Really need advice

**BSS2T** · 07-17-2009, 10:34 AM

I have been an agent since August of 05. At the beginning of 2006, I began to work in a model home with a builder developer. The builder developer's wife is an agent and became my team leader. About a year and a half ago, the developer's wife opened up her own RE company, and I moved my license.

There have been no problems until this month. We have a transaction together that worked like this. During my day at the model home, she received a phone call from someone interested in one of the houses. She told them to come to the model home to see me. The people came to the house, I showed them property, and then she shows up to answer questions (she is also listing agent and part owner in the construction company). We get the deal signed. The MLS states that there is 2.5 on the buyers agent commission, and 2 on the listing agent. As soon as the people leave, she informs me that "there is not enough money on the house, and that we have to split the commission 1.5 and 1.5.". This has never happened before. I wasn't happy about this, since I feel that I am taking a reduction of reward (commission) when I don't really have a stake in their company.

Then today I am informed that they may have to do an owner financing deal, since the people have a foreclosure on their credit, and that there would be no commission. I really don't feel like she would do this with any other agent.

Can you guys give me some advice here? What is normal commission, if any, on an owner financing transaction? Would you guys leave the company? Who would sue?

Thanks so much for your help.

Brad.

**Glennet** · 07-18-2009, 07:22 AM

Hey Brad-

You got yourself a real sticky situation here.

Let me ask this question - let's suppose that this was a real arms length transaction for your broker/team leader - and she had no personal or financial ties to the developer.

What do you think HER reaction would be if the developer came back to her and tried to lay the same garbage off on her. I think there you will find your your own answer as to how fair this is.

I think that you need to calmly but firmly let your broker know how unsatisfied you are with what she is telling you - and that she needs to make good on your full commission. Use that position as a starting point for your negotiations - but without playing real hardball here - your position is a weak one.

I think the best thing you can do for yourself is to start looking immediately for a more honest broker/business partner.

Good Luck-
Glenn

**fmike630** · 07-18-2009, 08:03 AM

hot line.
Do you have a signed agreement with the client that you represent them?
What I am confused about is that seller financing usually will generate more profit based on interest for the builder (which your broker owns half of) so why are they not willing to pay your commission?
I wouldn't trust the broker after that deal!

**Greg** · 07-19-2009, 05:38 AM

Originally Posted by fmike630

hot line.
Do you have a signed agreement with the client that you represent them?

I hope not since he is already working for the seller.

Originally Posted by fmike630

What I am confused about is that seller financing usually will generate more profit based on interest for the builder (which your broker owns half of) so why are they not willing to pay your commission?

Owner financing means there is less money exchanging hands at the closing table which is where the commission would be coming from. The commission could be paid in installments.

Originally Posted by fmike630

I wouldn't trust the broker after that deal!

Agreed. It looks like it is a good time to move to another brokerage although this buyer was handed to you on a silver tray and the broker did most of the work. If this is all you know then you are in for a real surprise when you hit the real world.

**ohioreoexperts.com** · 07-27-2009, 11:50 AM

Depends on how far you want to take it really. If the MLS states the commission is "X" then it matters not what the agent says unless it is changed in writing during the contract period or on a signed addendum. These cases typically are slam dunks for arbitration in our area.

We had a bank client who cut our commissions at close and I had to eat the fee cut to the BA, I knew better than to argue it and waste a lot of time and some money. It wasn't worth the effort for the fee in dispute and if it was a large amount, I would have taken it directly to the bank client I represented.

You're situation, you may be taking your broker to arbitration or something similar. Of course, it may be highly dependent on what the fee is. Do you want that?