Story Time: The time I didn't pay the "listing agent"
I believe my word is good, this is about the time the agent I was working with didn't think it was.  


Agent Bob and I had worked together 10+/- years.   "Bob" was not my most agent but he was good at a small area that I invested in.  I would guess Bob made about $200k from me over the years.  The year this event happened, he had made $50k from me.    


I had a medical tenant with private equity backing.  They were in the roll up stage and I did 5 or so build to suits/remodels for this client.  Due to it's small size ($350k), I had decided to 1031 it right away.  I had promised  Bob the listing and sent him all the DD including a phase 1, lease, as-builts, etc...  


Bob called up a known Buyer in the area and brought me an LOI that I accepted but never generated a PSA for.  Bob never generated an OM, did a mass marketing effort, or list in the MLS.  This LOI was about 6 weeks after I had verbally promised him the listing.  So he had plenty of time to do his end of a listing agreement.  My system and staff automatically generate all the information a Buyer would want and I can send the DD to anyone in one minute time.   Even my smallest deals have $10k of DD that every buyer wants/needs.    


So another agent "Sam" asked for the info &amp; DD.  Ordinarily in that situation I would send the OM, and tell Sam to work with the Listing Agent (Bob).  Only Bob never generated the OM.  Bob was lazy.  Bob had 6 weeks to do it.  So I clicked a few computer buttons and Sam had the information.  Sam presented an offer maybe 2 days after I accepted the other LOI.  The LOI said "not binding unless PSA signed".    


So I tell Bob I am going with Sam.  Bob wants half commission, which would've been about $10k.  I tell Bob I am not paying him as he did none of the work in the 6 weeks that a Listing Agent is expected to do.  I explain I would've paid him half had he did things I expect of a listing agent.  Bob was Very. Not. Happy.  So as I compromise, because I liked the guy, I sent him $3k anyway.    


Bob has never spoken to me again and we have never done another deal together.
[{"id": "if08bma", "text": "Sounds like you saved some chump change and lost all of Bobs clients. Ouch\u2026", "replies": [{"id": "if2fs2o", "text": "Right?  I\u2019m wondering how this is some great story for OP?  It kind of sounds like everyone sucks here.", "replies": [{"id": "if2o048", "text": "3% of 2 mil in yearly volume is decent for a single client.\nOP saved maybe 6k on the deal that ended their relationship. I am sure that OP isn\u2019t crying about it, but one additional vacancy for a few months longer than expected would soak up what he saved.\nHaving a good working relationship with all the local agents is important. Sure OP can advertise more and deal with leasing himself. But when you piss off the original leasing agent, you end up with a potential of losing all the tenants he leased too when renewals come up.\nAll Bob needs is vacant lease space because he knows when the leases end and has their contact info. OP pissed off bob and he hasn\u2019t seen the true cost of flipping an LOI from bob to another agent unless all of bobs clients have already moved on.", "replies": [{"id": "if2s1c2", "text": "Of course we're missing context *and* only getting one side of the story.\n\nCould be that bob did tons of work that the op doesn't appreciate.\n\nCould also be that bob is notoriously lazy and greedy (though, the \"I like the guy\" at the end suggests otherwise).", "replies": [], "depth": 4}, {"id": "if2s8d2", "text": "Right?", "replies": [], "depth": 4}, {"id": "if47c4t", "text": "I agree with all you said.  Ultimately it was a mistake and would undue it if I could.  I have since semi-retired to a completely different market.  But I did continue to work in that market for 3-4 years afterwards.  \n\n\nI never got my real estate license, which has personally cost me 7 figures.  But I was acting on my own behalf so much I didn't want to muddy the waters.  Other than stuff within 10 miles of my HQ, everything was listed with an agent or I was using a buyer's agent to represent me.  I think brokers bring a ton of value, when they do their job how I think it should be done.", "replies": [{"id": "if4abt7", "text": "I absolutely commend you for showing the mistakes you made. Mistakes often teach the most important lessons if you are open to learning from them.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}, {"id": "if46qe5", "text": "It's not a great story for me.  Ultimately it was a mistake.  I thought I was teaching him a lesson to do his job.  He saw it differently.  \n\n\nIf you check my old posts I have a history of writing about my mistakes.  I don't like the whole write about success stories constantly, because I probably learned more from my failures than my gains.    Hopefully someone out there is learning from my mistakes, that's all.", "replies": [{"id": "if4whw0", "text": "Fair enough, but in my defense you seemed to package this story as you were the triumphant one who taught the lazy guy a lesson.  I kind of agree more with your statement that you made a mistake like u/iswins said", "replies": [{"id": "if4y67n", "text": "Hi there, u/iswins here. I did not make that reply and I'm very concerned now.", "replies": [{"id": "if4y9ds", "text": "Oh you know what? I bet it's case sensitive", "replies": [], "depth": 6}], "depth": 5}, {"id": "if5tjr9", "text": "I can see your perspective.  It wasn\u2019t meant to be triumphant sorry if it came across that way.  At the end of the day i did less business because of that decision.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "if0m201", "text": "I\u2019d say you weeded out someone who took your business for granted.  If he earned $200k in commissions from you he shouldn\u2019t sweat $10k if it was due to a misunderstanding.\n\nI appreciate that my broker isn\u2019t just thinking of the next commission, he is thinking of the next 30 years of my transactions that he is going to be a part of.", "replies": [{"id": "if47fzd", "text": "Obviously that's how I saw it.  He saw it otherwise.", "replies": [], "depth": 2}], "depth": 1}, {"id": "if2zs5s", "text": "When I sign an LOI, I've given my word.  I let that play out for better or worse.  I have been in a position where I got a second LOI at better terms and told them I couldn't sign it because I have an LOI already.  It sucks, but it's important to keep your word even when you sign an LOI.  That's my position on it.  In this situation, I would have told the original broker that you've got a better offer and he needs to get a contract out within whatever timeframe is allotted in the LOI or I'm going to another offer.  This is just the way I do things.  I don't see an issue with using another agent if you didn't have a listing agreement in place.", "replies": [{"id": "if4697i", "text": "I've gone back and fourth on that.    \n\n\nI've sold 75ish investment properties and I would say I've had 75-100 Buyers bail in the DD phase.  My problem with that is that I have all the  DD.  If there's an environmental issue, it's disclosed.  They are welcome to go get a brand new Phase 1 but I know what's going to say.  My goal as the seller was always to give them everything I would want.  We even had a rule if the property is &gt;$500k we got an as-built survey.  A lot of times it wasn't necessary but it just made things go so much cleaner when selling.  So having over 50% bail rate on PSA's by Buyers pissed me off in that situation.    \n\n\nI think the majority of the time it was 1031 buyers putting multiple properties under contract (not disclosing it) and I was the loser choice.  These were all investment grade single tenant NNN/NN leases.    \n\n\nSo I eventually came to the conclusion on LOI's \"not legally binding\" which gives me the right to bail too.  Not to say I don't see your point and you're wrong.  It's ultimately a personal decision  with no right or wrong answer, IMO.", "replies": [{"id": "if4bti6", "text": "I've had the same failure rate with buyers.  I understand the frustration.  I just know going in that they have the right to back out at any point.  We agreed that I would sell, and they would make a final decision within 30 days, or whatever it is.  I'm not impugning your approach either, I've just never done it.   It sounds like we are in the same business and possibly with the same tenants.  I wouldn't be surprised if we know each other.  Good luck if you're still building NNN assets right now.  It's getting hairy out there.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "if6fr9i", "text": "You are a fantastic owner. Bob took you for granted.", "replies": [], "depth": 1}]