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Setting Boundaries with Clients

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Contingencies Stay Active Until The Buyer Removes Them in Writing

Contingenices Don’t Expire Automatically, They Must Be Removed

Contingencies stay in place until they’re removed by the buyer in a contingency removal form. So the three big buyer contingencies are the inspection period, the loan period, and then the appraisal period. Default verbiage in a CAR purchase agreement or an oorp.org purchase agreement has 17 days for the buyers inspection period, 17 days for the appraisal, and 21 days for the loan contingency. Now, sometimes I’ll get a call from a listing agent and they’ll tell me that they’re 25 days into transaction or some number of days that’s far past all the contingency periods and they’ll tell me that the buyer’s not performing or the buyers Lender is having an issue and they’re not returning calls. One of my first questions is did the buyer remove contingencies or did you as the listing agent send a notice to perform when the buyer was late on removing contingencies? Often I hear the answer’s no. For one reason or another parties forget the listing agent forget to ask or they think that once they’ve passed the contingency period that they aut

omatically expire and they come to find out that until a buyer sends that CR form that constitutes your removal form, those contingencies are in place so a buyer could drag out the contingency period for 30 days or 40 days or as long as they want because they last indefinitely. Until the seller sends a notice to perform demanding that the buyer remove their contingencies or the seller can cancel then – and the buyer of course has to respond by either cancelling or submitting their contingency removal – then those contingencies stay in place. So, it’s important to send a notice to perform if the buyers late on their contingency periods or in some transactions that are higher risk for the buyer defaulting or there’s more tension, listing agents will send a notice to perform prior to the contingency expiring because you can, you can actually send a notice to perform two days before the contingency will expire so notice perform will have a two day period let’s say it’s for a loan contingency on day 19 the listing agent can send the buyer’s agent a notice perform to remove that 21 day loan contingency and it’s a way to proactively ask that the contingencies – you’re expecting a contingency to be removed and if on the 21st day the very date of the contingency is supposed to be removed. If it’s not removed by the buyer then the seller through that notice to perform form has the option to then cancel the transaction and that allows the seller to not be stuck at the buyers whim, to not be trapped in that transaction. It allows them (seller) leverage to cancel or tell the buyer that they were going to cancel unless the buyer performs. So remember, contingencies stay in place until the buyer sends a written contingency removal form.
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Does the Name of Your 100% Commission Real Estate Brokerage Matter?

Real Estate agents spend a lot of time comparing commission models, office amenities, and company policy when they consider joining a brokerage. Equally important is the name of the brokerage. Consumers have access to nearly all the data, so it is incumbent for agents to prove their value. Agents prove their value by building trust and credibility with their prospects. This brings us back to the company name. If you are a well-established agent, and your name is already very recognizable, then the name of your real estate brokerage takes a backseat your name. However, that is very rare, some tiny percentage of agents, much less than 1%. For the rest of us, the question will come up with clients, “what brokerage are you with?” These prospective clients are sniffing around. They want to know about your support system and if they are reputable.

So, you can choose a reputable name, like Keller Williams and be done with this, right? Yes, but you also are factoring in what the brokerage will charge you when you close a transaction. Let’s say you want to save the most commission for yourself, so you look at 100% commission model brokerages. This is a different segment of the brokerage world. Again, you will have to look at a list of companies, what they offer, and, of course, the name.  So, Balboa Real Estate fits the bill as a 100% commission brokerage, and we don’t charge monthly fees. We are partial to our name because rather than something generic, like “First Home Realty,” or something abstract like, “Cyber Broker.” The name Balboa is a California icon. In each county of California it has different geographic landmarks and meaning, it sounds familiar.

Agents often call our office because they heard we offer a 100% commission program and they like our name. That is the conversation starter. Agents join our company because our reputation gives agents the credibility they need to win over clients. Agents stay at Balboa because we offer great support and take care of them.

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Is there really such a thing as a 100% commission real estate brokerage?

Is the term 100% commission real estate brokerage accurate or a misnomer for low-cost brokerages? By now 100% commission real estate brokerages have been around long enough to represent a considerable slice of the the real estate brokerage world.  Many real estate agents know that there are brokerages that charge less than the traditional broker-agent split. Some of these 100% commission brokerages charge a flat fee per transaction with a monthly fee or without a monthly fee. Some brokerages charge a flat annual fee and the licensee keeps every penny of the commission they charge. Many charge licensees separately for  errors and omissions insurance. The point is that this isn’t exactly a 100% commission in the literal sense of the word.  If a brokerage charges a flat fee per transaction, even a very small flat fee, then the licensee isn’t getting 100% commission, right?  Maybe they are getting 99%, which still isn’t 100%. Therefore the term 100% commission encompasses a variety realty brokerages with a structure of very low-cost brokerage fees for the real estate licensee.

 

Now, it should be noted, that this is simply an analysis of what 100% commission real estate has grown to mean. The variety of 100% real estate companies are still vastly better that their traditional counterparts. Many traditional companies charge a substantial percentage of a licensee’s commission that is way more than any 100% commissional estate brokerage. As recent as 10 years ago from the date of this post, the industry was still overwhelming using the traditional model in which brokers took 20%-50% of a real estate agent’s commission. This was justified because agents got to use the office, copy machine, fax machine, and all sorts of “brick-and-mortar” tools. Technology has made most of this obsolete. Realty documents are rarely printed, most of the transaction is done online through email, using Docusign or scanned PDFs. In-person meetings are held at the home of the listing appointment or at properties being viewed by the buyer. The days of bringing a buyer back to your office and having them sign a stack of papers so that you can fax an offer to a listing agent are gone. Agents that seek 100% commission real estate companies realize this and typically have no interest in paying the overhead for tools that they simply don’t need.

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