Buying a house--real estate agent question

[lollie010]

I seriously need advise. I will try to be brief. We have been wanting to buy our first house for quite a while. About 6 months ago a Real Estate Agent from our church showed us two houses. We did not enter any agreement or anything. We told her the time was not right.

 

Fast forward to last month. On our own, driving around my mom's neighborhood. We found the perfect house for us. It was at the absolute top of our "comfort zone" as far as price. It is a new home being sold by the builder--no room for negotiations as to price and no need for inspections, etc. We have been trying to get our financial situation in order to make an offer on the house.

 

Yesterday, out of the blue the real estate agent called to tell us about the interest rates going down. I told her thanks and that we had found our house. She called me back a few hours later and said that she had talked to the builder and the house was still available at the previous asking price, but that WE WOULD HAVE TO ADD $5000 TO THE ASKING PRICE TO COVER HER COMMISSION. IF WE ADD $5000 COMMISSION THE HOUSE IS NO LONGER WITHIN THE AMOUNT WE ARE APPROVED FOR AND THE BUILDER WILL NOT COME OFF OF THE PRICE ANYMORE.

 

What should I do? What am I obligated to do? We are so upset. I feel aweful--I know real estate agents work hard, but...

[Carrie12345]

I don't understand. What does she want $5,000 for?

[Sharon in SC]

I seriously need advise. I will try to be brief. We have been wanting to buy our first house for quite a while. About 6 months ago a Real Estate Agent from our church showed us two houses. We did not enter any agreement or anything. We told her the time was not right.

 

Fast forward to last month. On our own, driving around my mom's neighborhood. We found the perfect house for us. It was at the absolute top of our "comfort zone" as far as price. It is a new home being sold by the builder--no room for negotiations as to price and no need for inspections, etc. We have been trying to get our financial situation in order to make an offer on the house.

 

Yesterday, out of the blue the real estate agent called to tell us about the interest rates going down. I told her thanks and that we had found our house. She called me back a few hours later and said that she had talked to the builder and the house was still available at the previous asking price, but that WE WOULD HAVE TO ADD $5000 TO THE ASKING PRICE TO COVER HER COMMISSION. IF WE ADD $5000 COMMISSION THE HOUSE IS NO LONGER WITHIN THE AMOUNT WE ARE APPROVED FOR AND THE BUILDER WILL NOT COME OFF OF THE PRICE ANYMORE.

 

What should I do? What am I obligated to do? We are so upset. I feel aweful--I know real estate agents work hard, but...

 

Given the amount of time that has transpired between when the REA showed you the two homes and now coupled with the fact that you did not sign the form indicating your pledge to purchase with this REA, I feel this person should not be expectant that you would purchase through them. Is it possible they thought they were helping you by doing what they did? In any case, I would be honest and share with them what you have with us here (regarding the price being out of your price range with the additional commission) and indicate that you'll need to proceed with the purchase on your own.

[Alenee]

She may very well have ruined your chances at that house now. She had no right to call the builder on your behalf without you signing an agreement with her. If I were you, I'd be calling the builder asap to let them know that she is not representing you. Then I would call her Broker and tell him/her of the inappropriate actions on the REA's part.

 

The seller is supposed to pay your fees which from a builder's standpoint is already included in the asking price. I'd be pissy and letting both parties know how I felt. And then I'd be hiring a realtor to represent me, not dealing with the builder at all from this point forward. You do need someone to represent you. Inspections are always a good thing, especially when they're brand new houses. Don't be afraid to send that realtor packing. This is business.

 

But, that's just me...

[Jackie in NE]

You don't owe her a thing. She did not show you the house. She didn't "find" the house for you. Did you ask her to contact the builder? If you did, then the situation is a bit stickier. But it sounds to me like she is trying to manipulate you into paying a commission you don't owe.

 

Don't even talk to her about the house again. Deal directly with the builder.

 

There are attorneys who specialize in real estate. If, for any reason, you feel that you need representation when dealing with the builder, you may want to hire one. But you would have to pay him/her. When I bought my 1st house, I was completely on my own, and felt a little bit vulnerable. I felt like I needed someone to be working for me, and representing my interests. I found a real estate attorney in the phone book. Asked around to "see" if he was reputable, and hired him. I was glad I did. There's a lot of paper work, and a lot of bargaining points.

 

Good luck, and stick to your guns.

[Aggie]

When homes aren't selling quickly, they are out drumming up business.

 

In your case, I completely agree that you owe her nothing. Contact the builder asap. He probably doesn't care one way or the other since the buyer pays the rea anyway. But if he signs with her, you've already lost that deal.

 

I wonder if they have a professional board to which you could complain? Or someone in her office, maybe?

 

IME, because of the nature of the business, some rea are just snakes.

 

Hope you get this worked out quickly!

 

Aggie

[plain jane]

IME, because of the nature of the business, some rea are just snakes.

 

Hope you get this worked out quickly!

 

Aggie

 

 

:iagree: Not all, but some really are.:glare: I agree that a lot of it is due to the nature of the business. Promise of such high commissions doesn't yield the best of characters at times.

 

I also agree with the posters who suggested you contact the builder and inform that the rea wasn't representing you. GL.

[In The Great White North]

She may very well have ruined your chances at that house now. She had no right to call the builder on your behalf without you signing an agreement with her. If I were you, I'd be calling the builder asap to let them know that she is not representing you. Then I would call her Broker and tell him/her of the inappropriate actions on the REA's part.

 

The seller is supposed to pay your fees which from a builder's standpoint is already included in the asking price. I'd be pissy and letting both parties know how I felt. And then I'd be hiring a realtor to represent me, not dealing with the builder at all from this point forward. You do need someone to represent you. Inspections are always a good thing, especially when they're brand new houses. Don't be afraid to send that realtor packing. This is business.

 

:iagree: If you did not sign a contract with her, she is not your agent. Period.

 

Do you have any paperwork from the builder stating the price? Did you sign a contract with him? If you did, then the price cannot arbitrarily change.

 

Did he have a real estate agent? She may have gone to him and convinced him that she had a buyer, if he would sign a contract with her. If he were on the ball, he would have listed you as an exception to her contract. If he didn't, there isn't much you can do about it.

 

If you don't get this house, I would definitely find a different realtor, with better ethics.

 

You need an inspection, even if the house is new. Perhaps even more if the house is new and no one has had to live through a few seasons to find all the problems. I have found home inspectors to be practically useless. They point out things the casual observer would see and warranty only the $400 you paid them, which won't cover a major defect. If you can, get a real live contractor (who is willing to do any repairs) to inspect the house and submit a binding estimate for any necessary repairs. That way you know what the real cost to fix it will be.

[lollie010]

Thank you all so much for your responses. It really helps to have a place like this to ask questions. I have just been "floored" by the whole incident. We are also hurt--since she was basically a friend from church as far as I knew and now this.

 

We want to do the right thing, but we also don't want to be taken advantage of. I think I will just call her tomorrow, tell her how we feel, and then deal directly with the builder. There are no other comparable houses in our area at this price. This is the first house in a new neighborhood and the builder really wants to get someone in there. There is no other house in this price range that would meet our needs.

 

I don't understand. What does she want $5,000 for?

I don't really know...that is why we are so confused. She says that this is her commission, but we have no formal relationship with her and she did nothing to help us find the house, and will do nothing to help us buy the house. She just made one phone call to the dealer to see if the house was still on the market, when I knew it was because I had just ridden by the house. She has never even seen it and it is not listed on any of the realtor lists.

 

Thanks again everybody.

 

Laurel T.

[lollie010]

If you did not sign a contract with her, she is not your agent. Period.

 

Do you have any paperwork from the builder stating the price? Did you sign a contract with him? If you did, then the price cannot arbitrarily change.

 

No there was no contract and never even a discussion regarding commission or representation.

 

I don't have any paperwork from the builder. We looked at the house about a month ago. We expressed our interest in the home, but I was about to take the Bar Exam and told them we would get back to them as soon we could work out the timing and finances. In the meantime we prayed that noone else would buy the house. I have talked to the builder a few times over the last month to give them a status check.

 

I am pretty spineless when it comes to stuff like this.

 

Laurel T.

[Scarlett]

She is just trying to pull a fast one. I wouldn't call her before talking to the builder. Tell him flat out, as someone else said, she is NOT representing you and you cannot buy the house if he has to pay her a $5K commission.

 

As for what to tell her, if you think you need to tell her anything, how much you can afford is irrelevant. Would you pay her $5K if you could afford it? I wouldn't. So just tell her you are sorry if there was confusion, but you only mentioned the house you had found as friendly update---that you were already dealing with the builder on your own and that is how you intend to keep it.

 

She makes me mad. :)

[Guest]

She called me back a few hours later and said that she had talked to the builder and the house was still available at the previous asking price, but that WE WOULD HAVE TO ADD $5000 TO THE ASKING PRICE TO COVER HER COMMISSION. IF WE ADD $5000 COMMISSION THE HOUSE IS NO LONGER WITHIN THE AMOUNT WE ARE APPROVED FOR AND THE BUILDER WILL NOT COME OFF OF THE PRICE ANYMORE.

 

 

I am a little confused - how did she know what house you were looking at in the first place and which builder to contact? You may have answered this in another post:

 

She just made one phone call to the dealer to see if the house was still on the market, when I knew it was because I had just ridden by the house.

 

I'm assuming from the info. provided that you must have asked her to call or somehow shared with her about the house you were looking at...it sounds like you haven't worked with her in months and you found this house on your own in the last month - not with her.

 

If you asked her to call on it, then I can see why she wants to be cut in on the deal. We are working with a realtor right now who is doing a similar thing. Do I think it's WEIRD that they would do that, pretty much asking you to put $5,000 in their pocket? Yes. Are you obligated to include her? Not if you didn't sign anything. But I just want you to consider her point (only because I'm having to do this, as well) that she was helping you look, you found a house on your own, but she did call on it. (And again, if you asked her to - then she did "work" on it.)

 

I don't know. I don't agree with what she's doing, but I guess maybe she's just trying to make a living. Times are tough for everyone right now.

 

Regardless of my point, if it were me, I'd contact the builder and tell them that she is not representing me.

 

Sorry you're going through this. :grouphug:

[lollie010]

I don't know. I don't agree with what she's doing, but I guess maybe she's just trying to make a living. Times are tough for everyone right now.

 

 

I know and that is why this is so hard. I did tell her who the builder was and where the house was when she asked. I know she has to pay her bills also and I do not want hard feelings. I just don't see how this will all work out without someone feeling wronged.

 

Maybe this is just another example of the timing not being right for us. We may just pass on the house and officially cut ties with her as our REA. Then hope for another great deal in the future. I am just not sure.

 

Laurel T.

[Jackie in NE]

I know and that is why this is so hard. I did tell her who the builder was and where the house was when she asked. I know she has to pay her bills also and I do not want hard feelings. I just don't see how this will all work out without someone feeling wronged.

 

Maybe this is just another example of the timing not being right for us. We may just pass on the house and officially cut ties with her as our REA. Then hope for another great deal in the future. I am just not sure.

 

Laurel T.

 

Really? You would actually let go of a house that you really like because of this situation with the rea? Don't let her get in your way. You have found a house that you really like. Negotiate with the builder, and just don't talk to her about it. If she calls, just tell her you're dealing directly with the builder. She will understand ALL that statement implies. This is not her deal. If she gets pushy, remember that you are in the right. She did not show you the house. period. So, she is not due any commission. period.

[melissel]

Really? You would actually let go of a house that you really like because of this situation with the rea? Don't let her get in your way. You have found a house that you really like. Negotiate with the builder, and just don't talk to her about it. If she calls, just tell her you're dealing directly with the builder. She will understand ALL that statement implies. This is not her deal. If she gets pushy, remember that you are in the right. She did not show you the house. period. So, she is not due any commission. period.

 

Yes, this. Of course she has her own bills to pay—we ALL have our own bills to pay—but she doesn't get to pay them by working you over. You don't have to feel sorry for her. It's possible she was confused, and that's unfortunate, but if she really believed that this was her deal based on what you told her, then she's not much of a real estate agent. No, it's far more likely that she's counting on your inability to say no to her.

 

There is a reason you sign contracts with REAs. If you do not sign one, you are not obligated in any way. Bottom line. She's trying to take advantage of you. Don't let her. Call your builder, explain, and move ahead as planned. If she wants a commission, she'll have to do the actual work for another client.

 

:grouphug:

[Sharon in SC]

You have found a house that you really like. Negotiate with the builder, and just don't talk to her about it. If she calls, just tell her you're dealing directly with the builder. She will understand ALL that statement implies. This is not her deal. If she gets pushy, remember that you are in the right. She did not show you the house. period. So, she is not due any commission. period.

 

:iagree:

[Kimberly in IN]

:iagree: with all that has been said about the rep.

 

But, I just want to stress that just b/c a house is new, please don't assume you don't need an inspection. You do!!!! You would be surprised what we issues we have found with brand new, from the builder homes. The builder may be the greatest guy/gal in the world but so many things may be not code, not put together correctly, etc. A good inspector, not just one who does a quick walk through, is very much worth the money.

[Part-Time Homeschooler]

This is an unfortunate situation. I agree with the other posters: You do not owe her anything if you did not sign an agreement with her. She is being very aggressive, probably because the market is so slow right now.

 

The seller usually covers the agent's fees. The builder wants to add $5,000 to the cost of the house because they don't want to pay the commission. Do you know how the agent arrived at the $5,000 figure? Was her percentage ever discussed? Commission is not set in stone. She could come down on it if she wanted to. Perhaps you, the builder, and the agent you could all work something out so that she can still represent you, but at a lower fee (and not at your expense). With the real estate market being the way that it is, I would think that they both would be willing to compromise a bit.

 

Good luck -- I really hope you get your house!

[lollie010]

But, I just want to stress that just b/c a house is new, please don't assume you don't need an inspection. You do!!!! You would be surprised what we issues we have found with brand new, from the builder homes. The builder may be the greatest guy/gal in the world but so many things may be not code, not put together correctly, etc. A good inspector, not just one who does a quick walk through, is very much worth the money.

 

 

Thank you for this reminder. This is our first house and I really did not think about it.

 

Laurel T.

[lollie010]

The seller usually covers the agent's fees. The builder wants to add $5,000 to the cost of the house because they don't want to pay the commission. Do you know how the agent arrived at the $5,000 figure? Was her percentage ever discussed? Commission is not set in stone. She could come down on it if she wanted to. Perhaps you, the builder, and the agent you could all work something out so that she can still represent you, but at a lower fee (and not at your expense). With the real estate market being the way that it is, I would think that they both would be willing to compromise a bit.

 

 

I stressed about this all night and decided to go by and speak to the builder personally today and explain our situation. Thanks for confirming that the seller usually covers the fees. Maybe my husband and I can negotiate something with the builder.

 

I really appreciate all of the advise. I will keep you all informed.

 

Laurel T.

[lwilliams1922]

DH is a relator and often times he spends days weeks and months driving people around that never buy houses or cant qualify. That's part of the business.

 

he says it's unethical to contact someone on your behalf without your request, consent or signed buyers agreement.

 

I know how hard it is to tell someone a situation is not working for you. In this case I think you really need to stand your ground. Not in an offensive way as I dont THINK she meant any harm. If you are working with the builider to make the numbers work than so be it.

 

Personally if it were someone in the same church in a similar situation I think DH and I would assist them without a commision to help them get in. We need the money but a happy home owner could provide a referal later on, who knows?. I think it works out in the end... reaping what you sow.

 

tell the builder she is not representing you so he is not obligated to pay her as you do not have a signed ageny form.

 

He has a house he wants to sell. you would like to buy a house. He doesnt have to pay if she did not bring you to him or you did not request her help.

 

sorry for the typos.

[Scarlett]

Commission is not set in stone. She could come down on it if she wanted to. Perhaps you, the builder, and the agent you could all work something out so that she can still represent you, but at a lower fee (and not at your expense). With the real estate market being the way that it is, I would think that they both would be willing to compromise a bit.

 

While this is true when a REA is representing you it really is irrelevant in this case. I do not think should have to compromise when she did not agree to have this REA represent her. I would. not. pay her a dime.

 

And Laurel, about this house and how much you love it...Dh and I have only bought two houses. Both times there was a house we just LOVED and thought we could die if we couldn't have. Both times those deals didn't work out and we ended up with a much better house, better neighborhood, better deal...just everything. So don't get so hung up on ONE house that you lose perspective. There are many many many houses out there. Even delaying your purchase of a home by a year is better than be taken advantage of like this REA is trying to do.

 

:grouphug:

[Scarlett]

DH is a relator and often times he spends days weeks and months driving people around that never buy houses or cant qualify. That's part of the business.

 

he says it's unethical to contact someone on your behalf without your request, consent or signed buyers agreement.

 

So true about it being part of the business. Our REA, now retired, showed us houses for over year both times we bought a house. I often wonder if she even made any money on us---I think we were particularly difficult customers (read dh was the difficult one.;)) However, she hung in there and I always threw referrals her way when I could. I guess enough people look at 2 houses and then pick one that it evens out the people like us.

[lollie010]

I seem to have grown a spine this afternoon and am very proud of myself. I figured out over the course of the loan how much her commission would cost and it came to over $45,000 (if I did the math correctly). So I made the phone call. I briefly explained why we were severing any ties as buyer-realtor, told her I would contact the builder if I had any questions in the future, and told her I am looking forward to seeing her at church on Sunday (and I meant it). She seemed upset, but I know I did the right thing. Now we can just focus on making the right decisions for us.

 

I would never try to do anything to "cheat" someone out of what they are due and I recognize how hard REA's work, especially in this environment, but after reading through all of the responses I concluded that I needed to take control of this situation. We had no contract, never discussed commision, only had a few conversations, and we found the house on on own.

 

I feel ok with the outcome--still a little sad that anybody would have to be hurt. Thank you all for your help.

 

Laurel T.

[melissel]

Good for you!!! I know that was a very hard phone call to make. You did the right thing. I hope the house is everything you expect it to be!

[Part-Time Homeschooler]

I seem to have grown a spine this afternoon and am very proud of myself. I figured out over the course of the loan how much her commission would cost and it came to over $45,000 (if I did the math correctly). So I made the phone call. I briefly explained why we were severing any ties as buyer-realtor, told her I would contact the builder if I had any questions in the future, and told her I am looking forward to seeing her at church on Sunday (and I meant it). She seemed upset, but I know I did the right thing. Now we can just focus on making the right decisions for us.

 

I would never try to do anything to "cheat" someone out of what they are due and I recognize how hard REA's work, especially in this environment, but after reading through all of the responses I concluded that I needed to take control of this situation. We had no contract, never discussed commision, only had a few conversations, and we found the house on on own.

 

I feel ok with the outcome--still a little sad that anybody would have to be hurt. Thank you all for your help.

 

Laurel T.

 

That's great! I'm so glad it worked out for you! :)

[coffeefreak]

I seem to have grown a spine this afternoon and am very proud of myself. I figured out over the course of the loan how much her commission would cost and it came to over $45,000 (if I did the math correctly). So I made the phone call. I briefly explained why we were severing any ties as buyer-realtor, told her I would contact the builder if I had any questions in the future, and told her I am looking forward to seeing her at church on Sunday (and I meant it). She seemed upset, but I know I did the right thing. Now we can just focus on making the right decisions for us.

 

I would never try to do anything to "cheat" someone out of what they are due and I recognize how hard REA's work, especially in this environment, but after reading through all of the responses I concluded that I needed to take control of this situation. We had no contract, never discussed commision, only had a few conversations, and we found the house on on own.

 

I feel ok with the outcome--still a little sad that anybody would have to be hurt. Thank you all for your help.

 

Laurel T.

 

:party:

 

You are awesome! Good for you!

Dorinda

[StaceyinLA]

You need to contact the builder DIRECTLY, explain the situation, and see if you can go further with him directly (which should be fine as long as the builder has signed nothing).

 

And I disagree with advice to get a realtor to BUY a house (we don't use them to sell either, but I've worked in the title business and don't need help). If a house is listed FSBO, they probably won't want to sell to you if you have a realtor involved that wants a commission (that's usually the seller's expense). If you find a house listed with a realtor already, you don't really NEED another one.

 

The main thing is making sure you have a good title company/closing attorney that will examine the title making sure there are no problems and offer you title insurance to protect you if anything ever comes up with the title.

 

**Just read your last posts and it seems you've taken care of it. Good for you!!