Considering he wrote up two unsuccessful offers, showed you 20-30 homes, I think $500 is quite a bit on the low side. I'm surprised he didn't try to negotiate a commission from the sellers since they have saved about $12K in real estate fees.

I think given how kind and helpful he has been to you, a gift of about $1500 would be more acceptable. A good way to calculate it... how many hours, approximately did he work for you showing homes, writing up offers, negotiating, etc? Then divide that number by $500 to find an hourly rate. YOu may be surprised at how low the number is.

Had you done a realtor-less deal with these people, I would think the $500 is sufficient, but it sounds like he worked very hard for you.

Where are you that it is a seller's market? Enquiring minds here definitely want to know!

If he'd gotten a 3% commission it would have been about $6000. Then figure he'd give half to his broker and take home $3000. But then about half would go to taxes, so he'd net about $1500. But then you did find the house on your own, so I'd give him between $1000 - $1500, but while giving him the check I'd ask him if he'd give you a reduced commission when you're ready sell, say 1.5% or so for the listing fee.

we asked our realtor what would happen if we found a house on our own that was fsbo. He said he'd thank us for our time and hope we recommended him to friends. He said he could not take a "gift" of any fee because he could lose his real estate license if anyone found out. Laws differ by state so hopefully your guy doesn't get in trouble. $1000 would be a nice gift I think.

"Had you done a Realtor-less deal with these people, I would think the $500 is sufficient, but it sounds like he worked very hard for you. "

It was Realtor-less. All he did was write the offer, with the information we gave him, which took him one hour. He did not enter the house. He did not talk to the seller at all. He had and has, nothing to do with the transaction other than putting my offer on paper. His name is not on the offer, anywhere. My motivation to have him write it up was partly out of pity that he did not sell us a house(as bad as that sounds), and partly because I wanted it done right. One thing I should add is that my wife and I drove around looking at homes from the street, and gave him a list of around 20 houses that we were interested in looking at, but were not for sale. He said he was going to try and cold-call all the owners for us, but we suspect he never did, even after asking him a couple of times about the list.

I can see that the consensus is that I am way too low. I will consider $1500. Just one point though, when he was showing us all those houses that were listings, wasn't he working for the sellers?

I am in Canada, where in the majority of markets, it is still a sellers market.

Laws differ regarding RE gifts. However, there are ways around the laws. It's how you word the gift/money.

What a great realtor. Totally unheard of in my neck of the woods.
I'm surpridsed that the seller didn't offer your realtor anything. That SELLER lucked out, more than you did. The seller should have offered him something for bringing him a buyer. I would.
I concur with the others, $500 is a bit low, especially since he worked so hard to find you something. He seems like a great realtor to recommend to your friends, so he gets compensated in one way or another.

You are absolutely right, in some areas good homes, well priced are above the struggling buyers market. They go quickly & with multiple offers.

One of the ways realtors justify high commissions is by pointing out that for every client that they work for who eventually closes on a house there are others who never do. So I don't think you owe him ANYTHING. You worked with him in good faith with every intention of buying a home through him. Bottom line is that even though he did a good job, he didn't earn a commission.

That said, it sounds like he is working in a price range where he's not making a tremendous amount on each deal. So I would feel obligated to show him my appreciation in a more than symbolic way. But I think $500 is more than adequate. In fact, it's very, very generous.

I don't understand the terms for writing the offer. Seems like he should have put a dollar amount on that service, or offered to represent you through closing at a reduced commission. I don't think it's very professional of him to do it gratis, but be open to a substantial cash "gift." Is he just trying to cut his broker out of the deal?

The houses I put offers on were priced $315,000 and $350,000. Both of these offers were at prices suggested by him.

When I asked him to write the offer up, I told him that I would pay him for his services, and he told me that he would talk to the owner of the office. He later called me and said that he had talked to the owner of the RE office, who had liability concerns if the deal went sideways. I assured him, by way of making a cash offer with not one condition, that I would assume all responsibility for the offer. That is why the agents name or office are not on the offer anywhere. Again, at the time, I asked him to get back to me with a price.

Yesterday he called just to see how everything is going. It sounds like he is not going to charge me anything for this. As far as the "gift" is concerned, those are my words, not his. I am just going by his silence on the bill, that I am going to have to volunteer an amount in order to compensate him. He is not verbally saying that I owe him anything. This guy is very professional.

My wife and I believe that "what goes around, comes around", and all that good Karma stuff. We just want to be fair.

Thanks for the additional info pelican. It makes sense and he does sound very professional, but I still think $500 (plus enthusiastic recommendations) is generous.

"Anyway, 10 days ago, we drove past this house that we really liked, but was not for sale. I knocked on the door, and asked the owner if she would show her house to us, because we are looking to buy a house in her location. We loved the house. The owner told us a price range that she might be interested in selling for."

Wow! It was nice of the owner to let allow a stranger in to look at her house and then be willing to SELL it to you even though it wasn't on the market!

"One thing I should add is that my wife and I drove around looking at homes from the street, and gave him a list of around 20 houses that we were interested in looking at, but were not for sale."

You may have given him the 20 listings, but HE was the one who took the time (and gas) to show them to you. He stood by your side through the two contracts that didn't pan out and didn't charge you a dime to write up the contract for a FSBO? He sounds like he has been VERY reasonable. I'd love to find a realtor like this. I think $1,000.00 would be fair. We were going to pay our ex-agent $1,500 to handle a FSBO for us but the deal fell through.

Cheifneil makes a good point, "ask him if he'd give you a reduced commission when you're ready sell, say 1.5% or so for the listing fee."

He showed you 20 or 30 homes, thats probably close to 15 hours worth of work, searched the homes, set up the appointments, another few hours worth of work, negotiated 2 deals, maybe 1-3 hours worth of work, depending on how much negotiating was going on. You say you asked him to "write up" the offer, did he also negotiate the offer for you? Its very typical in a sellers market to loose a few houses. People outbidding you, stronger buyers competing with you. Just because your offers didnt get to closing doesnt mean the agent didnt work. So lets say your agent worked 20 hours for you. Whats it worth? If you truly want to compensate him for his work, his work consisted of alot more than writing up the offer of the house that finally closed.

"Cheifneil makes a good point, "ask him if he'd give you a reduced commission when you're ready sell, say 1.5% or so for the listing fee."

I don't understand the connection.
You only pay him $1k (or whatever it is) or so to help you this time and already you try to beat him out of his next commission?
I'd have to decline the offer and say, when the time comes to sell, we'll talk about it.

I would figure out the route he took when looking at the houses, then take into consideration the car he drives and how much gas was a gallon. When I went out the last time, I met my realtor 1/2 way. She then drove, at times it wasn't direct and we would have had to back track a bit had we looked at the house that was saved for last. Think was saw 5 houses, we were out for 3 or 4 hours. She might have used a tank of gas.

Next I would take into consideration what Linda said. Depending on the area you live, you could have been out for a total of 20+ hours for 30 houses.

I think it's nice you want to give him a little something. I don't think it has to be too much; $500 to $1,000 might be right, especially if you send business his way.

You did leg work yourself. If this house was one of the ones you asked him to call; I might be a little hurt to think he didn't try; but then again, I don't pick up my phone if I don't recognize the phone number. I count on people leaving messages & if he didn't, then I might think to say that the $500 is fine.

A Realtor's real use to you is like that of a consultant and shouldn't have to do with how many hours he/she worked. By comparison, you pay your doctor for competent advice and services, not for how long she/he spends examining you.

Your Realtor completed about half the services of a buyer's agent (showed you houses, wrote the offer, but didn't negotiate or coordinate closing for you). So I'm in favor of the "half commission" argument of $1000 to $1500. Do be careful though; where I am "gifts" to Realtors are also illegal.

Sounds like you found a good agent- hang on to him! :)

"My wife and I believe that "what goes around, comes around", and all that good Karma stuff. We just want to be fair."
I think you have been fair and considerate.

A Realtor's real use to you is like that of a consultant and shouldn't have to do with how many hours he/she worked.

After reading input from realtors here, most say they use gas when driving people around, it's also their time. I think that at least figuring out gas and trying to have some sort of formula to show appreciation is better then to maybe give them too little. The poster doesn't have to give them anything but wanted to, to show appreciation & is trying to figure out how to come up with a number. What's a good way to determine it?

By comparison, you pay your doctor for competent advice and services, not for how long she/he spends examining you.

Not necessarily. I've been to doctors that charge $300+ a visit, because they are giving me 4 appointment slots. I've also called doctors asking the fee - they've told me it's anywhere from $250 to $450 depending on how much time he spends with me.

pelican - You're right, he didn't find the house for you and just wrote up the offer. However, all the work he did previously to find you a home should be taken into consideration. Considering the price of gas in Canada which is far more than the US (at least $4/gallon), I think $1000 would be sufficient - cash in a thank you card - sort of like a tip.

You're right - Many parts of Canada is a seller's market. My parent's house has increased exponentially in Calgary and they've had three people who want first dibs on the house when they decide to sell.

Thanks for all your input.

We are going to include $1000 cash with a Thank-You card.

BTW, we live in a city with a population of 15,000 on the Trans Canada Highway. The price of gas here for a U.S. gallon, is $4.79US.

Something to think of - do they have gasoline gift certificates in Canada? They might not mind getting some of the "gift" on a card.

Wow - so gas where you are is about $1.20/litre. Ouch!

roselvr - that's a good idea. I bet most of the major stations have gift cards that can be loaded/reloaded.

sparksals..Bang on. $1.19/litre.

"You only pay him $1k (or whatever it is) or so to help you this time and already you try to beat him out of his next commission?
I'd have to decline the offer and say, when the time comes to sell, we'll talk about it."

Bernie, I suggested that because I know several realtors that offer a discount on the listing side of a "round-trip". That is, if they get a full commission representing you as a buyer, then they let you know up front that they will list the house at a discount when you're ready. In fact the realtor I use does the listing entirely for free. The realtor in this case didn't get a full commission, but it doesn't hurt to ask the question.

Some realtors may hate the idea, but as a consumer it's a marketing tactic that has definitely worked on me.

I'm always amazed at how often buyers and realtors seem to think something is owed to the realtor when a buyer finds a home on their own. Realtors showing properties are working for the sellers not the buyers and in lots of cases split the commision simply because a buyer sees a home and lets the realtor set up an appointment. While some work may be done by the realtor, I would pay an hourly rate for their time which I would base one a lawyers rate of $150.00 an hour.

"Realtors showing properties are working for the sellers not the buyers..."
That's an incorrect statement for most US States.

"Bernie, I suggested that because I know several realtors that offer a discount on the listing side of a "round-trip". That is, if they get a full commission representing you as a buyer, then they let you know up front that they will list the house at a discount when you're ready. In fact the realtor I use does the listing entirely for free. The realtor in this case didn't get a full commission, but it doesn't hurt to ask the question."

In my mind that would have been an open ended agreement, which I can not make.
Market conditions can change over time, and in all fairness to the seller, I might take the listing for less than 1.5% in 2013, when they might be ready to sell and buy through me.

pelican - sparksals..Bang on. $1.19/litre.

That's what being a born and bred Canadian will do to you! You can take the girl out of Canada, but you can't take Canada out of the girl! ;)