Do you need the second agent to buy the land? It is just dirt after all.

Is she not taking commision on you buying the land and selling your house for 4% or is your friend double dipping at your expense?

By your own admission your first agent has worked her tail off for you for a year and a half. You trusted her for that long. Tell her you found this land you want and what can she do?

She might, and probably is smarter than your "friend". Either way you owe her a lot more than a $200 gas card after a year and half.

The 4% may sound like a 'nice deal' - but what this agent is trying to do is not. She is actively going after another agent's existing client. Ugh.

Anyway, putting that aside there are some other things you need to find out about this 'nice deal'. What is the normal payout to co-operating broker in your area? In mine it is 2.5% or 3%. Million dollar + properties can get away with 2%, but otherwise 2% out to co-operating broker listings struggle to get sold in my area. No it's not right - but with 100s of very similar condo units on the market here in Hudson county, it is just the way it is.

So is your agent planning to put it out with an equal split of 2% for each side? That is not is not as great a deal for you as it sounds.
If she plans on keeping 1.5% and giving out at least 2.5% that may be better.

You need to research what is normal for your area and go from there.

I have discussed with the first agent in the past about reducing commission if she sold us a house and listed us. She said they do not ever reduce commissions. The land listing agent knows all the "dirt" (pardon the pun) about the land parcel and the issues surrounding getting it developed and permitted. The first agent could get it done but would have to go through this agent anyway. Seems kind of silly. We sold our last house FSBO. Everything worked out fine. I don't like dealing with too many mouth pieces anyway and I really dislike paying a 6-7 % commission if I don't have to. I do appreciate your feedback.
Comfortdog

I have discussed with the first agent in the past about reducing commission if she sold us a house and listed us. She said they do not ever reduce commissions. The land listing agent knows all the "dirt" (pardon the pun) about the land parcel and the issues surrounding getting it developed and permitted. The first agent could get it done but would have to go through this agent anyway. Seems kind of silly. We sold our last house FSBO. Everything worked out fine. I don't like dealing with too many mouth pieces anyway and I really dislike paying a 6-7 % commission if I don't have to. I do appreciate your feedback.

The agent spent a lot of time with you and IMO deserves to get a share of commission on this sale. After that you can be done with her, then interview agents to sell your house or do it yourself. Since you asked her about commission already, why did you continue to use her all this time?

I would agree that the agent has spent time with me showing me existing homes, but I have not enlisted her help or expertise in finding vacant parcels. All that work I have done on my own. I asked about her commission when we were discussing buying an existing home and then having to sell our own. I admit, this is a sticky widget and I am not trying to give a dig to the one agent. I appreciate the time she spent, however, there was not a house for me to purchase. If we would have bought an existing home I would have absolutely used her as the agent. She worked hard for that. I just have a bit of a problem with paying someone for something they didn't have a hand in at all. That's why I mentioned the courtesy gift. I understand the nature of sales. Even the hottest prospects don't always pan out. We have so many agents in our area. Three are my neighbors. That is why I went FSBO last time. How do you ever really choose one without offending the other? The "dirt" agent would take the whole percentage on the land and only take 1%on the house if that is what I chose to do. I would not commit to anything until I really explored the market and decide what my best options are to retain as much money in my pocket. Last time I found a realtor that we paid 500.00 for her to list us in the MLS. I marketed everywhere else. The buyers did see us on the MLS and that is how it was sold. The buyers brought their agent but paid the 3% to their agent. However, that was a seller's market 5 years ago. Not so now. A 6-7% commission is a ton of money that I just have a hard time parting with when I know I built my home and know all the selling features. When we went FSBO last time I must have been called twice a day from realtors trying to tell me why I needed them to sell my house and how crazy I was. It just made me more determined. Ok....I digress....I really don't mean to turn this into any kind of dump on realtors. I respect the profession. I really do want to do the right thing. That is why I posed the dilemma.
comfortdog

If the agent you have been working with for 1 1/2 years wasn't smart enough to have you sign a buyer agency, the agent is not entitled to make a dime.
Live and learn, the hard way.

Did you ask the agent to look for land also when she was helping you?

How many times did she take you out and how long each time (guestimate)

The land agent - how do you feel about posting one of their listings so that we can give feedback so that you know whether she's the right agent to list with, If she isn't, I don't see why you have a hard time giving agent 1 a cut in this because it isn't coming out of your pocket unless they are adjusting the land $$ amount on your end. If they are adjusting, has it really been adjusted to this market?

While you may be able to sell your house yourself, you may not be in this market. As someone selling my house, I've done what ever I can, pictures, staging, making sure the house shows well. The agent I have only has to market it so that a buyer will find it. While I could do it on my own, I couldn't do it the way my new agent does.

IMO, having your own agent may benefit you at some point. Why trust someone working for the seller?

roselvr- No, I never asked the agent to actively look for land. There was discussion at one time about building in a certain neighborhood because of it's proximity to our elementary school. I did meet with the builder of those lots-which didn't pan out, but I never requested the agent look for other parcels in any other area. Yes, she has spent time with me. I'd say every 3-4 months she will show me 2-3 houses. Each home we see for 20-30 minutes. If I would have ever signed anything what would it have looked like? With other agents I have signed something declaring I wasn't working with any other agent. The land agent is a personal friend. I know her character and integrity probably better than the first realtor. She would only offer the 4 % deal if I didn't bring a realtor with me for the land. Otherwise, I would be looking at her 6% commission from her or anyone else I would use. The first realtor works with her husband and does do a lot of business. The comp book they put together when I had them do a market analysis for my current home looked like a school yearbook! Anyhoo, my gut tells me that I need to keep the first one in the loop. After that, I guess it is fair game who I would choose to list our house if that is the way we would go.
comfortdog

"A 6-7% commission is a ton of money that I just have a hard time parting with when I know I built my home and know all the selling features."

If 6 or 7% is the usual commission for your area then you 'friend' is doing you no favors by offering you 4% unless she plans to keep only .5 or 1% for herself.

Is that the case?

You need to find out the terms. I cannot stress strongly enough how important I think it is in this kind of market to put out a payment to co-operating broker which is usual for your area. If you have a million dollar plus home or are in a very highly sought after area you may get away with less. If not, think this through very carefully.

In terms of listing your home, go with the person who you feel will do the best job for you. Question anyone who is so desperate for a listing that they promise you a price way over comps or deeply discount commission. Soon enough they will be hounding you for price reductions and suggesting increased commission as incentives. I hate when agents do that - it's like a bait and switch.

I do wish you good luck.

Hobokenkitchen-
I appreciate what you are saying, but I do think you are giving worse case scenarios. I've tried to communicate that this land agent is a friend that I do trust-I wouldn't even consider doing this if it were a stranger. She is not trying to undercut the other agent. She never approached me- I approached her. The 4% breakdown would be 1% for her 3% to the buyer's agent. That seems fair to me if she has received the whole commission for selling the land. I do not know what the commission level is for that nor do I really care. She has offered this to me because she is a) a nice person b) she is trying to be competitive in a very competitive market c) she wouldn't lose sleep if I chose not to do it. I believe she just wanted to throw it out there for me to consider. The land alone is approx 300K so she stands to make a nice paycheck from that. The other agent is a great workerbee but is not very flexible for listings. Her husband basically handles all that and has said they do not negotiate commissions. Fine. At least, they have told me that upfront. It is a sad but true fact that we have sooooo many agents in our area. They are a dime a dozen. It is sometimes hard to separate the true career agents from the hobby ones. I have often told the agents facts about the area or specs on the houses that they didn't even know themselves. I keep close tabs on the market, too.
Thanks for the info.
Comfortdog

If your question were about *legal* obligations, the simple answer is that you have no legal obligation to the first agent.

But you asked about *ethical* obligations.

IMHO, the most ethical arrangement would be to list your existing house with the realtor who has done so much for you in the past, and to buy the new dirt from your friend who is representing it. That way, each agent gets a commission for the work they have done and no one feels cheated.

"IMHO, the most ethical arrangement would be to list your existing house with the realtor who has done so much for you in the past, and to buy the new dirt from your friend who is representing it. That way, each agent gets a commission for the work they have done and no one feels cheated."

sounds fair & reasonable to me.

It may sound fair, but it may or may not be wise. The OP has said this agent specializes in escorting buyers, not listing properties. That is not an ideal person with whom to list. The OP seems to have the option of listing with the agent's husband. While that would keep the business in the agent's family, the OP would have to be comfortable with the husband, his performance, and his style. I think the husband or team sure be offered a shot at listing the OP's home, but they need to earn the listing. Same for the other agent; a reduced commission from the wrong person is not a bargain.

Two agents have now put forth significant effort for the OP as a potential buyer. In fact, the listing agent for the land may have already done so much for the OP that one could argue she was the procuring cause and should not have to share the commission on the land. Though, in a small town, the agent may or may not wish to force that point.

I'm not sure I know the solution, but OP does not owe anyone the listing.

comfortdog; I'm sorry you feel I am looking at worse case scenario, but believe me, it is best to know what can happen so you can make an informed decision.

The fact that she is taking 1% and giving out 3% is good - and that is why I asked you how that was going to work.

Of course she is lucky to have enough time and money on her hands that she can afford to thoroughly market your property for 1%.

Good luck again.

comfortdog: I've tried to communicate that this land agent is a friend that I do trust-I wouldn't even consider doing this if it were a stranger.

Oh boy. Run, don't walk, run away from using a Realtor "friend" or family member. This forum is riddled with threads concerning problems via real estate transactions when using a "friend" as a listing agent.

Even though the Realtor fees come out of your pocket, I would discourage you from determining a listing agent based on commission fees alone. Exactly how much advertising do you expect for that 1%? Are you in a buyer's, seller's or neutral market? In a seller's market, a bad agent may not hurt you too much. In a neutral or buyer's market a bad agent could cost you big bucks. I agree with Quip; a listing agent and an agent that escorts buyers are not necessarily equal when it comes to selling houses.

Agent Questions thread

Comfortdog, While I admire your interest in being fair to tha REA that you've been working with, the one that's shown you houses, but they get paid buy sellers not buyers.( well, buyers indirectly)
You as a buyer are a commodity not unlike a buyer walking onto a new car lot. If you found the car you wanted elsewhere would you return and give the salesperson some money just because he showed you a bunch of cars? Of course not. But not unlike that pesky car salesperson that keeps calling you because they may have found something to sell you, you are a buyer, more important than a seller and they want to keep you around.
Bottom line is would a REA take full commision if a buyer came along on day one of your listing, even if they did no work. Of course they would. You don't owe them anything for showing you houses that didn't fit your needs.

Thanks to all who chimed in on this. I realize that this boils down to an ethical not legal issue, but I still don't want to burn any bridges either. The first agent kind of came to me by default as my neighbor was looking at homes and asked this agent a question for me concerning some homes in our niche market. We continued to have dialogue. The car salesman illustration is an interesting one, too. Because there are sooooo many REA's in this area they do have to work super hard to have business. I respect those that are beating down the bushes for business. Why or why not people choose to go with certain agents is often times a personal decision not always based on something tangible.
comfortdog

Another question I have for you... Agent 1 - you'd mentioned you were getting email updates - do you know if it was from their site (say Remax) or was it from the MLS where the agent actually looked for houses that would match what you wanted, then sent you the MLS report to view. If it was the web site updates, that's pretty easy, all she did was set up an account for you (unless you did it), picked the price range, bedrooms / baths and locations. When something new comes on or drops in price, you get an email.

If the agent was going into the MLS and taking her time to search for you, I would say that yes, you should let her represent you for the property. If you explain it to the land agent, they would understand as I'm sure they would want you to do the same thing for them. This way both agents at least get 3% commission.

When you are ready to sell your house, find a totally different agent but be sure to interview a few to see who will give you the best bang for your buck.

Where I live, the commission on land is a higher percentage than that on houses. Land costs less than a house, but she'd be getting both sides of a higher percentage. Not a bad deal. As someone else said, the one percent on the sale of your home isn't a lot to cover marketing expenses. And your friend must be the broker as well as the agent then? One percent doesn't leave a lot to split between a broker and an agent.

Since you say you're friends, it must be fine. Otherwise, I'd worry that I wasn't getting the best price on the land. And I'd worry that my agent didn't have much incentive, once the land commission is in her pocket, to worry about selling my house at so little profit.

As far as the ethics go, you didn't sign anything, so it's up to you. Sometimes agents earn easy commissions, sometimes they work a lot and get nothing.