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Agent commissions dilemma

18 years ago

Ethical/Legal Question: A house is listed with a broker/agent duo for 6 months with each getting 1/2 of the commission. The house is being sold by an estate of which there are 4 siblings getting a share.

Sibling #1 calls the agent without asking the other 3 and suggests that when the contract ends that she is thinking about buying the home. Sibling #1 warns the agent that this will be done so that no commission will be paid to either the broker or agent.

The agent calls sibling #2 who is in charge of the estate and asks if this is true etc. The agent is upset and worried.

The agent is told by sibling #2 to continue to market the house and to not take any more calls from sibling #1.

Now 3 siblings are wondering if sibling #1 is trying to pull a fast one on them. Isn't it too late for Sibling #1 to get around the commission? If she wants to buy the house with 4 siblings benefiting from sale shouldn't she act as any buyer would act? (There is no proof that she is a qualified buyer.)

And legally, is it a good idea for 3 inexperienced siblings to go without an agent (all 4 live in different states)?

What about the legal rights of the agent?

Sibling #2 thinks the agent has done a lot of work and wants to continue with the agent until 6 months is up and possibly continue 3 months after that considering the slow market. Siblings #3 & #4 think she deserves the commission.

Any one ever hear of anything like this before?

Comments (11)

  • 18 years ago
    last modified: 11 years ago

    I can tell you that yes, stuff happens when there is an estate.

    For one, if this sib does in fact want to buy the house, why not let them? If the agent has not sold the house and you know one of you wants it, why not use an attorney to draw up papers?

    It sounds like some of you aren't speaking.. if there is an attorney involved, have the attorney call the sister interested and get the ball rolling to see if she is qualified. If she is, you can do this one of a few ways.. wait for it to go off of contract so that you can lower the price minus the commission, or she can buy it now while there is a commission. You can also think about offering the agent money towards their advertising. There are a lot of ways to do this. You currently have the house listed for a certain price.. minus her cut, if it can be done, or she can then use her cut in the end to put a large deposit.

    What I don't get is what the big deal is? Why can't this sib buy the house?

    I came here a year ago on the other end of this.. I was that sib. I really wanted my parents new house, it held a lot of meaning to me, my dad died in it. I wanted to make the memories that my dad wouldn't get to make. The house was perfect for us, I'd helped my dad pick the model, we have similar tastes.

    Here I am one year later, I still cry that they refused to sell us the house. We'd offered on it when it was 1st put on the market and was told no. After no activity for months we were told ok. Right before contract ended an offer came in, we were not called to see if we wanted to up our offer which we would have.

    Sibling #2 thinks the agent has done a lot of work and wants to continue with the agent until 6 months is up and possibly continue 3 months after that considering the slow market. Siblings #3 & #4 think she deserves the commission.

    Can't you come to a compromise? Are you worried she will fix the house up and sell it? What kind of "fast one" do you think she's trying to pull?

    Think about this.. you are all sisters. How do you think your parents would feel about what is going on? Do you think they would be happy to know this is going on?

    What about the legal rights of the agent?
    Sibling #2 thinks the agent has done a lot of work and wants to continue with the agent until 6 months is up and possibly continue 3 months after that considering the slow market. Siblings #3 & #4 think she deserves the commission.

    The agent has not sold the house in 6 months. Why be spiteful renewing the contract for more time when one of you want it? Would it hurt to let the contract expire, the amount of time go by that the agent would get a cut of commission (read your contract), then let her buy it for less money or pick a number in between, then give the agent something when you close. A partial commission is better then nothing.

    The sooner you sell this house, the sooner you all get paid, the sooner this is over. Please don't be spiteful. Whether you are speaking right now or not.. you are all blood.

    One last word... Karma.

  • 18 years ago
    last modified: 11 years ago

    This does indeed happen when there's an estate.

    I was involved in one frustrating & heart-breaking non-sale, & it's a cautionary tale:

    Two 60-ish siblings shared in their parents' estate.

    They both had to sign closing papers for the house.

    One of the sisters was pretty well-off, & she & her husband wanted the house.

    but they wanted to get it for almost nothing.

    so this sister wouldn't sign.

    It dragged on for literally years, until the other sister's husand had a health crisis & they needed money badly.

    so she agreed to sell her part of the property to her sister for almost nothing.

    so...
    It's very important to have a will spelling out your wishes explicitly & to name an executor/executrix with integrity.

  • 18 years ago
    last modified: 11 years ago

    ...sorry, I forgot to address the question!

    Here, there's a protection period after the listing expires, during which the commission is payable should the property be sold or be contracted to be sold to anyone whose name appears on a list that the agent provides to the seller(s) within a certain number of days following the expiration date.

    If I were the agent, I'd send letters to all the siblings & put sibling #1's name on the list.

    If I were one of the other siblings, I'd tell sibling #1 to make an offer or stop being obstructive.

  • 18 years ago
    last modified: 11 years ago

    Who has the legal authority to make the decision to sell or not? Is it one sibling or do they need to come to agreement? Because if it's decision-by-committee, you're probably in for a real mess.

    It appears to me that Sibling #1 was foolish to talk to the Realtor since she could have just waited until either the contract expired or another offer came in, at which point, her conduct would not have been questionable in any way. As it is, the agent has a good case for putting Sibling #1 on her list; but Sibling #1 and the others all also have a good case for arguing that the agent is not the procuring cause, since Sibling #1 was to some degree, one of the sellers...

    Any idea what type of price Sibling #1 is thinking of? If it's a fair price, why not let her buy the house, provided you can agree with the Realtor on some partial commission arrangement? (I say 'partial' since no offers have been forthcoming after nearly 6 months, and the likelihood of getting a full commission is in doubt.) Or offer Sibling #1 a right of first refusal at whatever price the agent can procure from another buyer. (But then, full commission would clearly be due to the agent.)

    If Sibling #1 wants the house for a 'steal' price, simply reject the offer.

  • 18 years ago
    last modified: 11 years ago

    why didn't sibling 1 make an offer on the house before the house was listed? Have a few agents walk through, say what the house is worth, and sibling 1 could have bought the house...without having to pay commission-it sounds like sibling 1 is way out of the loop to begin with-no wonder she's playing games now.- I agree with sweeby for the logistics of it all-Be fair. If sibling 2, 3 or 4 now want it-make them offer and see who has the best offer.

  • 18 years ago
    last modified: 11 years ago

    Would be nice if the OP would come back and update the post...

    I agree that it sounds like one sib is out of the loop, who knows if she was asked if she wanted to buy the house before it was listed.

    We also have no clue how much they are asking for the house and how much the commission is, we could be talking about $20,000 or more.

    I understand that people have seen / had bad experiences when selling houses to relatives or settling estates but not everyone has bad motives. If my aunt expressed an interest in buying our house, you bet I would try to do it without having to pay a commission, commissions can run the price of a house up, especially if the parents originally paid next to nothing for it. You would be able to figure out what the houses should be selling for with comps, then figure what the going rate of commission is, then come to a fair price somewhere in the middle since you'll have to get an appraisal & an attorney to do the work. If you do not have a commission to pay and can wait until the contract is truly expired, it may be more money in all of your pockets, or you can cut a relative a small break.

    The agent hasn't sold the house and very well may not. Then what if it's not sold in 9 months time? How much lower will your market go when you could have sold the house to the sister and been done with it?

    How do you know the agent is doing all that they need to do in this market? I know of another scenario like this and looked at the listing & was not impressed. Everything was rushed, pictures were lacking as was advertising.

    This is a horrible market to sell in and if you can come to an agreement either using the agent or not, it will be less of an expense in the long run as you won't have an more carrying costs

  • 18 years ago
    last modified: 11 years ago

    Thanks for all the input--I had no idea there would be so many different takes on this situation.

    To answer a few questions (I hope) Sibling 1 has been privy to everything from choosing the agency to pricing the house--there is a conflict between sibling 1 & 4 for unknown reasons but sib 4 also wanted to work with this agency.

    House is in the high $500,000.

    It is too bad that Sib 1 didn't mention that she was interested before the agency was hired. The odd thing is that sib 1 insisted that the agent have an agents open house & that a clause be inserted that the property be shown & offers be taken until certain sale.

    Sibling 2 would love to sell, sell, sell to anyone who wants to buy. And pay the commission if the full asking price is met.

    Today Sibling 4 was informed that Sibling 1 might really be ready to buy--there were no fireworks. So maybe this will all work out.

    At one time, early in the game, sibling 4 was interested in buying the house even with the agent getting commission but she changed her mind. Sibs 2 & 3 just want to sell.

    Thanks to all the feedback there was a huge attitude adjustment from 2 of the siblings--and related spouses. It is great to see the other side of the coin.

    To Roselvr: Your comments were a revelation--all 4 siblings believe in karma.

    Some where in the fine print the agent gets commission if the house sells within the year even if the contract is not renewed.

    Thanks again for the amazing thought provoking comments--we are learning as we go.

  • 18 years ago
    last modified: 11 years ago

    estates can be the worst- my mother wanted to buy her father's house after her stepmother died and her 2 stepsiblings refused to allow it for no particular reason- she presented an offer anyway which was refused and the house was sold for 30k less than she offered to a cousin on their side of the family who flipped it and split the profits with them. They each got 1/6th of the first sale and 1/3 of the second sale.

  • 18 years ago
    last modified: 11 years ago

    Hi:
    I'm reporting back on progress so far...

    Sibling 1 is welcome to buy house with significant discount BUT has yet to do anything(loan, selling other home, etc.) toward buying it.

    We have just gotten a written offer--now what? All sibs were emailed the offer (but only 1 of the sibs has the legal right to sign)--how does this go with regards to responding to the offer if Sib 1 doesn't commit to the purchase? Our contract with real estate agency expires at the end of March.

  • 18 years ago
    last modified: 11 years ago

    Since you have a written offer it's time for sib 1 to either put up or shut up. Sounds like you've given them enough time to get serious about it, and you have to decide on the offer you've gotten; they really can't drag their feet now. I might give them 24 hours to respond then move on.

  • 18 years ago
    last modified: 11 years ago

    Do you have an estate attorney? Seems like it might be a good idea to consult with one.

    I agree w/ the above that if you have a written offer, Sib 1 needs to submit a written counteroffer or else step aside and let the house sell. In a down/stagnant market, you don't let an offer slip away. Sib 1 hasn't madea firm offer, s/he's just indicated interest. That means nothing in the long run. A bird in hand, and all.