Need Advice - Agent/seller Dilemma
An agent, whom I worked with previously, approached me about a property he knew was about to come on the market. He organized a showing, but afterwards, told me that he did not yet have the listing from the seller. A few days later I noticed a one-line newspaper add saying there was an apartment complex for sale and giving an email address for contact. I wrote to the email address and when I received a response from the seller I realized it was the same property I had already seen. The agent is still trying to get the listing, and he organized a second viewing of the property for me. I told the agent about my contact with the seller. It felt like the right thing to do. I then told him that I'm very happy to purchase this property through him, but if he wasn't able to get the listing, I would have to deal directly with the seller.
My question is what do you think I should do now, and how long should I wait before I do it?
Thanks 
[addsig]
If your agent does not get the listing and you end up purchasing the property, I might throw him a bone to keep him happy. Seems like this person is doing work for you, and it only seems right to reward him/her. I think that this would be a relationship you would want to keep even if this particular property doesn't work out. Just think of all the other deals he/she would bring to you. Remember, you are probably wanting to build a long term relationship.
Ryan J. Schnabel
I second the bone throw, $500 for one showing and thier watchfull eye may me appropriate. This will keep them looking for you in the future and they really didn't do too much for work otherwise (not deserving of a full commision).
It might be worth mentioning (or maybe not) that the property in question is a smallish apartment complex that's going to go for something between $500k-$750k.
I like the idea of throwing him a bone, but I wonder if $500 might be seen by him as a slap in the face, considering that his commission for brokering this deal would probably be over $30k.
Also, I'm in negotiations on another (though much smaller) property through this same agent. And I'm looking at yet another small property through him right now.
[addsig]
If you want to use the agent, you can. Have him write up the offer with his commission percentage listed in the offer as being the responsibility of the seller to pay. I'm sure the seller will be more than happy to go with it since he is already talking to your agent about listing the property anyway. I often approached "For Sale by Owner" sellers with this when I was actively selling real estate and they almost always said "if you bring me an offer, I'll pay you a commission" even though they wanted to keep the possibility of selling the property themselves open and didn't want to list with me. Another advantage is the the agent will be working as your "buyers agent" in this situation representing you and not the seller or acting merely as a transaction agent. That applies if your state has these type agencies available.[ Edited by john738 on Date 02/23/2004 ]
alexlev,
My experience in PA is that when agents show FSBO properties to prospective buyers, they have the seller sign a document whereby the seller pays X$ of commission to the selling agency if that agent's buyer winds up buying the property. Hopefully, your agent did that as well. If your agent didn't do that, he should have done that.
If you want to submit an offer on this property, I would be inclined to tell your agent ASAP and point blank ask if the seller has agreed to pay his commission. The bottom line is that, unless you have signed some agreement with your agent to pay him commission if a seller does not pay his commission, I don't think you have an obligation to pay him anything. However, as was pointed out, you want to continue a good working relationship. I would consider $500 real cheap given the price of the property.
The commission is an issue to be worked out between seller and your agent. Hopefully, if your agent didn't have the seller sign a commission agreement), he will take whatever commission is offered and look at it as a lesson for the future.
You were right to tell the agent about your contact with the seller and you seem to be doing whatever is possible to get the property and trying to keep your business relationship intact with your agent.
Get your offer done ASAP and good luck with it.
Sounds like you want to do the 'right thing', so here are my 2 cents.
First,remember that the agent only gets 1-1.5% of the deal, not the full 6%, so he might make $5-10K as your agent in the deal. If he got the listing too, he'd get another 1-2%, but it isn't even listed yet so that isn't guaranteed. If he'll tell you, find out his percentage.
As for making an offer, I'd try to buy it straight from the seller, and save all that commission overhead. But I would add a 1% seller-paid commission in there since your agent originally showed it to you. That way you aren't paying the broker, just the agent, and he pockets a full $5K.
Good luck
Peter
If the agent is not representing the seller who is he representing? Even though there is not a written contract it gives the appearance that the agent/agency is representing the seller. In Alabama when a fsbo co-ops with an agent/agency they normally receive a 2.5-3% commission which they split per their agreement. This is paid by the seller!