NetNews Usenet Archive 1992 #27/NN_1992_27.iso/spool/misc/consumer/house/14767

Internet Message Format | 1992-11-18 | 3.4 KB

Path: sparky!uunet!stanford.edu!unixhub!slacvm!young
Organization: Stanford Linear Accelerator Center
Date: Wednesday, 18 Nov 1992 09:50:14 PST
From: Charles Young <[e-mail]>
Message-ID: <[e-mail]>
Newsgroups: misc.consumers.house
Subject: Re: How to tell a REAL buyer's agent
References: <[e-mail]>
 <[e-mail]> <[e-mail]>
 <[e-mail]>
Lines: 58

In article <[e-mail]>, [e-mail] (Mike Dedek)
says:
>
>In several articles, many write:
>|> |> >If the agents are getting paid by the seller to begin with then they
>aren't
>|> |> >really 'buyers' agents, they're 'selling' agents.
>|> |>
>|> |> If you want to pick nits, there is no such thing as ANY agent being
>|> |> paid by the seller, 100% of the RE fees come out of the buyer's pocket,
>|> |> as they are tacked onto the price of the house.
>|>
>|> You can use exactly the same logic to demonstrate that the agents are      g
>gettin
>|> paid by the seller, since their fees reduce the amount received by the
>|> seller.  Sure, the money doesn't pass through the seller's hands, but it is
>
>Disclaimer:  The following applies to _most_ states in the USA.

                                        ^^^^
                                       ^^^^^^
"Most states" in this context does not include California, where fiduciary
responsibility is totally divorced from who's paying the commission. An
agent incurs legal responsibility (and liability) even if nobody pays any
commission.

>
>Legally, the agents are working for and under contract to the seller.
>Legally,
>they get paid by the seller.  If something bizarre happens (like the seller
>arranges to bypass closing and all that stuff, thereby bypassing the agents'
>getting their check), the agents can sue the _seller_ for breach of contract.
>This has nothing to do with the price of the house or whether the agents' fees
>are added to the worth of the house to get selling price or subtracted from it
>to reduce the seller's proceeds.
>
>Legally, for an agent to have a fiduciary responsibility to the buyer, a
>contract must exist between the buyer and the agent.  For a contract to be
>valid and binding, some consideration must be given.  In this case, the
>buyer must give the agent consideration in return for the work the agent
>will do.  This is generally in the form of a lump-sum cash payment, but
>may take other forms including a percentage of the purchase price of the
>house.  Sometimes the selling and buying agent will agree to split the
>commission, but to obtain a true buyer's agent his consideration should
>not be connected in any way to the seller's agent's commission.
>
>If I hire a buyer's agent for $2000, and buy a house, I will pay the agent
>$2000.  I really don't care whether the seller's contract with his/her agent
>specifies 6%, 3%, or 99% commission.  I expect my buyer's agent to get me
>the best possible deal and I'll pay him his money.  If the seller's agent
>gives my agent money (i.e., splits commission) then I expect that money
>(providing, of course, I specified it in the contract).  The buyer's agent
>will have no right to it as he is working under contract to me for a specified
>consideration ($2000).  His responsibility to me includes getting the lowest
>price possible including any "rebates" from the seller's broker.
>
>-Mike
>