Sharing broker co-op with buyer typical?

[irvinerealtor]

Getting back to the original question of "is sharing broker co-op with buyer typical?" I'd have to speculate that the answer is generally "no" so don't kick yourself over it. But there are a wide number of agents that do, so you can plan for it when the next time comes up.

Some takeaways:

1. If your intention is to work with someone with the expectation of receiving a portion of the broker co-op back, you should communicate it up front, and get it in writing. (You'd be surprised about how often "My word is gold" turns into "I don't recall ever having a conversation like that" when someone's holding a five-figure check. It's fair to you and it's fair to the agent as they know what they're getting into from the start.

2. Quantify what you're agreeing to. Get specific. The agreement that I use states who gets what and where the dollars go. Martin is correct that for the broker that I hang my license with, they take 26% of every dollar that I bring in. That's the cost for me to be working with a well-known, reputable broker. Big brands have a cost. The upside is that CB is the 800lb gorilla if things get messy, so it can be a good insurance policy to have, and deep pockets to sue if a client feels like they got hosed.
  There are also niche brokers like the one where Martin hangs his license, that I believe charge the agents a lower fee (either a lower % or by a flat fee per transaction) and that may have more funds to negotiate with after the company dollar has been paid.

3. Keep open communication. Ask for help where you need it. Even the best agents can't read your mind. "Can you recommend reputable contractors?" "Should I splurge for the audio system?" and "Should I get an inspection?" are all fair and good questions to ask with your agent.

4. Enjoy the ride. At the end of the day, hopefully nobody is forcing you to buy the home. And if you are purchasing here in Southern California, know that you're buying the finest land this great country has to offer (with the notable exception of John's Creek, GA).

-IR2

 

[Paris167]

Again I ask, has your realtor worked with you touring other homes?

Yes we did a few resale tours. But we decided on new construction quickly and took the realtor to OH.

The sharing of broker co-Op seems very typical given everyone I've talked to who purchased at OH including our neighbor got a kick back.

Well lesson learned for next time definitely
Thanks for the input TI

 

[rkp]

Again I ask, has your realtor worked with you touring other homes?

Yes we did a few resale tours. But we decided on new construction quickly and took the realtor to OH.

The sharing of broker co-Op seems very typical given everyone I've talked to who purchased at OH including our neighbor got a kick back.

Well lesson learned for next time definitely
Thanks for the input TI

curious why you took your realtor to OH in first place.  did they suggest OH or you told them you are interested in OH and they asked to sign you in?  the broker co-op in new construction is a marketing cost and is meant to find buyers who otherwise might have not heard about the development.

related anecdote, we were at pavillion park a couple months ago and a realtor was literally in parking lot soliciting buyers before they walked into the door to let them take them in and split the commission.  saw a few people take them up on it but most were baffled and quickly walked away.  i am surprised the development didn't call the cops or report them...felt really unethical

 

[irvinehomeowner]

Again I ask, has your realtor worked with you touring other homes?

Yes we did a few resale tours. But we decided on new construction quickly and took the realtor to OH.

The sharing of broker co-Op seems very typical given everyone I've talked to who purchased at OH including our neighbor got a kick back.

Well lesson learned for next time definitely
Thanks for the input TI

Was there a reason you took your realtor to OH with you? I would say that sharing co-op isn't that typical because most buyers of new homes go there on their own. The only time realtors go with them is if they are unfamiliar with the area or because there is a co-op and a) the realtor knows it or b) the buyers know it and have made an agreement with their realtor to share it.

Let's rephrase this question:

Is sharing the realtor's commission on a *resale* purchase typical?

So when you were touring resale homes with your realtor, did the conversation ever come up about sharing his/her commission if you bought a resale? Probably not, as is the case with many realtors.

There are realtors who do but it all depends on the agreement you have with them.

For new construction, it seems more common because there is less "work" done by the realtor, however, there are a few good ones who will be with you up until and even after you close and those are the ones who deserve their co-op. Granted, there are some who just sign the referral paper and you never see them again.

As for your case, since your realtor did work with you on touring resales, I would consider it as payment for that time and effort and just enjoy your new home. And at least if you ever decide to sell, move-up or buy another, you have resources here you can turn to (as well as realtors) who will be more upfront about what can and can't be done.

 

[Paris167]

So the story is initially we were looking outside of irvine so these realtors don't even do irvine real estate.

Then when we decided to buy is OH we introduced OH to them, not the other way around. We had been looking at a few resales outside of Irvine and then we said get we'd like to buy in OH.

So then they say well make sure you go with us the first time to OH because otherwise we cannot represent you during the process in the new home sale. Now looking back at it what is there to represent? they just walked in and signed their name the first time and then were there for the walk through only. They never disclosed the co-op to us. So they want $15k for their time on a few resales they showed us?

 

[zubs]

That realtor is bad for withholding information from you.  You are probably out $5,000.  I know it's a lot of money, but sometimes you gotta pay school tuition.

 

[rkp]

The realtor was looking only at $ signs when they said "well make sure you go with us the first time to OH because otherwise we cannot represent you during the process".  There is no work done at all after the initial visit.  Sure they can give guidance and be a good resource but they are not managing the transaction.

Frankly I would push this on them.  Bringing them in didn't help you and only helped them.  Why did they insist or suggest going in?  What representation did they perform?  Did they negotiate for you or get you bigger discounts?

Honestly the more I think about it, I would just let it go.  Like I said earlier, you didn't actually lose any money.  You just didn't gain extra.  It isn't worth fighting for.

 

[The Motor Court Company]

"unintentionally" send your realtor your rant on that asshole driver who followed you home. maybe he/she will cough up the $5000.

 

[Irvine Dream]

So the story is initially we were looking outside of irvine so these realtors don't even do irvine real estate.

Then when we decided to buy is OH we introduced OH to them, not the other way around. We had been looking at a few resales outside of Irvine and then we said get we'd like to buy in OH.

So then they say well make sure you go with us the first time to OH because otherwise we cannot represent you during the process in the new home sale. Now looking back at it what is there to represent? they just walked in and signed their name the first time and then were there for the walk through only. They never disclosed the co-op to us. So they want $15k for their time on a few resales they showed us?

I am probably going to get flak on this but that is what anonymous forums for right? 

Paris, for some reason I initially pegged you incorrectly as white but now I am guessing you are more Asian (like I am).  It seems it is typical for Asians to go back and question whether what we are paying is actually worth for what we received and trying to re-negotiate after the fact.  If you didn't ask for it prior to going in to OH then it is best to suck it up and move on.  If there was no agreements up front then it is just up to the goodwill of the realtor.

 

[bones]

I know I'm in the minority here but I knew about the co-op prior to purchasing and really didn't care for a split from my broker.  Like others have mentioned, it just didn't feel kosher to me (yes I know it's legally ok and what not, so this is just my personal viewpoint).  It's not my realtor's fault that I decided to buy new construction.  The realtor did a fantastic job for me on the sell side (at a discount) and we continue to have a relationship that will hopefully extend to future deals.

 

[usctrojancpa]

I know I'm in the minority here but I knew about the co-op prior to purchasing and really didn't care for a split from my broker.  Like others have mentioned, it just didn't feel kosher to me (yes I know it's legally ok and what not, so this is just my personal viewpoint).  It's not my realtor's fault that I decided to buy new construction.  The realtor did a fantastic job for me on the sell side (at a discount) and we continue to have a relationship that will hopefully extend to future deals.

You bring up a very valid point.  A good realtor will look to build a long-term lasting working relationship with their clients where the clients will to the realtor for all their future real estate needs as well as provide them referrals for people that they know who are looking for a good realtor.  From a realtor's perspective, there's nothing better than repeat and referral business.  I provide rebates for all my clients because that's what I choose to do and use it as a way to thank them for their business.  I also follow a saying that my grandfather used to tell me...."give up a little now to get more later"

 

[Paris167]

I know I'm in the minority here but I knew about the co-op prior to purchasing and really didn't care for a split from my broker.  Like others have mentioned, it just didn't feel kosher to me (yes I know it's legally ok and what not, so this is just my personal viewpoint).  It's not my realtor's fault that I decided to buy new construction.  The realtor did a fantastic job for me on the sell side (at a discount) and we continue to have a relationship that will hopefully extend to future deals.

You bring up a very valid point.  A good realtor will look to build a long-term lasting working relationship with their clients where the clients will to the realtor for all their future real estate needs as well as provide them referrals for people that they know who are looking for a good realtor.  From a realtor's perspective, there's nothing better than repeat and referral business.  I provide rebates for all my clients because that's what I choose to do and use it as a way to thank them for their business.  I also follow a saying that my grandfather used to tell me...."give up a little now to get more later"

I couldn't have said it better myself, which is why I think every realtor should be up front about the process and offer the buyer something back. Because yes today it's a $15 k co-op but 8 years later it could be a $3-4million resale with a nice commission.

USCTrojanCPA you are my kind of realtor (for next time) 

 

[usctrojancpa]

I know I'm in the minority here but I knew about the co-op prior to purchasing and really didn't care for a split from my broker.  Like others have mentioned, it just didn't feel kosher to me (yes I know it's legally ok and what not, so this is just my personal viewpoint).  It's not my realtor's fault that I decided to buy new construction.  The realtor did a fantastic job for me on the sell side (at a discount) and we continue to have a relationship that will hopefully extend to future deals.

You bring up a very valid point.  A good realtor will look to build a long-term lasting working relationship with their clients where the clients will to the realtor for all their future real estate needs as well as provide them referrals for people that they know who are looking for a good realtor.  From a realtor's perspective, there's nothing better than repeat and referral business.  I provide rebates for all my clients because that's what I choose to do and use it as a way to thank them for their business.  I also follow a saying that my grandfather used to tell me...."give up a little now to get more later"

I couldn't have said it better myself, which is why I think every realtor should be up front about the process and offer the buyer something back. Because yes today it's a $15 k co-op but 8 years later it could be a $3-4million resale with a nice commission.

USCTrojanCPA you are my kind of realtor (for next time) 

Thank you for the kind words.    It's a shame that so many realtors are so focused on what they can make on one transaction at the moment.  The realtor commission model is old and outdated so I've tried to tie in a "work/effort expended" model when it comes to rebates for buyers and a unique listing commission model that both try to better align my incentive with my client's interest.  Think about how realtors in other states or even counties in CA make much less just because the prices of the homes are cheaper, they still do the same type of work.  At the end of the day, it still comes down to executing for clients where the rebate is a cherry on top of the sundae. 

 

[homer_simpson]

Hmmmm.. I think I should get into the real estate business as an agent now.. hmmm...

 

[lnc]

I know I'm in the minority here but I knew about the co-op prior to purchasing and really didn't care for a split from my broker.  Like others have mentioned, it just didn't feel kosher to me (yes I know it's legally ok and what not, so this is just my personal viewpoint).  It's not my realtor's fault that I decided to buy new construction.  The realtor did a fantastic job for me on the sell side (at a discount) and we continue to have a relationship that will hopefully extend to future deals.

You bring up a very valid point.  A good realtor will look to build a long-term lasting working relationship with their clients where the clients will to the realtor for all their future real estate needs as well as provide them referrals for people that they know who are looking for a good realtor.  From a realtor's perspective, there's nothing better than repeat and referral business.  I provide rebates for all my clients because that's what I choose to do and use it as a way to thank them for their business.  I also follow a saying that my grandfather used to tell me...."give up a little now to get more later"

I couldn't have said it better myself, which is why I think every realtor should be up front about the process and offer the buyer something back. Because yes today it's a $15 k co-op but 8 years later it could be a $3-4million resale with a nice commission.

USCTrojanCPA you are my kind of realtor (for next time) 

You won't regret using USC for your next real estate transaction, I can attest to that.

There's not much need for a broker in purchase new construction home but for those new home listed in the MLS or during a slow market conditions, broker can negotiate better terms, design center upgrades etc for the buyers and I've seem USCTrojenCPA done those things in the past for his clients. 

 

[irvinerealtor]

Not to throw salt in the wound, but I did cut a check for $16K today for a new owner in OH.

I also agree with the above sentiments.
My grandfather owned a grocery store on the LB Peninsula when I was growing up (at Ocean and 62nd, which has been converted into a couple of condo complexes). Among the many lessons he gave me before he passed away was to live by the creed:

I recall the kind old grocer
when the sugar he would pour,

How he'd tip the scale to balance,
then he'd add - just a little bit more.

My, how his business prospered,
folks were always at his store,

For he'd give an honest measure,
then he'd add - just a little more.

So it is with life, my brother,
we would build a better score;

If, when we've done what is expected,
we'd add - just a little more.

Merry Christmas and Happy Holidays to all,
-IR2

 

[irvinehomeowner]

I know I'm in the minority here but I knew about the co-op prior to purchasing and really didn't care for a split from my broker.  Like others have mentioned, it just didn't feel kosher to me (yes I know it's legally ok and what not, so this is just my personal viewpoint).  It's not my realtor's fault that I decided to buy new construction.  The realtor did a fantastic job for me on the sell side (at a discount) and we continue to have a relationship that will hopefully extend to future deals.

You bring up a very valid point.  A good realtor will look to build a long-term lasting working relationship with their clients where the clients will to the realtor for all their future real estate needs as well as provide them referrals for people that they know who are looking for a good realtor.  From a realtor's perspective, there's nothing better than repeat and referral business.  I provide rebates for all my clients because that's what I choose to do and use it as a way to thank them for their business.  I also follow a saying that my grandfather used to tell me...."give up a little now to get more later"

I couldn't have said it better myself, which is why I think every realtor should be up front about the process and offer the buyer something back. Because yes today it's a $15 k co-op but 8 years later it could be a $3-4million resale with a nice commission.

Well, like everyone is saying, lesson learned.

You are now more educated than you were before, so next time, when choosing a realtor, you will know what questions to ask.

If you would have found TI before buying in OH, you might have been able to share that co-op but like bones said, it also depends on your relationship with them.

What would be a fair split? 50/50 or weighted more heavily to you or to the realtor?

In your case, I don't know how many is "toured a few resale homes outside of Irvine" but if you've been working with them for more than a few months, that probably leans towards 50/50. If this was the 1st time you used them, then weighted towards you... and if you are like me and have been working with a realtor for years (thanks Scott/IrvineRealtor!), you would put it more on their side.

I'm actually surprised you are just finding out about the co-op now since this sticky post:
http://www.talkirvine.com/index.php/topic,2700.0.html

... has been at the top of the Irvine Real Estate section for over 2 years.

 

[Paris167]

I know I'm in the minority here but I knew about the co-op prior to purchasing and really didn't care for a split from my broker.  Like others have mentioned, it just didn't feel kosher to me (yes I know it's legally ok and what not, so this is just my personal viewpoint).  It's not my realtor's fault that I decided to buy new construction.  The realtor did a fantastic job for me on the sell side (at a discount) and we continue to have a relationship that will hopefully extend to future deals.

You bring up a very valid point.  A good realtor will look to build a long-term lasting working relationship with their clients where the clients will to the realtor for all their future real estate needs as well as provide them referrals for people that they know who are looking for a good realtor.  From a realtor's perspective, there's nothing better than repeat and referral business.  I provide rebates for all my clients because that's what I choose to do and use it as a way to thank them for their business.  I also follow a saying that my grandfather used to tell me...."give up a little now to get more later"

I couldn't have said it better myself, which is why I think every realtor should be up front about the process and offer the buyer something back. Because yes today it's a $15 k co-op but 8 years later it could be a $3-4million resale with a nice commission.

Well, like everyone is saying, lesson learned.

You are now more educated than you were before, so next time, when choosing a realtor, you will know what questions to ask.

If you would have found TI before buying in OH, you might have been able to share that co-op but like bones said, it also depends on your relationship with them.

What would be a fair split? 50/50 or weighted more heavily to you or to the realtor?

In your case, I don't know how many is "toured a few resale homes outside of Irvine" but if you've been working with them for more than a few months, that probably leans towards 50/50. If this was the 1st time you used them, then weighted towards you... and if you are like me and have been working with a realtor for years (thanks Scott/IrvineRealtor!), you would put it more on their side.

I'm actually surprised you are just finding out about the co-op now since this sticky post:
http://www.talkirvine.com/index.php/topic,2700.0.html

... has been at the top of the Irvine Real Estate section for over 2 years.

I guess I missed that sticky note 

To me fair is fair and 50% would be absolutely the way to go. But I guess my realtor feels that showing me resale homes 5 times over a span of 2 years means they deserve all and I should get nothing and to them that is fair. Never mind the fact that I introduced OH to them and was loyal enough to take them in when we purchased new.

And so yes - definitely lesson learned. I'm young and I'll be buying plenty more properties at higher price points in OC in my lifetime and my loyalty certainly will only stay with those loyal and fair to me. It's ok, they can keep their $15k. I walk away with knowledge for all my future transactions.

 

[qwerty]

So 6 visits for 15k comes out to 2.5k per visit. Must be nice to be a realtor

I need to take the real estate exam and mandarin classes ASAP.

 

[lnc]

So 6 visits for 15k comes out to 2.5k per visit. Must be nice to be a realtor

I need to take the real estate exam and mandarin classes ASAP.

Well, I don't think it is always that easy.  What happen if you got a client and after countless visit to open houses and numerous grand openings and did not purchase a home?

I think IR2 can tell you a story about a client of his who's looking for a 3CWG home in Irvine....