Real Estate Law
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Generally, yes you can make any demand in a counter-offer that you like. However, if you're the seller, you likely have a listing contract with the realtor, and that cannot be changed by these negotiations because it doesn't involve your relator/and because your realtor must consent in order to make this change.
Your better option would be to reach out to your relator and tell him/her that you'll make a certain counter-offer IF he/she agrees to a reduction in commission.....if so, you and the realtor an make an agreement based on the resolution you reach.
Thus, the buyer would likely agree to this because it doesn't affect him/her because the buyer isn't paying the realtor's fee. So, your issue is really with your realtor. One alternative is that you could ask the buyer to pay part of the closing costs, which would have basically the same affect on things.
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I practice in Tennessee, and as I said above, you can make this part of your counter-offer, but if this was agreed to or accepted, the agreements you and the buyer have with your respective realtors would have to be amended.
In other words, all parties (buyer and his/her agent and you and your agent) would have to agree to this change before it would be enforceable.
Your counter offer is not binding on the buyer's realtor IF the buyer accepts.
As I said above, EVERYONE involved (buyer, buyer's agent, seller and seller's agent) would have to agree to the reduction of the fee. So, if the buyer's agent refuses to reduce his fee, then the change will not occur because the buyer CANNOT breach his contractual agreement with his realtor.
So, the counter-offer would fail.......
I'm doing my best to do just that....sorry if it isn't clear.
As stated above, yes, you can state what you're wishing to in your counter-offer.....BUT even if the buyer ACCEPTS, it is not a done deal.
It's not a done deal because you and the buyer have contracts with your respective realtors, and you must honor those contractual terms. SO, if the buyer's realtor is due a certain commission from the sale of the property, and the buyer now wants to reduce that commission, that can ONLY happen IF the buyer's realtor agrees to the reduction.
I've done some additional research on this issue........and what I've found says that it is really not appropriate to include fee reductions in OFFERS and COUNTER-OFFERS because realtors are not parties to the purchase contract (which is what I've mentioned above). Commissions, including the amount to be shared by the listing office with the buyer's agent, are determined as a result of separate contractual agreements; and nothing agreed to only by the two parties to the purchase contract can change that.
Also, if the buyer's agent is a member of the National Association of Realtors, it is POSSIBLE that writing the offer as suggested would be contrary to the NAR Code of Ethics, to which all Realtors subscribe. Standard of Practice 16-16 refers to using the terms of an offer to attempt to modify a listing broker's offer of compensation and the issues that could arise. The logic of this, clearly, is that the offer cannot be used as a tool to reduce the amount of commission for which the listing agent has contracted. The reasonable presumption here is that there is only so much commission to go around, and any increase to the buyer or tenant's agent would result in a decrease in that which goes to the listing agent. But that result is just what is happening in the scenario we have envisioned. By the same reasoning, then, it would be unethical for a Realtor to construct such an offer, even if his principal wants him to.
So, based on all of this, it is really futile or not necessary/relevant to include this in the counter-offer because the buyer's realtor is the ONLY one who can make the decision to reduce his fee.
It doesn't matter what the buyer wants to do and the buyer CANNOT agree to the reduction if his agent doesn't want it ---- which is what you can deduce from the fact that the buyer's realtor refuses to tell the buyer of this option.
Thus, if the buyer's realtor refuses to tender the offer at a reduced commission to the buyer, then that's really where it is going to end......because the buyer has no authority to force his realtor to reduce his fee.
That right -- if the buyer's agent isn't agreeable, then you're not going to get anywhere....and that's exactly what the buyer's realtor is trying to avoid with his client by not presenting this --- he doesn't want to be forced into having his client ask him to do this to close the deal......
If the buyer wants his agent to take the reduction, and the realtor refuses, that would be a contact issue between those parties, and how things would shake out depends on what their contract says.
But, if the contract expired, it could be possible that the buyer could buy the property with a new/different realtor (again, depending on what the contract between them says).
I don't know that this would be grounds to fire his realtor (without exposing himself to liability) because he's contracted to a certain fee......so if he fires the realtor, he's probably going to get sued.
I understand what you're saying, but the buyer's agent has a contract for a certain fee, and if he wants to put $20k at risk for the other $4k, that's his call.
The buyer's realtor may tell you the same logic --- that if you're willing to risk the sale for the 1%, that's your call.
....and you'd both be correct -- it's up to you if you won't do the deal with the 1% included, and it's up to the realtor if he won't reduce his commission.
I've never seen that in a real estate contract, but it is certainly possible that you're correct. Obviously, all that matters in this case is what is in this particular contract.
Also, if you believe that the realtor for the buyer isn't acting within the rules that govern him, you can report him to the Tennessee Real Estate Commission (https://www.tn.gov/commerce/section/real-estate-commission).
But, what the realtor is doing isn't likely improper because his commission agreement is not part of any deal you and the seller reach on the sale of the property. That's what the realtor rules above are referring to -- that the commission set by separate contract should not be used as a bargaining chip in negotiating the sale of the property.
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