Lisa and Jim's Northern Nevada Real Estate Blog: And we call ourselves "Professional"!

And we call ourselves "Professional"!

Well, this is interesting!  We call ourselves professional ... Are We?

We got a call from an out of area agent to list his parent's home.  They have been listed with another - not so busy - agent for many many months.  No showings, no activity!

We look them up in MLS and see TOM (Temporarily off the market).  We bring it to the attention of the referring agent and ask him, "Is the listing canceled?"  He assures us that it is and please keep the appointment with his parents, because, "They really need to sell!"

So ... we keep the appointment.  The house is great but grossly over priced.  We tell them we can help them sell it but we need a 15% price reduction.  They agree!  We ask about the prior listing - which started 20% too high.  They said it was "handled!"  I said, "Let's call the prior listing agent."

We called and asked her, "Did you cancel this listing?"  I'm sure you can guess, the answer was, "NO!" 

She maintained they took the listing off the market to facilitate a medical procedure with the assurance that the house would be back and active once the client was well again.   A true story according to the clients. 

Anyway ... I say to the current listing agent, and the referring agent, "This is not my affair, the property is listed, I'm not getting involved, work it out!  Let me know when it's ok to talk with the clients."

Now- The fight is on.  Both the Referring Agent and the Listing Agent want the referral fee!  The Listing Agent feels justified because she has, "Done so much work".  The Referring Agent feels justified because, after all, his parents need to move and their health is failing, and he thinks the other agent hasn't lived up to her part of the bargain.  (She took a one year over priced listing from two aged clients who really really need to move - never had one showing in 4 months - and refused to allow them to move the listing to another agent.

I get calls from both agents telling me their sad tales.  I'm not legally able to interfere with a contract that both of them are asking me to pass judgment on.  What's up with that?

My final frustrated advice to both of them was this, "Split the Dam fee!  Or ... Give up the Dam Fee!  Duh! We're talking $2,167.00 dollars for heavens sake!  The overriding, a least should be overriding, (but seemed to get lost in the shuffle) factor is ... Mom and Dad Seller Need to Move!

So, here's the question!  If we call ourselves "professional", and want to be treated "professionally", shouldn't we act "professionally?

I don't know any other group of paid individuals who would deny patrons the help they need and seek on the basis of dollars.  Doctors don't prohibit second opinions, or seek monetary compensation for sending a patient to a specialist.  Neither do Attorneys, Accountants, Financial Advisors, Dentists, or any other profession? 

Not one profession except real estate agents seeks compensation for providing referral services.  Further, not one profession except real estate agents would even consider strapping a consumer into a contract for services that they could not provide.  And ... then ... seek to prevent the consumer from obtaining those services from another source without being paid a portion of the compensation.  Is it any wonder we suffer from such low public opinion?   

I favor legitimate referrals for the sake of securing knowledgeable and competent services for our customers, clients and family.  However, once an agent's fee takes precedent over providing the service the customer needs and deserves to receive, that agent has lost their right to be called professional and is little better than a crook in my opinion.    

Comment balloon 13 commentsLisa Wetzel • September 08 2007 02:29PM

Comments

It never surprises me how petty some people can be. Everyone needs to forget the referral at this point and move on.
Posted by James Gordon, REALTOR, PBD SFR SRS (Sibcy Cline Realtors®) about 11 years ago
I'm curious as to why the listing agent things she's entitled to a fee?  She didn't recommend you to them, and obviously hasn't gotten the job done-so she should bow out gracefully and be done with it.  The kid may very well be using the referral fee to help his folks out down the road, who knows.  It's a shame though.  Greed holding sellers hostage.
Posted by Leigh Brown, CEO, Dream Maker - Charlotte, NC (Leigh Brown & Associates, RE/MAX Executive) about 11 years ago

Where did the rumor get started that other fields do not accept referral fees?

Referral fees are plentiful in the legal field and are usually 25%.  Most attorneys refer if a client needs services that are not their speciality. 

I have worked with attorneys for years.  They will gladly give up 25% for a good personal injury case.

Posted by Lenn Harley, Real Estate Broker - Virginia & Maryland (Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate) about 11 years ago

I agree referral fees are a problem.  Referrals where you have to pay a fee only squeeze you.  There is clearly too much pressure from all sides looking to grab a buck.  Gone are the days where you could take any listing at any price, slap some additional money on the sales price for closing costs and commission and have the home sell.  I always tell out of area agents who have family properties to sell that instead of paying a referral fee, I will reduce my listing commission for their family member.  When I tell the family about this, they are always shocked that Jr. was trying to make a buck off them without telling them.

Posted by Dan Homan (Coldwell Banker Ellison Realty, Inc) about 11 years ago

And then we wonder why Realtors have a negative outlook from the general public.  If all else fails then split the referral and move on.

David Slavin, ABR www.SellMyHouseDave.com

Posted by David Slavin, CDPE, ABR, SRES Keller Williams Premier (Keller Williams Premier) about 11 years ago

Personally, I leave something like this behind and move on to something more productive.  (Of course, I don't remember ever having a listing terminated and would not want it as a new listing of my own as I have more productive work.)

My motto is "There is no whining in real estate".  Just move on and move forward. If you get caught up in this it cost you time which cost you money.....There is my .00124 cent (after tax dollars). 

Posted by Julie Chapman, New Homes Sales Lakeland Florida (DR Horton ) about 11 years ago
It's not that you "don't care" ... you "cannot allow yourself to care".  You don't have time to get wrapped up in this kind of dispute.
Posted by Larry Wright (nwRealty.Com) about 11 years ago
I think the current listing agent needs to step away...lessons learned.  I always tell my clients that they can fire me at any time if they are unhappy.  Perhaps a compromise would be for the sellers to reimburse her an out-of-pocket advertising.  That way she is just out her time spent.
Posted by Nora Adkins (Realty Executives) about 11 years ago

Lisa,

Nora's solution is the best! Thanks,   Fran

P.S. Nice post!!!

Posted by Fran Gaspari, "The Title Man" - Title Insurance - PA & NJ (Patriot Land Transfer, Inc.) about 11 years ago

Fran, Nora, and Everyone,

Thanks for the great advice. 

And NOW! ... The Rest of the Story!

Listed the house yesterday, (at a very reduced price).  Referring agent - the son of the customer's - gave in to the Listing Agent's  demands.  She gets the referral fee and we are marketing the house.  Good!   Bad!  Hard to to say! 

Now,  I have to do 100% of the job for 75% of the fee.  I'm not emotionally attached to the % and love the challange of getting these fine folks where they need to be.   Luckily ... since listing with us, these clients have a better than average chance of moving and we have the opportunity to sell another fine home.   

Posted by Lisa Wetzel, CDPE, SFR carsonvalleyland.com (RE/MAX Realty Affiliates) about 11 years ago

Lisa,

Way to take the high road---and win! Thanks,   Fran

Posted by Fran Gaspari, "The Title Man" - Title Insurance - PA & NJ (Patriot Land Transfer, Inc.) about 11 years ago

Question question for you.  I'm in a somewhat similar situation where my in-laws are in a 6 month listing agreement with an agent that has been completely unable to move the property in the 2.5 months we've been on the market, and she's undermined our price in conversations with potential buyers.  We've asked to be released from the listing agreement, and initially they refused.  They're now saying they will release but for a 30% referral fee if the house sells within the time period of the original listing agreement.

I have a few questions on the customs in which the referral fee is paid.  Is 30% typical / standard?  Is it paid only on buyers that the current agent has shown the property (and provided to us in a list)?  Is it paid for any sale to any buyer?  Does the seller pay the referral or the new listing broker?

The current agent only wants to put one client on her "exception list."

Sorry for the barrage of questions, we're in a tough spot right now.

Thanks! 

Posted by Dave about 11 years ago

Dave,

Like I originally said, how can a professional sign on to provide a service, fail to provide it, and hijack the customer for part of the fee for allowing the customer to seek better service elsewhere?  I don't understand!!! 

Here's the bottom line, most respectable agents that I know will stand behind their ability with a "money back guarantee", that is ... they are confident in their ability and confident in their service.

I tell my customers that I will allow them to cancel my contract if I fail to provide the service I promise.  I never promise to sell the property, no one can guarantee that.  I always promise to provide them with the best service we are capable of delivering to them.  If we fail to do that ... I'll allow them to cancel our contract.  If we do provide our best and our best fails provide a buyer, that's a different story.  Luckily for us ... we work hard, tell the truth, do what we say we will, and COMMUNICATE with our customers!  Canceled listings are just not one of our problems.

In your case, your in-laws have a contact, I'm not an attorney but that's my 2 cent opinion.  In this case, short of charging the current listing agent with negligence and battling it out, I don't know how you can remove them from their contract.  (Some agents will do anything to make a buck!)

30% is high.  They are holding the listing hostage to get an extraordinarily high fee.  (Shame)    It seems they want a referral fee, that's a fee on any buyer that steps up during the time frame of the original listing period.  The "exception list" of purchasers is another thing.  That list is for any buyer that buys the property, after the original listing expires, that is shown the property during the original listing period as a result of the efforts of the original listing agent.  This is usually referred to as the "Protection Period" 

READ YOUR CONTRACT!  In my board the contract says that this "Protection" is "Not valid if the property is relisted with another agent!"  It protects the Seller against "Double Jeopardy" Likely ... the agent you are dealing with is ill informed and mixing up all the different aspects of this dilemma.  Always read and understand what you are dealing with.

My advice, try to reason with them.  HA HA!  Next have your in-laws explain to them in writing exactly why they are unhappy and what they expect.  (Remember, if you are a REALTOR you can't interfere with someone else's contract.)  Not selling a property is not "negligence".  Not providing the service they claimed to provide is.  Offer them a chance to fix it (a short chance).  If they can't or won't, your in-laws should demand the cancellation! 

Now, here's the real life truth about the situation!  Most of the time there are two sides to every story.  Usually, the truth is somewhere in between the two sides.  Don't interfere.  Let them work it out.  If they need legal advice, tell them to get an attorney.  If you aren't an attorney, don't pretend to be one - especially for friends and family, they are ALWAYS! The worst!

Good Luck!

Posted by Lisa Wetzel, CDPE, SFR carsonvalleyland.com (RE/MAX Realty Affiliates) about 11 years ago

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