Commission Rate for Buyers Agent with Out of State Realtor as my Buyer?

[howard11792]

I am an agent in Park City Utah. I have a buyer who an active agent in another state. This out of state agent is wanting to make an offer on a $800K condo in Park City. What is the typical commission split or what sort of professional courtesy should I offer her?

If this was a referral, I would pay the other agent 25%. What would you do in this case? Are there any forms or contracts to protect us both in this sort of commission concession / structure?

Please advise…

[RyanRE]

I would have them sign an exclusive buyer's agency agreement & referral agreement, but it depends how the buyers wants the money. If the buyer's lender allows it, I think that the buyer would be best off having their portion of the commission applied to their down payment. If that is the case, then just write an addendum to the agency agreement.

[kensmith]

I would give the same as you would for a referral, IF they ask for it. Why offer something if they haven't asked for it up front? They came to you and asked you to do a job, you should get paid for that job.

I almost purchased some investment property out of state and wasn't asking the agent for anything. They knew the area and investments very well so why should I get part of their commission for asking them to work for me...didn't make sense to me to ask.

[ScottP]

I agree with Ken. I have used agents to purchase property for myself outside of my MLS and never even thought to ask for a piece of the commission. It could be a mistake on my part, but I just felt like if anybody should know that an agent earns their full commission and should not be negotiated down it would be another agent.

[RyanRE]

Well if they aren't asking for a referral, don't offer them one I was assuming that they already asked for a fee.

[DebbieJ]

I agree, unless they ask for it, don't give up any of your hard earned commission.

[SLP-NYCT]

Just wanted to throw in my two cents and since I am in this position right now I'll speak from experience. If they came to you and just started looking for property. They get nothing. A referral Agreement needs to be done up front, not at the end. However, why not offer them a position in your office! They have an interest in Real Estate, They are moving there, might as well have them on your team, but teach them about referrals as they missed this part of their education.

As a Broker, I don't list or sell too much any more, but I still do a nice job on referrals.

When I am looking for property out of state, I refer myself, why? For the same reason I refer Friends, Family and clients moving out of state. Because that is one part of our job. If you were buying a house within your area, would you waive your commission?

[Norcal Jim]

I would bring it up because what if they want an unreasonable refferal fee. Wouldn't you want to know that up front? I know I would. I don't like those kind of surprises.

[howard11792]

Thanks - Your comments are most helpful...

[thataway61]

I looked for property on my own (time, fuel, gas, IDX search, etc.). I then did drive bys on the properties and called the listing agents on two of them. I immediately informed the 2 listing agents I was an out of State agent and that I did not want their representation, but I did want the coop portion of the commission as a referral fee to myself. This was fine with the listing agents. I wrote offer on a home that was not accepted. The next target was a condo. Since I was not familiar with the local condo contracts or state condo laws at the time, and knew there was a bit of due diligence that needed to be done, I contacted an agent I already knew and asked him to help me do the due diligence and write the offer for 50% of the coop. This worked great. He worked maybe 4 hours including going to the closing and was paid handsomely.

So, if you have an out of the area agent that has done most of the work, be generous. But if it is just a walk in or e-mail contact and your effort is going to be as it would be for a layman or nonagent, then offer a referral fee of 25% to 30% of the coop. I see you are in a resort area as I am, and you can probably expect to run into that situation often, so you should have it readily in mind what you are willing to do or not willing to do.