everything sticks with us

I just hate paying the price of Duke - or that other Ivy League - and not even get a diploma

Everytime I hear thee stories, I think of asking for a deposit from the buyer! I know its' not going to work, but maybe I can cut my losses right at the beginning.

Like someone just posted, its' a numbers game.

On some level, I wish our profession could be more like the doctors and lawyers of the past, instead of doctors and lawyers of the present.

It is a pain, but forget it and move on. Years ago I would dwell on things like for a long time. I then realized that I could spend a ton of time and energy focusing on the negative or I could just move forward and shift the focus to something positive. Good luck and remember there is such a thing as karma : )

Our Exclusive Buyer Agency Agreements allow for a RETAINER to be paid at the time of signing . . . . just a little blank space with a $______ to be filled in (or marked N/A); but most Agents are afraid to ask for it. I take it and I spend it.

So your friends bought from another agent. You thought they were friends. Guess what. I thought that I had a bunch of friends too. I know better now. I don't waste my time emotions on any of those. I just write them off.

Yep! Write off an entire friendship! Absolutely!

*sigh*

Even my friends need to hear me say, over and over, "I work entirely on a commission-only basis. If people don't buy and list with me, I don't get paid."

That's a clear statement, and I accept the fact that it is my responsibility to give them a chance to help me earn a living! If a true friend messes up and causes you not to get a commission, they feel lousy. Protect them and you. Say it often!

Not only that lizl, but they need to understand that you OWN your business. You don't take home the whole sum listed on the HUD. They need to know that you have overhead expenses and that the money gets divided up in many directions.

I tell my clients that I only take home about 30% of my commissions - that the rest gets reinvested in my business or paid to 1600 Pennsylvania Ave. When they come to understand that, their perspective changes dramatically and you are no longer an overpaid profession, but just another Working Joe like them.

[quote=zpcsc]I am so upset! I have been working w/a friend on finding him a house, sending emails, directing him to get pre-approve etc. Today he calls me that he got a townhouse, I asked what do you mean "you got", he went on to tell me he signed a contract & I asked with whom, an agent, he said yes.[/quote]

I have to agree with Super Agent on this and this is a good lesson for all agents to learn. When working with friends it is important to establish a business relationship in this process.

[quote]His excuse is that he did not know that the listing agent would get double the commission. Even though this might be true, which I know it happens, I don't quite understand why you would not even ask your realtor friend for advise on the purchase![/quote]

Look at your language here. "His excuse"? The way I see this is that he acted out of ignorance and it is the agents job to educate. It is up to you to create the atmosphere where the client feels he is working with you in a business relationship rather than a friend to be called for advise. He might even be in the mindset that he doesn't want to 'bother' you with his personal issues.

[quote]I wonder if the listing agent asked if he had a realtor, I always do. Yeeh, I just lost out on a good commission $260k selling price. Oh, one more thing, it seems that the listing agent referred him to a lender so all my wasted breath and advise did not count for anything.[/quote]

If it wasn't for learning the hard way I would have no learning at all! ;-)

[quote]Well, I will just brush it off & move on. I am still going to work with him on selling his other house, if it happens. [/quote]

Don't just brush it off, you have spent a lot of money on this learning experience, use it. Since this is a friend of yours, use the opportunity to understand his thought process in a non judgmental way in order to help you learn how to communicate more effectively with future clients (which will also help you build the business relationship back should he decide to sell his other house). Set up a system like Super Realtor suggested and educate your clients and get commitments from them before you put too much work in.

This is why I prefer not to work with friends. I don't solicit them and when they ask for advice I give generic answers. It is only when they insist that I will take on a friend as a client.

Clients are way easier to find than friends and it isn't worth risking a friendship over money. I don't borrow or lend money to friends either.

i would rather loose a transaction than a friend!

reality is that htey might not want you in their business. the fact taht some make them feel guilty for not using them to make money does not help a friendship.

if your friends think that you need them to buy and sell with you to pay your bills they might question wether you are their friend to pay your bills or because you like them as a friend.

everyone has had an unrealistic seller or buyer. if your friend is an unrealistic seller or buyer can you, will you fire them? if you do you could loose a friend. if you listen to their unreality the home they want ot buy wont get bought. if you listen to their unreality the home they want to sell wont get sold. problems happen to often and it is not worth looseing somoene who is a real friend. let someone else work with them and preserve a friendship.

prospect strangers for business. if the deal goes south you dont loose a friend.

without an eba a friend is a customer. they have no obligation to use an agent no matter how good a friend they are.

when someone walks into a house and does not buy it they have thier reasons. sometimes they dont tell you the real reason they did not like that house. sometimes when a friend uses another agent they dont tell you the real reason why they did not use you. if you dont solicit them you and them dont have to risk a friendship over money. listen, heres the deal. our business grows because we do more deals. the secret to doing more deals is not to have more friends. the secret todoing more deals is to learn how to find more buyers and sellers. that will increase your business.

imagine if doctors or lawyers or auto mechanics ran an soi business! rofl

we are tought to work soi becasue it is easier than learning how to market and having the proper presentations, scripts, dialogues to show a stranger why they should be a client.

to do more deals we need more buyers and sellers, not friends.

i had my basement remodeled. i used a friend. the job went over budget and over time. i would have fired him but did not because i did not want to loose a friend over money. sure, i got screwed, but i'm not worried about the money and realize taht i should have hired someone else. lesson learned.

work with strangers. make it 100% business from start to finish. prospect your clients for more buyers and sellers. we are salespeople.

It's really a shame that friends and family all too often forget you when it's time to buy or sell. No matter how much you try to educate them, some will still stray.
I have learned not to dwell on it. Just remember," Reach for the stars, even if you have to stand on a cactus "

I noticed that our business filters out the friends that you thought were real from your true real friends... good for us in the long run anyway.

the reality is that if somoene knows you are in the business and uses someone else....there is a reason!!!!!!!!!


think about how that sounds..

john, i only get paid by selling houses, so instead of you finding hte best agent for teh job, i want you to use me because we are friends.


if john thinks you are a rockstar agent, he will seek you out.




what i hear is this.....

if you dont use me for business then we are not friends....thats no way to run a BUSINESS.

why is it that we think someone is not our friend if they dont use us for a transaction? selling real estate and being friends with someone do not go hand in hand. a true friend can use anyone they want and i will be happy for them to be purchasing a home.

i will be happy for them getting hte home that they want regardless of who they use because i am a true friend.



"No matter how much you try to educate them, some will still stray."

people are not stupid. if htey dont use you there is a reason. the fact that someone "strays" means that they did not want to use you. no one is or should be obligated to use an agent becasue teh agent "educated" them on the fact that the agent wants a paycheck and only gets it if the "friend" uses them.

this is a pieve of mine......this is business, its not personal if someone does not use you.

we should be happy to see homes selling regardless of who sells the home.

if our friends get "educated" on how we get paid they might think they are just paychecks instead of a true friend.

i know that i am on a tangent, but i forgot to add.

eba should be signed at the initial buyer consultation after the buyer has spoken to a lender and you know they can in fact become a client. that right there should stop any misunderstandings if it is explained that they will owe you a commission.

i wont even have the 45 minute initial consultation with a buyer if they have not spoken to my lender to make sure that they can buy. it is after all a buyer consultation, not a tirekicker or windowshopper consultation. if they already have a lender i have them send me a prequal and i call the lender to verify.

work less hours and make more money.

its all about following hte proper steps in the proper order to achieve a consistent, desireable, predictable, repeatable result!

Bless you, Jimmy. I'm stunned at how many agents put their business ahead of their friendships, but then are outraged when their friends do the same. VERY WELL put. This might find its way into my next book...

"what i hear is this.....

if you dont use me for business then we are not friends....thats no way to run a BUSINESS."

I don't see much frienship, if I have supported my friends business all these years, although I could have saved a few bucks by using his competition, and he goes out and uses another agent to buy and sell.

What annoys me about friends using other agents for their transaction is not so much that they used someone else - but that they took time to seek me out, ask my advice on selling their home, and then - after I talk with them at length they say "Great!" and the next day the listing is up on the MLS with another agent. That was deceptive on their part, because they said "I'm THINKING about selling my home, what do you think I should do..." and the fact is, they were NOT thinking about it at all; they OBVIOUSLY had a contract signed with someone else. I was hurt by the fact that they used me in a deceptive way. Then he had the nerve to email me and say "If you know someone who wants my house, send them my way!"

Overall, though - some great points were made here about using friends. Personally, I would feel funny if my friend turned out to be a problem seller, or had a house that wasn't desirable and difficult to sell....or what if I sold someone a house and then they hated it, they may very well blame me and there's a friendship gone south.

Jimmmy said it excellently too - it's not worth losing a friend. Really, it's not. It sucks when a friend uses someone else, but I think it sucks worse to lose a friend.

You should never do business with friends. If you don't believe it, just ask Lucy.

http://www.youtube.com/watch?v=9Hy5sdDep2Q

Yep it's called "picking your brain". This is one of the first skills and agent needs to hone.

Used to I would be excited about real estate and talk endlessly to my friends that had questions. I soon learned all the time was taken away from productivity.

Bottom line is I don't pull punches anymore. I ask them through quick questions to set up a meeting. If they want information I see through it right away and ask them to contact their agent as that is what they are getting paid for.

I still love real estate I just know when to talk and not to talk. I used to eat at this Chinese restaurant and every time I went there they would grill me with questions. I have been going elsewhere for the past 4 years.

I tell friends If we are going to do business we will have a meeting. If not I just want to enjoy our time together hanging out as friends. A question or 2 is okay but I stop it at that.

More than once I have had stranger clients tell me they used me instead of one of their friends because they have more than one real estate agent friend and they didn't want to have to choose which friend to use.

I have had stranger clients tell me they did not want to use a friend simply because they did not want their friends involved in their personal business. Do you let your friends in on your personal finances?

When a friend is doing a real estate transaction and I am not involved, I feel honored to be able to give them advice and help them out. After all, they are my friend and friends help each other out.

I think the hardest part about a friend doing business with someone else and not you is that you feel they didn't trust you enough to handle the job. I can definitely see where someone would be "let down" if their friend uses another professional instead. After all, friends are supposed to trust one another and have faith in each other.

i get a physical once a year. there is 1 part where i must cough. i would not want my friend to be my doctor. kind of crosses a line for me.

let me start by stating that i am perfectly healthy. this is just an example, but my sister really is a pharmisist.
my sister is a pharmisist. if i had health issues, i would not go to the pharmacy that my sister works at because i dont want her in my business.


Bigtoe made a great point...what if the buyer/seller has 2 friends who are agents? wow...thats a great one.

i had a client who had to come to the table with 54k to sell her home. she used me over her friend because she did not want her friend to know that she was in financial trouble at one time a few years ago and she refinanced to pay off credit card bills.

i changed cpa's a few years ago because he was a friend of the family and i dont want him to know what i make. i wanted to keep business on the business side and personal on the personal side. i would rather have him as a friend than an accountant. i dont want to go to a cookout and have ANYONE know exactly what i make.

I understand the problems inherent in having a friend become an unrealistic client. On the other hand, I sure hate to see a friend stuck with a lack-luster agent who has no idea how to market their house.

Or an agent who has no clear understanding of how to be a strong buyers' agent.

This is when I show them that I am a true friend and help them out. For free.

If "They" were true friends, they wouldn't let you rep them for free. Some people just don't like to see a friend make money. They would rather someone they don't know make it. That's just the way it is jack. Bet you won't use that in your book, Jen? BigC

In the situation you quoted they are using another agent and I am just helping them on the side. For free.

I don't judge whether a friend is true or not by how much money I can make from them or if they pick another agent. My friends help me out for free so why should I not return the favor. That being said, in the past 6 years I have made $91,125.00 helping friends buy and sell real estate and I have also done deals for nothing.

Also remember to have them sign a buyer-representation agreement. And be willing to go after your money if they decide to buy with someone else.

No No No, you can't make a friend sign a B-R-A. Then they would be obligated to pay you for the professional work you are doing. That would be terrible. Geeeez BigC

Well guys, I want to update you on this posting. I listed his house and got a contract within 30 days, closing is next couple of weeks. The property that he was purchasing through another realtor fell through, a no go, so now he is calling me. Isn't life grand!